THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


GIFT  OF 

School  of  Law  Library 
Duke  University 


SELECTED  CASES 


ON  THE 


LAW  OF  CONTRACTS 


WITH  ANNOTATIONS 


SECOND  EDITION 


BY 
ATWELL  CAMPBELL  McINTOSH 

Professor  of  Law,  Trinity  College 

Durham,  N.  C.  (1904-1910) 


CINCINNATI 
THE  W.  H.  ANDERSON  COMPANY 

1915 


WI5 


COPYRIGHT  1908 
BY   ATWELL    CAMPBELL   McINTOSH 

COPYRIGHT  1915 
BY   ATWELL   CAMPBELL    McINTOSH 


Preface  to  First  Edition. 


To  present  any  subject  of  the  law  by  means  of  cases,  is  only  to 
follow  out  the  idea  of  Lord  Coke,  that  "the  reporting  of  particular 
cases  is  the  most  perspicuous  course  of  teaching  the  right  rule  and 
reason  of  law" ;  but  in  studying  the  law  by  such  cases,  the  caution 
of  Lord  Mansfield  is  to  be  observed,  that  "the  law  does  not  consist 
of  particular  cases,  but  of  general  principles,  which  are  illustrated 
and  explained  by  those  cases."  This  book  has  been  prepared  for 
the  purpose  of  presenting  the  general  principles  of  the  Law  of 
Contracts,  by  the  study  of  selected  cases,  which  illustrate  and 
explain  different  parts  of  that  subject. 

The  cases  selected,  with  one  exception,  have  been  taken  from 
the  decisions  of  the  Supreme  Court  of  North  Carolina.  This 
course  has  its  disadvantage,  no  doubt,  in  that  perhaps  a  greater 
variety  of  fact  and  discussion  might  have  been  obtained  by  taking 
other  American  or  English  cases,  but  it  has  its  advantage,  in  that 
it  gives  a  connected  view  of  the  whole  subject  in  one  jurisdiction. 
It  is  not  intended  to  give  the  law  of  one  jurisdiction  exclusively, 
for  it  will  be  found  that  the  principles  of  the  Law  of  Contract 
are  the  same  in  all  the  States  which  have  adopted  the  common  law, 
and  even  the  statutory  changes  are  similar  in  many  respects. 
While  the  student  is  learning  the  general  law  of  the  subject,  he  is, 
at  the  same  time,  becoming  thoroughly  familiar  with  the  decisions 
of  his  own  State,  or  of  a  court  which  has  always  met  with  the 
highest  consideration.  This  court  has  been  in  existence  for  a  cent- 
ury, and  almost  every  important  question  in  the  Law  of  Contracts 
has  come  before  it  in  some  form  for  discussion.  Its  judges  have 
been  men  of  approved  learning  and  ability.  Its  views  have  al- 
ways been  conservative;  and  perhaps  in  no  other  State  have 
the  principles  of  the  common  law  been  more  closely  observed. 

There  has  been  no  attempt  at  originality  of  arrangement,  in  a 
subject  which  has  been  often  discussed;  but  the  cases  have  been 
selected  to  illustrate  the  general  subjects  usually  presented  in  the 
leading  text-books  on  contracts,  and  frequent  references  to  authori- 
ties are  given  in  the  notes.  The  Contracts  of  Married  Women 
and  of  Corporations,  especially  Municipal  Corporations  in  North 
Carolina,  are  explained  somewhat  in  detail,  while  the  subjects  of 
Bailment,  Sales,  Agency  and  Quasi  Contracts  are  treated  only  in 
connection  with  other  forms  of  contract.  In  each  case  the  facts 
have  been   given   in   such   a   way   as   to   show   clearly   and   briefly 


m 


IV  PREFACE 

the  question  decided,  and  this  has  been  done  either  in  the  words 
of  the  original  report  or  by  condensation,  if  necessary.  In  the 
opinions  themselves  no  change  has  been  made,  except  that  in  cases 
where  several  questions  have  been  discussed,  only  that  portion 
is  given  which  is  concerned  with  the  question  of  contract  involved ; 
and  in  some  instances,  quotations  from  other  cases,  which  are 
only  corroborative  of  the  main  argument,  are  omitted  and  the 
cases  referred  to  and  omission  noted. 

Following  the  cases  on  each  subject  are  notes  giving  other  cases 
in  which  the  same  question  has  arisen  or  connected  subjects 
are  discussed  and  also  references  to  general  authorities,  where 
a  more  extended  investigation  may  be  made  with  little  additional 
trouble.  Where  there  is  any  material  difference  in  the  view  held 
by  other  courts,  attention  is  called  to  it  in  the  notes,  and  references 
given  where  the  difference  may  be  examined.  The  book  may  be 
used  alone  or  in  connection  with  any  elementary  text-book  on 
contracts. 

While  advantage  to  the  student  has  been  mainly  kept  in  view 
in  the  preparation  of  the  book,  the  number  and  variety  of  the 
cases,  and  the  references  given  in  the  notes  will  render  it  of 
material  advantage  to  the  lawyer  in  active  practice. 

A.  C.  McIntosh. 
Trinity  College,  Durham,  N.  C. 
September,   1908. 


Preface  to  Second  Edition. 


The  first  edition  of  this  book  was  compiled  almost  entirely 
from  decisions  of  the  North  Carolina  Supreme  Court,  and  was 
published  as  one  of  a  series  of  Law  Books  gotten  out  by  the 
Law  Department  of  Trinity  College.  In  the  second  edition  the 
plan  is  substantially  the  same,  in  that  most  of  the  cases  formerly 
used  have  been  retained ;  but  where  more  recent  North  Carolina 
decisions  have  presented  the  subject  more  clearly,  they  have  been 
added  to  or  substituted  for  the  older  cases.  In  some  instances, 
where  no  suitable  case  could  be  found  in  the  local  decisions,  cases 
have  been  selected  from  other  jurisidictions  in  order  to  present 
the  subject  more  fully.  The  notes  have  been  revised  and 
additional  citations  given  from  local  and  general  authorities,  so 
that  a  more  complete  investigation  of  each  subject  may  be  easily 

made. 

A.  C.   M. 

November,   1915. 


Table  of  Contents. 


I.  Formation  of  Contract. 

CHAPTER  I. 

Agreement. 

Page 

Sec.  1.     Definition  of  contract 1 

Sec.  2.     Two  or  more  parties 3 

Sec.  3.     Common  intention ° 

CHAPTER  II. 
Manner  of  Agreement. 

Sec.  1.     Express    contract J  * 

Sec.  2.     Implied  contract  (in  fact) 13 

Sec.  3.     Implied  contract  (in  law).     Quasi  contract 22 

Sec.  4.     Offer  and  acceptance, 

1.  Explained  ^ 

2.  Offer  must  be  communicated 28 

3.  Acceptance    necessary 34 

4.  Acceptance  must  be  communicated 3o 

1)  In    general 35 

2)  Guaranty 37 

5.  Manner  of  acceptance 43 

1)  By  correspondence 43 

2)  By  manner  indicated  in  the  offer 48 

3)  Must  be  identical  with  the  offer 51 

6.  Revocation   of  offer 54 

1)  In    general 54 

2)  Options    55 

3)  Broker's    contract 57 

4)  Revocation  must  be  communicated 59 

5)  Revocation  by  lapse   of  time 59 

6)  By  rejection,  or  conditional  acceptance 59 

7)  By   death    or   insanity 59 

7.  Offers  to  the  public °1 

1)  Rewards    °J 

2)  Auctions 63 

Sec.  5.     The  agreement  must  be  intended  to  affect  legal  relations, 

1.  Gratuitous  service °4 

2.  Pretended    consent 66 

Sec.  6.     Agreement   must  be   complete, 

1.  Invitations  to   deal y^ 

2.  Incomplete  negotiations 71 

3.  Terms  must  be  certain  and  definite 7~ 

CHAPTER  III. 
Form  of  Agreement. 

Sec.  1.     Contracts  of  record, 

1.  Judgments    ^ 

2.  Recognizances     °" 

vii 


viii  TABLE   OF   CONTENTS. 

Sec.  2.     Contracts  under  seal,  Page 

1.  Essentials  of  such  contracts 82 

2.  Signing    85 

3.  Sealing    92 

4.  Delivery    95 

1)  In    general 95 

2)  Probate  and  registration  as  evidence  of  delivery  100 

3)  Effect  of  delivery 102 

5.  Attestation  103 

6.  Date   103 

7.  Acceptance     103 

8.  Escrow    104 

9.  Registration  107 

10.  Bond  as  a  negotiable  instrument  108 

11.  Effect  of  a  deed  108 


CHAPTER  IV. 

Simple  Contracts.     Statute  of  Frauds. 

Sec.  1.     Promise  of  an  executor  or  administrator Ill 

Sec.  2.     Promise  to  answer  for  the  debt  of  another 115 

Sec.  3.     Contracts  to  sell  or  convey  any  interests  in  land, 

1.  Any  interest  in  land 124 

2.  Growing    trees 129 

3.  Growing  crops 134 

4.  Partnership  agreements  as  to  land 137 

Sec.  4.     Contracts  in  consideration  of  marriage 139 

Sec.  5.     Contracts  not  to  be  performed  within  a  year 140 

Sec.  6.     Sale  of  goods,  wares  and  merchandise 141 

Sec.  7.     Requisites  of  the  writing 143 

Sec.  8.     Effect  of  noncompliance 149 


CHAPTER  V. 
Consideration. 

Sec.  1.     What  constitutes  a  consideration, 

1.  Valuable    consideration 160 

2.  Consideration   and   motive 164 

3.  Good    consideration 166 

4.  Mural   obligation 168 

Sec.  2.     Necessity  for  consideration, 

1.  Simple   contract^ 172 

2.  Contracts  under  seal 173 

3.  Negotiable  instruments 176 

4.  Gratuitous  employment 177 

Sec.  3.     Adequacy   of   consideration 179 

Sec.  4.     Sufficiency  of  consideration, 

1.  Marriage  1^1 

2.  Mutual    promises 185 

3.  Voluntary    subscriptions 190 

4.  F(  trbearance  to  exercise  a  right 197 

5.  Compromise  of  doubtful  claims 201 

\   promise  to  do  what  one  is  already  bound  to  do, 

1 )  By  prior  contract 203 

2)  By    law 207 

3 )  Part  payment  as  a  satisfaction 209 

7.  A  promise  to  do  an   impossible  thing 211 

8.  A   pa^t   consideration 212 


TABLE   OF   CONTENTS.  IX 

CHAPTER  VI. 

Capacity  of  the  Parties. 

Page 
Sec.  1.     The  government, 

1.  United   States 218 

2.  The  State 218 

3      Municipal  corporations 224 

Sec.  2.     Private   corporations, 

1.  Organization  the  result  of  contract 234 

2.  Express  and  implied  powers  of  contract 237 

3.  Manner  and  form  of  contract 239 

4.  Ultra  vires  contracts 242 

Sec.  3.     Aliens    244 

Sec.  4.     Infants, 

1.  Void  contracts 247 

2.  Liability  for  necessaries 250 

3.  Voidable    contracts 254 

4.  Ratification  and  avoidance 258 

Sec.  5.     Insane  persons, 

1.  Mental  capacity  determined 264 

2.  Effect  of  inquisition  of  lunacy 266 

3.  Liability  for  necessaries 268 

4.  Contracts    voidable 269 

Sec.  6.     Drunken    persons. 

Sec.  7.     Married  women. 

1.  At  common  law 276 

2.  Under  the  constitution  and  statutes 278 


CHAPTER  VII. 
Reality  of  Consent. 

Sec.  1.     Mistake, 

1.  As  to  the  instrument 293 

2.  As  to  the  identity  of  the  person 295 

3.  As  to  the  identity  of  the  subject  matter 297 

4.  As  to  the  existence  of  the  subject  matter 298 

5.  As  to  the  nature  of  the  subject  matter 300 

6.  As  to  terms,  quantity,  price,  etc 303 

7.  In  the  expression  of  the  instrument 306 

8.  Mistake  of  law 309 

Sec.  2.     Misrepresentation    312 

Sec.  3.     Fraud, 

1.  Elements  of  actual  fraud 317 

2.  Nondisclosure,  or  mere  silence 322 

3.  Material  fact, 

1)  What  is  material 326 

2)  Misrepresenting    intention 327 

3)  Opinion   329 

4.  False  within  the  knowledge  of  the  party  making  it.  . .  .  333 

5.  Reasonably  relied  upon  by  the  other  party 336 

6.  Intended  to  deceive  and  does  deceive  and  injure 339 

7.  Fraud  in  the  factum  and  fraud  in  the  treaty 341 

8.  Effect  upon  the  rights  of  the  parties 344 

9.  The  rights  of  third  parties 346 

10.     Constructive    fraud 348 

Sec.  4.     Duress, 

1.  By  imprisonment 353 

2.  By  threats 357 

Sec.  5.     Undue  influence 361 


X  TABLE   OF    CONTENTS. 

CHAPTER  VIII. 

Illegal  Contracts. 

Page 

Sec.  1.     Agreements  in  violation  of  common  law 3b2 

Sec.  2.     Agreements  in  violation  of  statute, 

1.  In   general 366 

2.  Profession   or  trade 368 

3.  Sunday  contracts 371 

4.  Usury     375 

5.  Gambling  contracts, 

1)  Wagers    381 

2)  Insurance    contracts 385 

3)  Dealing  in  futures 388 

Sec.  3.     Agreements  contrary  to  public  policy, 

1.  As  to  public  offices 390 

2.  Corporations  owing  a  duty  to  the  public 395 

3.  Agreements  affecting  the  government 401 

4.  Agreements   tending   to   interfere   with   public  justice, 

1)  Compounding  a  crime 402 

2)  Arbitration  agreements 405 

5.  Agreements  tending  to  encourage  litigation 408 

6.  Agreements  of  immoral  tendency 410 

7.  Agreements  tending  to  fraud  or  breach  of  trust 414 

8.  Agreements  in  derogation  of  marriage  relation 416 

9.  Contracts  in  restraint  of  trade 423 

10.  Combinations,  trusts,  and  monopolies 430 

11.  Exemption  from  liability  for  negligence 432 

Sec.  4.     Effect  of  illegality  and  the  remedies, 

1.  Divisible   and   indivisible   contracts 438 

2.  The  intention  of  the  parties 443 

3.  A  promise  to  pay  money  due  on  an  illegal  contract.  ..  4-46 

4.  Relief  of  parties  to  the  agreement, 

1)  Locus    penit-entiae 447 

2)  In   pari   delicto 449 

5.  Rights  of  third  persons 454 

6.  Conflict  of  laws 455 


II.  Effect  of  Contract. 

CHAPTER  I. 

Effect  Upon  Third  Persons  Not  Parties  to  the  Contract. 

Sec.   1.     Imposing    obligations 456 

Sec.  2.     Interference  with  contract  relations 457 

Sec.  3.     Conferring   rights   upon    third   persons, 

1.  Right  <>f  third  person  to  sue 461 

2.  Action  by  real  party  in  interest 475 

CHAPTER    IT. 
Assignment  of  Contract. 

Sec.  1.     By  act  of  parties, 

1.  Assignment    of    liabilities 477 

2.  Assignment  of  rights, 

1)  \t  common  law  and  in  equity 485 

2)  Under   the   law   merchant 488 

3)  Under  statute 493 

4)  Mode  of  assignment 494 

5)  Effect   of  assignment 499 


TABLE    OF    CONTENTS.  XI 

Page 
Sec.  2.     By  operation  of  law, 

1.  Transfers  of  interests  in  land 509 

2.  By    marriage 519 

3.  By    death 522 

CHAPTER  III. 

Joint  and   Several  Obligations. 

Sec.   1.     Joint  promisors 526 

Sec.  2.     Joint  promisees 530 

Sec.  3.     Release  of  one  party 531 

CHAPTER   IV. 
Interpretation   and    Construction. 

Sec.   1.     Evidence    of   the   contract, 

1.  Oral    agreements 536 

2.  Written  agreements, 

1)  As  to  the  execution  of  the  instrument 538 

2)  As  to  the  terms  of  the  agreement 541 

1)  When  the  writing  is  not  the  entire  agree- 

ment    541 

2)  When  the  writing  is  the  entire  agreement  544 

a)  Parol  evidence  can  not  vary  or  con- 

tradict      544 

b)  Explanation  of  terms 545 

c)  Latent  and  patent  ambiguity 547 

d)  Custom  and  usage 548 

Sec.  2.     Construction  of  the  contract, 

1.  General    rules 550 

2.  Time  as  the  essence  of  the  contract 554 

3.  Penalties  and  stipulated  damages 557 


III.  Discharge  of  Contract. 

CHAPTER   I. 

By  Agreement  of  Parties. 

Sec.  1.     Waiver,  rescission  and  cancellation 561 

Sec.  2.     Substitution     564 

Sec.  3.     Form  of  discharge, 

1.  Contracts  under   seal 566 

2.  Simple  contracts  in  writing 568 

Sec.  4.     Provision  for  discharge  in  the  contract 569 

CHAPTER   II. 
Discharge   by   Performance. 

Sec.   1.     Substantial     performance 575 

Sec.  2.     Performance  to  the     satisfaction  of  another 576 

Sec.  3.     Payment, 

1.  What  constitutes  a  payment 580 

2.  Payment  by  note 583 

3.  Application  of  payment 585 

Sec.  4.     Tender    588 


Xli  TABLE    OF    CONTENTS. 

CHAPTER  III. 

Discharge  by   Breach. 

Page 
Sec.  1.     By  renunciation, 

1.  Before  the  time  of  performance 591 

2.  During  the  time  of  performance 596 

3.  Impossibility  created  by  act  of  party 600 

Sec.  2.     Failure   of  performance, 

1.  Entire    contracts 604 

2.  Divisible    contracts 609 

3.  Independent  and  dependent  promises 612 

1)  Absolute    612 

2)  Conditional    613 

1)  Condition  subsequent 569 

2)  Conditions  concurrent 613 

3)  Conditions  precedent 615 

4)  Condition  and  warranty 617 

4.  Failure  of  consideration 627 

5.  Alternative  contracts 629 

6.  Impossibility   of  performance, 

1)  At  the  time  of  the  contract 211 

2)  Created  by  one  of  the  parties 600 

3)  Subsequent    impossibility 631 

CHAPTER  IV. 

Discharge  by   Operation   of   Law. 

Sec.  1.     Merger    642 

Sec.  2.     Alteration   of  instrument 643 

Sec.  3.     By  bankruptcy 646 

CHAPTER  V. 

Remedies  for  Breach. 

Sec.  1.     Action  at  law  for  damages 647 

Sec.  2.     Specific  performance 653 

Sec.  3.     Injunction    655 

Sec.  4.     Discharge  of  action  for  breach 655 

1.  By   release 655 

2.  By  accord  and   satisfaction 656 

3.  By  arbitration   and  award 657 

4.  By    judgment 659 

5.  By  statute  of  limitations 660 


Table  of  Cases. 


Page 

Abbott  v.  Hunt,  129  N.  C,  403 57 

Adams  v.  Battle,  125  N.  C,  152 566 

Albea  v.  Griffin,  22  N.  C,  9 149 

Allen  v.  Baker,  86  N.  C,  91 637 

Am.  Steel  &  Wire  Co.  v.  Copeland,  159  N.  C,  556 187 

Annuity  Co.  v.  Costner,  149  N.  C,  293 440 

Archbell  v.  Archbell,  158  N.   C,  408 420 

Ark.  M.  R.  R.  Co.  v.  Whitley,  54  Ark.,  199 140 

Ashford  v.  Schrader,  167  N.  C,  45 622 

Austin  v.   Miller,  74  N.   C,  274 573 

Bailey  v.   Rutjes,  86  N.   C.,  517.  . .  .  . 15 

Bahnsen  v.   Clemmons,  79  N.   C,  556 22 

Ball  v.  Paquin,  140  N.  C,  83 278 

Ballew  v.  Clark,  24  N.  C,  23 264 

Bank  v.  Bynum,  84  N.  C,  24 490 

Bank  v.  Commissioners,   119  N.  C,  214 230 

Bank  v.  Griffin,  107  N.  C,  173 4 

Bank  v.  Miller,  106  N.  C,  347 45 

Banks  v.  Lumber  Company,  142  N.  C,  49 551 

Baptist  Female  University  v.  Borden,  132  N.  C,  476 190 

Barbee  v.  Greenberg,  144  N.  C,  430 509 

Barber-Paschall  Lumber  Co.  v.  Boushall.  —  N.  C,  — ;  84  S.  E.,  800. .  297 

Basket  v.  Moss,  115  N.  C,  448 390 

Bean  v.  Railroad.   107  N.   C,  731 294 

Bell  v.  Hoffman,  92  N.   C,  273 592 

Blacknall  v.  Rowland,  108  N.  C,  554 336 

Blackwell  v.  Willard,  65  N.  C,  555 244 

Blalock  v.  Clark,  133  N.  C,  306 55 

Blount  v.   Blount,  4  N.   C.  389 166 

Blount  v.  Harvey,  51  N.  C,  186 512 

Blythe  v.  Lovingood,  24  N.  C,  20 364 

Borden  v.  Railroad,   113  N.   C,  570 303 

Braddy  v.  Insurance  Company.   115  N.   C,  354 405 

Brannock  v.  Brannock,  32  N.  C.  428 43S 

Brewer  v.  Tysor,  48  N.   C,  180 604 

Brittain  v.  Payne,  118  N.  C.  989 24 

Broadnax  v.  Ledbetter,  —  Tex.,  — :  99  S.  W.,  Ill 61 

Brown  v.  Bebee,  1  D.  Chip.  CVt.),  227 547 

Brown  v.   Gray,   51  N.   C,   103 322 

Brown  v.  Kinsey,  81   N.   C,  245 410 

Brown  v.  Ray,  32  N.  C,  72 177 

Brunhild  v.  Freeman,  77  N.  C.  128 8 

Bryant  v.  Insurance   Co.,   147  N.   C,  181 315 

Buffkin  v.  Baird,  73  N.  C.  2R3 600 

Buggy  Co.  v.  Dukes.  140  N.  C.  393 583 

Burditt  v.   Colburn,  63  Vt.,  231 3 

Burbage  v.  Windlev.  108  N.  C.  357 •. .  385 

Burgess  v.  Blake.  128  Ala.,  105 645 

Burns  v.  Allen,  33  N.  C,  25 28 

Calvert  v.  Williams,  64  N.  C,  168 466 

Cameron-Barklev  Co.  v.  Light  and  Power  Co.,  138  N.  C,  365 272 

Campbell  v.  McCormac,  90  N.  C.  491 176 

xiii 


xiv  TABLE    OF    CASES. 

Page 

Capehart  v.   Railroad,  81   N.   C,  438 432 

Cash  Register  Co.  v.  Townsend,   137  N.  C,  652 329 

Caton  v.  Stewart,  76  N.  C,  357 414 

Chamblee  v.   Baker,  95   N.  C,  98 606 

Cherokee  Tanning  Co.  v.  Telegraph  Co.,  143  N.  C,  376 69 

Clancy  v.   Overman,   18  N.  C,  402 631 

Clark  v.  McMillan,  4  N.  C,  244 544 

Clayton  v.   Blake.  26  N.   C,  497 615 

Costner  v.  Fisher,  104  N.  C,  392 642 

Cowan  v.  Fairbrother,   118  N.  C,  406 423 

Cowan  v.   Roberts,   134  N.   C,  415 37 

Cozart  v.  Herndon,  114  N.  C,  252 35 

Crawford  v.  Geiser  Manufacturing  Co.,  88  N.  C,  554 11 

Critcher   v.  Watson,   146  N.   C,  150 214 

Crook  v.  Cowan,  64  N.  C,  743 48 

Culp  v.  Love,  127  N.  C,  457 430 

Davidson  v.  Powell,  1 14  N.  C,  575 497 

Bellinger  v.  Gillespie,  118  N.  C.  737     293 

Devereux  v.  McMahon,  108  N.  C,  134 85 

Devries  v.  Haywood,  64  N.  C,  83 66 

Draughan  v.  Bunting,  31  N.  C,  10 117 

Drude  v.  Curtis,  183  Mass.,  317 2:>6 

Duke  v.  Markham,   105   N.   C,   131 239 

Dunn  v.  Tharp,  39  N.  C,  7 139 

Edmondson  v.  Fort,  75  N.  C,  404 71 

Edwards  v.  Bowden,  107  N.  C,  58 3o7 

Edwards  v.  Goldsboro,  141  N.  C,  60 39s 

Elam  v.  Barnes,  110  N.  C,  73 656 

Electrova  Co.  v.  Insurance  Co.,  156  N.  C,  232 443 

Elks  v.  Insurance  Co.,  159  N.  C.  619 2s 

Erwin  v.  Maxwell,  7  N.  C,  241 619 

Evans  v.  Freeman.   142  N.   C,  61 541 

Fveritt  v.  Walker,  109  N.  C,  129 64 

Fawcette  v.  Mt.  Airy,  134  N.  C,  125 224 

Ferebee  v.  Gordon,  35  N.  C,  350 333 

Festerman  v.  Parker,  32  N.  C,  474 203 

Fields  v.   Brown,   160  N.   C.  295 344 

Flynt  v.  Conrad,  61  N.  C,  190 J34 

Follette  v.  Accident  Association,  110  N.  C,  377 312 

Francis  v.   Felmit,  20  N.  C,  637 255 

Freeman  v.  Bridger,  49  N.  C,  1 251 

Garseed  v.  Sternberger.  135  N.  C,  501 388 

Gifford  v.  Betts,  64  N.  C.  62 621 

Gilbert  v.  Shingle  Co.,  167  N.  C,  286 550 

Gilmer   v.   Hanks,   84   N.    C,   317 326 

Gnrblard  v.  Binney,  115  Mas>..  450 14 

' ch  v.   Fawcett,  122  N.  C,  270 381 

Gorrell   v.   Water   Cm..   124   N.   C,  328 468 

Graham  v.   Holt,  25   X.  C,  300 83 

Grandy  v.  Mc(  :ieese,  47  N.  C.  142 613 

Green  v.  Grocery  Co..  153  X.  C.  409 34 

Gricr  v.   Fletcher,  23   X.   C,  417 526 

Gurvin  v.  Cromartie,  33  X.  C.,  174 181 

Hall   v.   Harris,  40  X.   <'.,  303 104 

Hall  v.  Misenheimer.  137  X.  C.  183 44 

Hamer  v.  Sidway.  124  N.  Y..  538 199 

Hardv  v.  Ward."  150  X.   C,  385 Sd4 


TABLE   OF    CASES.  XV 

Page 

Harris  v.  Burwell,  65  N.  C,  584 5U6 

Hatchell  v.  Odom,  19  N.  C,  302 168 

Heiser  v.  Mears,  120  N.  C,  443 591 

Helms  v.  Austin,  116  N.  C,  751 100 

Henderson  v.  Shannon,  12  N.  C,  157 454 

Henry  v.  Smith,  76  N.   C,  311 306 

Hill  v.  Gettys,  135  N.  C,  373 327 

Holmes  v.  Holmes,  86  N.  C,  205 124 

Holt  v.  Wellons,  163  N.  C,  124 186 

Hoppiss  v.   Eskridge,  37  N.  C,  54 486 

Howe  v.  O'Malley,  5  N.  C,  287 185 

Huntley  v.  McBrayer,  —  N.  C,  — ;  85  S.  E.,  213 571 

Hussey  v.  Kirkman,  95  N.  C,  63 660 

Hutchins  v.  Bank,  128  N.  C,  72 242 

Ives  v.  Jones,  25  N.  C,  538 362 

Johnson  v.  Johnson,  10  N.  C,  556 164 

Johnston  v.  Smith,  86  N.  C,  498 627 

Jones  v.  Blount,  2  N.  C,  238 538 

Jones  v.  Holliday.  11  Tex.,  412 172 

Jones  v.  Stanly,  76  N.  C,  355 457 

Jordan  v.  Coffield.  70  N.  C,  110 250 

Justice  v.  Lang,  42  N.  Y.,  493 1 

Kime  v.  Brooks,  31  N.  C,  318 91 

King  v.  Lindsay,  38  N.  C,  77 499 

King  v.  R.  R.,  147  N.  C,  263 394 

Knox  v.  Jordan,  58  N.  C,  175 276 

Koonce  v.  Russell,  103  N.  C,  179 209 

Kornegay  v.  Everett,  99  N.  C,  30 309 

Lance  v.  Hunter,  72  N.  C,  178 401 

Lawing  v.  Rintels,  97  N.  C,  350 632 

Leaksville-Spray  Inst.  v.  Mebane,  165  N.  C,  644 160 

Lee  v.  Manley,  154  N.  C,  244 585 

Lee  v.  Pearce,  68  N.  C.  76 348 

Leroy  v.  Jacobosky,  136  N.  C,  443 211 

Lewark  v.  Railroad,  137  N.  C.  383 647 

Lewis  v.  Long,  102  N.  C,  206 505 

Lewis  v.   Rountree,  78  N.   C,  323 617 

Lindsay  v.  Smith,  78  N.  C,  328 402 

Lipschutz  v.  Weatherly,  140  N.  C,  365 561 

Littlejohn  v.  Patillo,  9  N.  C,  302 212 

Long  v.  Davidson,  101  N.  C,  170 545 

Long  v.  Mason,  84  N.  C,  15 643 

Lowe  v.  Weatherly,  20  N.  G.  353 197 

Luton  v.  Badham,  127  N.  G,  96 150 

Lutz  v.  Thompson,  87  N.  G,  334 538 

Mace  v.  Ramsay,  74  N.  G,  11 649 

Machine  Co.  v.  Chalkley,  143  N.  G,  181 6 

Maguire  v.  Keisel,  86  Conn.,  453 137 

Martin  v.  Hayes,  44  N.  G,  423 488 

Mathis  v.  Mathis.  20  N.  G,  55 644 

May  v.  Getty.  140  N.  G,  310 568 

Mayo  v.  Gardner,  49  N.  G,  359 ' 201 

McArthur  v.  Johnson,  61   N.   G.  317 341 

McConnell  v."  Brillhart,   17  111.,  354 143 

McCracken  v.  McCracken.  88  N.  G.  272 124 

McDugald  v.  McEaddn,  51  N.  G,  89 214 

McGraw  v.  Gilmer,  83  N.  G,  162 612 


xvi  TABLE   OF    CASES. 

Page 

McLean  v.  McLean,  88  N.  C,  394 112 

Meadows  v.  Smith,  42  N.  C.,7 353 

Melvin  v.  Easley,  52  N.  C,  356 371 

Miller  v.  Tharel,  75  N.  C,  148 501 

Mills  v.  Williams,  33  N.  C,  558 234 

Mizell  v.  Burnett,  49  N.  C,  249 129 

Moore  v.  Eason,  33  N.  C,  568 548 

Moore  v.  Nowell,  94  N.  C,  265 78 

Moore  v.  Thompson,  44  N.  C,  221 582 

Morris  v.  Osborne,  104  N.  C,  609 265 

Morrison  v.  Chambers,  122  N.  C,  689 483 

Morrison  v.  Parks,  164  N.  C,  197 51 

Munday  v.  Whissenhunt,  90  N.  C,  458 408 

Newberry  v.  Railroad.  133  N.  C,  45 295 

Norfleet  v.  Cromwell,  70  N.  C,  634 515 

Norman  v.  Railroad,  161  N.  C,  330 31 

O'Connor  v.  Harris,  81  N.  C,  279 519 

Oltman  v.  Williams,  167  N.  C,  312 624 

Osborne  v.   Cunningham,  20  N.   C.  559 456 

Overman  v.  Clemmons,  19  N.  C,  185 416 

Paddock  v.  Davenport,  107  N.  C,  710 54,  653 

Parker  v.  Davis,  53  N.  C,  460 266 

Parker  v.  Latham,  44  N.  C,  138 96 

Parker  v.  Leathers,  55  N.  C,  249 300 

Patton  v.  Hunt,  64  N.  C,  163 588 

Peacock  v.  Williams,  98  N.  C.  324 462 

Peele  v.  Powell,  156  N.  C,  553 115 

Petit  v.  Woodlief,  115  N.  C,  120 52 

Phifer  v.  Railroad,  89  N.  C,  388 29 

Phillips  v.  Houston,  50  N.  C,  302 9o 

Pickens  v.  Rymer,  90  N.  C,  282 93 

Pierce  v.  Cobb,  161  N.  C,  300 419 

Pippen  v.  Insurance  Co.,  130  N  C.  23 260 

Plank  Road  Co.  v.  Bryan,  51  N.  C,  82 629 

Pool  v.  Allen,  29  N.  C,  120 298 

Powell  v.  Inman,  53  N.  C,  436 449 

Pratt  v.  Chaffin,  136  N.  C,  350 539 

Pratt  v.  Trustees,  93  111.,  475 59 

Prince  v.  McRae,  84  N.  C,  674 13 

Puckett  v.  Alexander,  102  N.  C,  95 368 

Railroad  Co.  v.  Railroad  Co..  147  N.  C,  368 478 

Rankin  v.  Mitchem,  141  N.  C,  277 /3 

Rea  v.  Rea,  156  N.  C,  529 286 

Rhodes  v.  Chesson,  44  N.  C,  336 580 

Richardson   v.    Tones,  23   N.   C,  296 530 

Richardson  v.  Strong,  35  N.  C,  106 268 

Riggan  v.  Green.  80  N.  C,  236 269 

Riley   v.   Carpenter.   143  N.   C.  215 575 

Roehm  v.   Horst,   17s  {'.  S..  1 594 

Rufty  v.  Harwell,  03  N.   C,  306 528 

Savage  v.   (  artcr,  64  N.  C.  196 461 

iwyer  v.  Northan,  112  N.  C,  261 247 

Sett  v.  Harris  76  N.  C.^205 531 

Seaman  v.    \  schermann,  51  Wis.,  678 155 

Sharp  v.   Farmer,  20  X.  <  \.  255 366 

Shepard  v.  Rhodes.  7  R.  T..  470 179 

Shoaf  v.   Insurance   Co.,    127  N.   C.  308 472 


TABLE   OF   CASES.  XV11 

Page 

Siler  v.  Gray,  86  N.  C,  566 522 

Silverthorne  v.  Fowle,  49  N.  C,  362 7o 

Simmons  v.  Cahoon,  68  N.  C,  393 564 

Skinner  v.  Maxwell,  66  N.  C,  45 254 

Smith  v.  Lumber  Co.,  142  N.  C,  26 598 

Smith  v.  Richards,  129  N.  C,  267 533 

Smithwick  v.  Shepherd,  49  N.  C,  196 Ill 

Snipes  v.  Winston,  126  N.  C,  374 415 

Spragins  v.  White,  108  N.  C,  449 536 

Stafford  v.  Newsom,  31  N.  C,  507 339 

State  v.  Shirley,  23  N.  C,  597 218 

State  v.  White,  164  N.  C,  408 80 

Steamboat  Co.  v.  Transportation  Co.,  166  N.  C,  582 634 

Stedman  v.  Riddick,  11  N.  C,  29 48a 

Stinson  v.  Moody,  48  N.  C,  53 ■ 65o 

Strain  v.  Fitzgerald,  128  N.  C,  396 82 

Sugg  v.  Insurance  Co.,  98  N.  C,  143 569 

Swain  v.  Johnson,  151  N.  C,  93 458 

Sweany  v.  Hunter,  5  N.   C,   181 20/ 

Swepson  v.  Harvey,  69  N.  C,  387 487 

Sykes  v.  Thompson,  160  N.  C,  348 450 

Thigpen  v.  Leigh,  93  N.  C.  47 596 

Thoroughgood  v.  Walker,  47  N.  C,  15 557 

Tillman  v.  Dunman,  114  Ga.  406 63 

United  States  v.  Tingey,  5  Peters,  115 218 

Vass  v.  Riddick,  89  N.  C,  6 346 

Vinegar  Co.  v.  Hawn,  149  N.  C,  355 .'...   370 

Walker  v.  Walker,  35  N.   C,  335 84 

Wallston  v.  Braswell,  54  N.  C,  137 496 

Walsh  v.  Hall,  66  N.  C,  233 317 

Ward  v.  Anderson,  111  N.  C.  115 258 

Ward  v.  Sugg,  113  N.  C,  489 37b 

Webb  v.  Fulchire,  25  N.  C,  284 452 

Wheat  v.   Cross.  31   Md.,  99 43 

Whitehurst  v.  Hyman,  90  N.  C,  487 120 

Whitehur^t  v.  Life  Ins.  Co.,  149  N.  C,  273 334 

Williams  v.  Mfg.  Co.,  153  N.  C,  7 657 

Wilson  v.  Scarboro,  163  N.  C,  380 307 

Winberry  v.  Koonce,  83  N.  C.  351 494 

Winslow  v.  Stokes.  48  N.  C,  285 6a9 

Wiswall  v.  Plank  Road,  56  N.  C,  183 237 

Wood  v.  Boynton,  64  Wis.,  265 301 

Wood  v.  Wood,  7  N.  C.  172 447 

Woodall  v.  Prevatt,  45  N.  C,  199 173 

Woodcock  v.  Bostic.  118  N.  C,  822 464 

Woodley  v.  Bond,  66  N.  C,  396 477 

Wooten  v.  Walters,  110  N.  C,  251 •  •  •  •   609 

Young  v.  Herman,  97  N.  C,  280 18 

Young  v.  Jeffreys,  20  N.  C.  357 576 

Young  v.  Telegraph  Co.,  107  N.  C.  370 475 

Zaleski  v.   Clark.  44  Conn..  218 579 


Synopsis. 


[The  figures  refer  to  the  number  of  the  case  unless  otherwise 
indicated.] 

A  Contract 

"A  contract  is  an  agreement,  upon  sufficient  consideration,  to 
do  or  not  to  do  a  particular  thing."  In  the  ordinary  form  it 
consists  of  an  agreement,  a  consideration,  and  a  thing  to  be 
done    ( 1 ) . 

An  Agreement 

An  agreement  is  the  meeting  of  the  minds  in  a  common 
intention,  and  it  implies  two  or  more  parties.  A  person  can  not 
make  a  contract  with  himself,  even  in  a  representative  capacity, 
because  there  is  only  one  mind  acting,  and  in  the  enforcement  of 
such  obligations  he  would  be  both  plaintiff  and  defendant  in  the 
same  action.  "It  takes  two  to  make  a  bargain"  (2,  3).  But  a 
note  or  bond  payable  to  the  maker  may  become  a  contract  by 
endorsement  to  another  person  (3).  The  common  intention  is 
that  upon  which  the  minds  of  the  parties  meet.  They  must  have 
consented  to  the  same  subject-matter  in  the  same  sense,  and  if 
there  is  no  such  mutual  assent,  there  is  no  agreement  (4). 
The  contract  is  not  what  either  party  thought,  but  what  both 
agreed   (5). 

Contracts  Executed  or  Executory 

The  contract  may  be  executed,  where  both  parties  have  done 
all  that  they  were  required  to  do ;  or  executory,  where  something 
is  still  to  be  done  by  one  or  both  parties.  A  void  contract  is 
one  that  has  no  legal  effect,  a  mere  nullity;  a  voidable  contract 
is  one  that  is  valid  until  it  is  set  aside  at  the  will  of  one  of 
the  parties;  an  unenforceable  contract  is  one  that  can  not  be 
enforced   because   of    some   legal    defect    (p.    10). 

Manner   of  Agreement 

The  manner  of  agreement  may  be  by  express  contract,  where 
the  parties  have  definitely  fixed  the  terms,  either  orally  or  in 
writing  (6)  ;  or  by  implied  contract,  where  the  agreement  is 
inferred  as  a  fact  from  the  conduct  of  the  parties.  Where  one 
person  performs  service  for  another,  for  which  one  might 
reasonably  expect  to  be  paid,  and  the  other  knowingly  accepts 
such  service,  there  is  an  implied  obligation  to  pay  what  the 
service    is    reasonably    worth;    but    if    the    other    party    has    no 

xix 


XX  SYNOPSIS. 

opportunity  to  accept  or  reject,  or  it  was  understood  that  the 
service  was  gratuitous,  there  is  no  obligation  to  pay  (7,  8).  The 
relation  of  the  parties  may  be  such  as  to  rebut  the  inference  of 
a  promise  to  pay,  as  between  parent  and  child  or  others  living 
in  the  "one  family"  relation  (9).  The  contract  may  also  be 
implied  in  law,  as  where  one  receives  money  which  belongs  to 
another,  or  is  compelled  to  do  some  act  for  which  the  other 
was  liable,  the  law  imposes  the  obligation  to  pay,  to  prevent 
injustice.  This  is  called  a  constructive  or  quasi  contract, 
because  it  is  enforced  by  an  action  ex  contractu,  though  consent 
is  wanting   (10,  11). 

Offer  and   Acceptance 

The  agreement  of  the  parties  resulting  in  contract  may 
generally  be  reduced  to  an  offer  and  acceptance.  The  offer 
expresses  the  intention  or  willingness  to  be  bound,  and  the 
acceptance  makes  the  obligation  complete,  changes  the  offer  into 
a  promise.  The  offer  must  be  in  such  form  that  upon  acceptance 
the  terms  of  the  agreement  are  definitely  fixed  (12).  The  offer 
must  be  communicated  to  the  other  party  before  he  can  accept 
it  (13)  ;  it  must  be  brought  to  his  attention  actually  or  con- 
structively, so  that  he  may  know  its  terms.  This  may  be  by  direct 
notice,  or  by  some  writing  which  the  party  accepts,  or  by 
circumstances  which  would  reasonably  lead  to  knowledge  of  the 
terms.  A  bill  of  lading,  an  express  receipt,  a  telegraph  blank, 
a  passenger  ticket  at  a  special  rate,  may  bind  the  holder  by  terms 
which  he  failed  to  read,  since  by  accepting  them  the  contract 
is  complete;  but  the  ordinary  passenger  ticket  at  the  regular 
fare  is  not  a  contract  in  itself,  being  only  in  the  nature  of  a 
receipt    or    token    of    payment    (14,    15). 

There  must  be  an  acceptance  of  the  offer,  and  this  acceptance 
must  be  communicated  (16).  An  intention  to  accept,  not  made 
known  to  the  other  party,  is  no  acceptance  (17).  Whether 
direct  notice  of  acceptance  must  be  given,  or  merely  doing  the  act 
indicated  will  be  sufficient,  will  depend  upon  the  nature  of  the 
offer.  In  an  absolute  guaranty,  or  guaranty  of  payment,  no 
notice  of  acceptance  is  required,  while  in  a  conditional  guaranty, 
or  guaranty  of  collection,  such  notice  is  necessary  (18).  If  the 
parties  are  at  a  distance  from  each  other,  an  offer  by  mail  or 
telegraph  is  a  continuing  offer  until  it  is  received,  and  the 
mailing  or  sending  the  message  of  acceptance  completes  the 
contract,  unless  it  is  otherwise  specified  in  the  offer  (19,  20). 
The  acceptance  must  be  in  the  manner  indicated  in  the  offer. 
Where  the  offer  indicates  that  the  other  person  shall  promise 
something,  notice  of  acceptance  is  required ;  but  where  it 
indicates   that    the    other   shall    do    some   act,    doing   the   act    may 


SYNOPSIS.  XXI 

be  sufficient  (21).  The  acceptance  must  be  identical  with  the 
terms  of  the  offer,  absolute  and  unconditional,  in  the  manner 
and  at  the  time  and  place  required  (22).  If  a  person  retains 
goods  or  money  sent  to  him  upon  condition,  it  is  an  acceptance 
of  the  condition    (23). 

Offer   may  be   Revoked 

An  offer  may  be  revoked  at  any  time  before,  but  not  after, 
acceptance.  An  offer  under  seal  is  said  to  be  irrevocable,  because 
it  is  a  deed,  a  thing  done,  and  the  assent  of  the  other  party 
is  presumed  until  it  is  rejected  (24).  In  an  option,  which  is 
a  continuing  offer,  if  the  acceptance  is  within  the  time  specified, 
the  contract  is  complete,  unless  the  offer  has  been  withdrawn ; 
if  the  option  is  based  upon  a  consideration,  it  can  not  be  with- 
drawn, but  is  binding  until  the  time  expires.  Timber  contracts 
for  cutting  and  removing  timber  within  a  certain  time  are  in 
the  nature  of  options,  and  the  purchaser  must  exercise  his 
right  within  the  time  specified.  A  lease  with  an  option  to 
purchase,  can  not  be  revoked  during  the  term  (25).  In  a 
broker's  contract  for  sale,  his  right  to  commissions  depends 
upon  his  success  in  effecting  a  sale  before  his  power  has  been 
revoked  by  the  owner  in  good  faith  (26).  To  be  effective  the 
revocation  of  an  offer  must  be  communicated,  where  express 
revocation  is  necessary  (19)  ;  the  offer  may  also  lapse  by 
failure  to  accept  within  the  time  specified  or  within  a  reason- 
able time,  or  by  a  qualified  acceptance  or  rejection,  or  by  the 
death  or  insanity  of  either  party  before  acceptance  (17,  19. 
20,   27,   p.    59).  ' 

Rewards  and  Auctions 

Offers  may  be  made  to  the  public  instead  of  to  a  par- 
ticular individual,  as  in  the  case  of  rewards  and  auctions.  In 
the  case  of  rewards  the  person  performing  the  service  is  en- 
titled to  the  reward,  provided  he  knew  of  the  offer,  though 
it  is  also  held  that  such  knowledge  is  immaterial.  An  officer 
whose  duty  it  is  to  perform  the  service  can  not  claim  the 
reward,  unless  authorized  by  statute.  The  offer  of  reward 
may  be  revoked  at  any  time  by  notice  in  the  same  way  the 
offer  was  made,  or  by  the  lapse  of  time   (28). 

In  auctions,  the  property  is  exposed  to  sale  as  an  invitation 
to  deal,  the  bid  is  an  offer  to  buy,  and  it  is  accepted  and  the 
contract  is  complete  when  the  hammer  falls.  Before  the  ham- 
mer falls,  the  property  may  be  withdrawn,  or  the  bidder 
may  withdraw  his  bid.  In  sales  under  an  order  of  court, 
the  accepted  bidder  acquires  no  rights  until  the  sale  is  con- 
firmed by  the  court.  The  auctioneer  is  the  agent  of  seller 
and    bidder    to    bind    them    to    the    sale.     If    the    bidder    fails    to 


xxii  SYNOPSIS. 

comply   with   his   bid,   he   may   be   sued   for   the   price,   or  a   new 
sale  may   be   had  and   he   may   be   held    for   the   difference    (29). 

Agreement  Complete  and  Definite 

The  offer  and  acceptance  must  be  intended  to  affect  the 
legal  relations  of  the  parties,  and  acts  which  are  done  out 
of  charity  or  benevolence,  or  which  concern  social  relations  alone, 
can  not  create  contract  obligations  (30).  If  there  is  only  pretend- 
ed consent,  as  where  the  parties  go  through  the  form  in  jest  or  as 
a  sham,  with  no  intention  of  being  bound,  there  is  no  con- 
tract (31).  The  agreement  must  be  complete,  and  the  terms 
definite  and  certain.  If  the  offer  is  in  the  nature  of  an  ad- 
vertisement, notice,  or  invitation  to  deal,  acceptance  does  not 
make  the  contract.  In  public  contracts  to  the  lowest  bidder, 
there  is  generally  the  discretion  to  reject  any  bid  (32).  If 
the  parties  have  not  completed  their  agreement,  there  is  no 
contract ;  as,  where  they  fix  a  time  and  place  to  complete 
their  agreement,  and  this  is  not  done  (S3)  ;  but  the  mere  in- 
tention to  reduce  their  agreement  to  writing  does  not  render 
the  contract  incomplete,  if  the  parties  intended  to  be  bound  by 
the  terms  and  the  writing  was  to  be  only  the  means  of  pre- 
serving or  proving  the  agreement  (34).  When  a  writing  is 
signed  upon  a  condition  which  is  not  complied  with,  there  is 
no  contract  as  between  the  parties,  though  the  rights  of  innocent 
third  persons  might  be  protected  (34,  215,  216).  If  the  terms 
of  the  agreement  are  too  uncertain  and  indefinite  for  the  court 
to  ascertain  the  meaning,  there  is  no  contract ;  the  court  can 
not  guess  at  the  meaning.  If  the  terms  refer  to  something  by 
which  they  may  be  rendered  definite,  that  will  be  sufficient 
under  the  maxim  id  certum   est   quod  certum   reddi   potest    (35). 

Classification  of  Contracts 

Contracts  are  classified,  in  regard  to  form,  into  Contracts 
(if  Record;  Contracts  under  Seal,  or  Specialties;  and  Simple  or 
Parol  Contracts,  which  may  be  either  oral  or  written.  Con- 
trary ot'  Record  are  Judgments  and  Recognizances.  Judgments 
arc  contracts  only  in  a  limited  sense;  they  are  assignable,  and 
may  he  sued  on  in  an  action  ex  contractu,  being  quasi-con- 
tractual  in  nature;  hut  they  are  not  negotiable,  and  are  not 
extended  nor  revived  by  a  payment  or  a  new  promise  in 
writing.  The  manner  of  entering  .and  enforcing  judgments 
i^  regulated  by  statute,  and  when  properly  rendered,  they  operate 
a-  an  estoppel  or  res  judicata,  and  merge  lower  forms  of 
contract  1 36.  264).  Recognizances  are  obligations  acknowledged 
of  record,  and  generally  hind  the  parties  to  three  things:  To 
appear  and  answer  a  specific  charge;  to  abide  the  order  of  the 
courl  ;    and    not    depart    the    court    without    leave.      Upon    breach 


SYNOPSIS.  XX111 

they   are  enforced  by   judgment   nisi,   sci.    fa.,   and   judgment   ab- 
solute   (37). 

Contracts  under  Seal 

Contracts  under  seal  are  called  specialties,  deeds  or  bonds, 
and  the  seal  is  the  distinguishing  characteristic.  They  derived 
their  effect  and  importance  from  the  formality  and  the  de- 
liberation implied  in  their  execution.  A  deed  is  a  writing,  signed, 
sealed  and  delivered.  A  bond  is  the  acknowledgment  of  d 
debt  under  seal.  There  must  be  a  grantor  and  a  grantee, 
an  obligor  and  an  obligee,  and  a  thing  granted  or  sum  to  be 
paid.  A  deed  must  be  complete  and  executed  by  the  grantor 
or  by  an  agent  authorized  under  seal  (38,  39).  A  consideration 
is  not  required  in  sealed  contracts  at  law,  but  in  equity  a  con- 
sideration is  necessary,  or  if  the  consideration  is  illegal  it  may 
render  the  contract  void  (40,  71).  The  deed  may  be  signed 
by  the  party  himself,  by  another  for  him  in  his  presence,  or 
by  agent  with  authority  under  seal.  The  signature  may  be  in 
the  body  of  the  deed  or  at  the  end,  and  may  be  either  the  full 
name,  the  initials,  or  by  mark.  If  the  deed  is  signed  by  one 
whose  name  does  not  appear  in  the  instrument,  it  is  not  bind- 
ing, unless  there  is  enough  in  the  instrument  to  indicate  its 
character  and  effect  as  to  him.  In  the  formal  execution,  an 
indenture  was  a  deed  executed  in  as  many  parts  as  there  were 
parties,  while  a  deed  poll  was  signed  by  the  grantor  alone 
and  made  binding  upon  the  grantee  by  acceptance  (41,  42). 
Sealing  was  formerly  an  impression  upon  wax,  but  it  is  now 
generally  a  mark  or  scrawl  used  to  indicate  the  presence  of  a  seal 
Whether  there  is  a  seal  is  a  question  of  fact,  whether  it  is 
sufficient  is  a  question  of  law.  Two  persons  may  adopt  the 
same  seal,  but  one  partner  can  not  bind  the  firm  under  seal  in  con- 
tracts requiring  the  use  of  a  seal.  The  recital  in  the  instrument 
that  it  is  under  seal,  when  in  fact  none  is  used,  is  insufficient ;  and 
in  some  States  the  use  of  a  seal  without  such  recital  is  insufficient. 
In  many  States  the  necessity  and  effect  of  a  seal  have  been  modi- 
fied or  abolished  by  statute  (38,  43). 

Delivery   of    Deed 

Delivery  of  a  deed  is  the  parting  with  the  possession  of  it 
by  the  grantor  to  the  grantee,  or  to  someone  for  the  grantee, 
so  as  to  place  it  beyond  the  control  of  the  grantor  (44).  There 
is  no  set  form  necessary ;  any  words  or  acts  which  show  tne 
intention  will  be  sufficient,  provided  there  is  the  parting  with 
the  control  over  the  instrument  by  the  grantor.  If  the  deed  is 
delivered  to  the  grantee  or  to  his  agent  for  that  purpose,  it  is 
complete ;  if  delivered  to  a  third  person  for  the  benefit  of  the 
grantee,  it  is  valid  until  rejected ;  if  delivered  to  a  third  person  for 


xxiv  SYNOPSIS. 

the  grantor,  it  is  no  delivery.  Possession  of  the  deed  by  the 
grantee,  or  probate  and  registration,  will  be  prima  facie  evidence  of 
delivery  (45,  46).  Delivery  vests  the  title  in  the  grantee,  and  the 
grantor  can  not  recall  it;  but  a  deed  may  be  surrendered  before 
registration,  if  there  is  no  fraud,  or  the  rights  of  third  persons 
have  not  intervened ;  a  married  woman,  however,  should  reconvey 
^44^  46).  Attestation  is  not  necessary,  though  the  execution  must 
be  acknowledged  or  proved;  and  if  signed  by  a  witness,  it  may 
be  by  mark,  initials,  or  in  any  way  to  be  identified  (41,  46,  p. 
103).  A  date  is  not  necessary,  since  the  deed  takes  effect  from 
delivery,  and  it  is  presumed  to  have  been  delivered  at  the  date 
given  in  the  deed  (p.  103).  Acceptance  by  the  grantee  is  required 
but  since  it  is  for  his  benefit,  acceptance  is  presumed  until  the 
contrary  is  shown.  If  rejected,  a  new  delivery  is  required  (45, 
p.  103).  An  escrow  is  a  deed  delivered  to  a  third  person,  to  be 
given  to  the  grantee  upon  some  condition.  It  takes  effect  from 
the  first  delivery,  unless  there  is  a  clear  intention  to  the  contrary; 
but  a  delivery  to  the  grantee  is  not  an  escrow.  If  an  instrument 
is  signed  by  one  obligor,  to  be  valid  when  signed  by  others,  and 
it  is  delivered  to  the  obligee  without  such  signatures,  it  is  valid, 
if  the  obligee  did  not  know  of  such  condition   (47). 

Registration    of    Deed 

Registration  of  a  deed  is  not  necessary  between  the  parties,  but 
it  is  necessary  as  against  the  claims  of  creditors  and  purchasers 
(p.  107).  Bonds  were  not  negotiable  until  made  so  by  statute,  and 
even  then  they  required  endorsement,  but  now  the  seal  does  not 
affect  negotiability  (45,  p.  108).  The  effect  of  a  deed  is  to  estop 
the  grantor  and  those  claiming  under  him,  and  the  grantee  by  ac- 
ceptance is  bound  by  the  terms  of  the  deed.  Recitals  in  a  deed 
are  conclusive  when  of  the  essence  of  the  contract,  but  the  recital 
of  the  payment  of  consideration  may  be  contradicted.  A  deed 
also  merges  lower  forms  of  contract   (pp.   108,   109). 

Statute  of  Frauds 

Simple  or  parol  contracts  are  either  oral  or  written,  this  merely 
affecting  the  method  of  proof;  but  by  the  statute  of  frauds  certain 
contracts  are  required  to  be  in  writing.  The  English  Statute  of 
Frauds,  29  Chas.  II.,  contained  several  sections,  those  particularly 
affecting  contracts  being  sections  four  and  seventeen  (p.  110). 
These  have  not  been  fully  adopted  in  North  Carolina.  Section  4 
ntains  the  following  contracts:  1.  A  special  promise  by  an  ex- 
\itor  nr  administrator  to  answer  dmnages  out  of  his  own  estate. 
Tin-  must  he  in  writing,  and  if  based  upon  a  sufficient  considera- 
tion. a>  having  assets,  forbearance,  etc.,  it  will  bind  him  personal- 
ly, unless  the  liability  is  limited  by  express  terms  in  the  instru- 
ment   (48,  49).     2.  A  special  promise  to  answer  for  the  debt,  de- 


SYNOPSIS.  XXV 

fault  or  miscarriage  of  another.  This  must  be  in  writing,  and  the 
new  promise  must  be  added  to  the  original  liability,  which  must 
continue.  It  does  not  apply  to  a  promise  substituted  for  the  orig- 
inal promise ;  to  a  promise  made  to  the  debtor  himself ;  to  pay  out 
of  the  debtor's  property;  a  promise  made  for  the  advantage  of  the 
promisor ;  when  credit  is  given  to  the  promisor  alone ;  or  when 
the  original  debt  is  invalid.  Contracts  of  guaranty  generally  come 
within  the  statute,  while  the  decisions  as  to  indemnity  contracts 
are  not  uniform.  In  some  States,  a  representation  relating  to  the 
credit  of  another  person  must  be  in  writing  to  bind  the  person 
making  it  (50,  51,  52). 

Land   Contracts 

3.  Contracts  to  sell  or  convey  land,  or  any  interest  therein. 
This  includes  any  interest  in  land,  legal  or  equitable,  easements, 
all  leases  for  more  than  three  years  (in  some  States  for  more 
than  one  year),  and  all  mining  leases  (53,  54).  Growing  trees, 
fructus  naturales,  are  considered  a  part  of  the  realty  (55)  ;  groiv- 
ing  crops,  fructus  industrials,  are  considered  as  personalty  ;  the 
latter  if  unsevered  are  presumed  to  pass  with  the  land,  but  may 
be  excepted  by  parol  (56).  The  statute  does  not  apply  to  agree- 
ments for  money  arising  out  of  land  contracts ;  as,  for  partner- 
ship agreements,  for  services  in  selling  land,  to  pay  for  deficiency 
in  acres,  part  of  the  proceeds  of  sale,  etc.  A  contract  for  land 
may  be  rescinded  by  parol,  but  such  rescission  must  be  acted  upon 
by  the  parties  (57,  p.  138). 

In  Consideration  of  Marriage 

4.  Contracts  in  consideration  of  marriage  must  be  in  writing. 
This  does  not  include  mere  promises  of  marriage,  but  applies  to 
contracts  affecting  property  rights  hased  upon  the  consideration  of 
marriage.  This  section  is  not  in  force  in  North  Carolina,  and 
hence  such  contracts  may  be  oral  except  when  they  come  under 
some  other  section,  as  for  land  (58).  5.  Contracts  not  to  be 
performed  within  a  year  must  be  in  writing.  This  includes  only 
those  contracts  which  by  a  fair  and  reasonable  interpretation  do 
not  admit  of  performance  within  a  year  from  the  time  they  were 
made.     This  has  not  been  adopted  in  North  Carolina   (59). 

Goods,  Wares,  Merchandise   Contracts 

Section  17  of  the  English  statute  provides  that  contracts  for 
the  sale  of  goods,  wares  and  merchandise  for  £10  or  upwards 
must  be  in  writing  unless  the  buyer  accept  and  receive  part  of  the 
goods,  or  give  something  in  earnest  to  bind  the  bargain  or  in  part 
payment.  If  the  contract  is  for  goods  manufactured  for  sale  gen- 
erally, it  is  within  the  statute,  but  if  the  goods  are  to  be  made 
for  the  purchaser  specially,  it  is  not  within  the  statute.  This  sec- 
tion has  not  been  adopted  in  North  Carolina    (60). 


XXVI  SYNOPSIS. 

Statute  of  Frauds,  Requirements  and  Effect 

The  statute  of  frauds  requires  the  contract,  or  some  memor- 
andum thereof,  to  be  in  writing  and  signed  by  the  party  to  be 
charged  therewith,  or  by  some  other  person  by  him  lawfully 
authorized  thereto.  The  writing  should  show  the  parties,  the 
subject-matter,  the  terms,  and  be  signed  by  the  party  to  be 
charged  therewith,  that  is,  the  defendant  in  an  action  to  enforce 
it.  It  may  be  signed  anywhere  in  the  writing,  and  if  by  agent, 
his  authority  need  not  be  in  writing.  A  consideration  is  neces- 
sary to  the  contract,  and  most  courts  require  that  it  should  ap- 
pear in  the  writing,  but  it  is  otherwise  in  North  Carolina.  If 
there  are  several  papers,  they  must  be  connected  or  refer  to  each 
other  in  some  way.  Since  the  writing  is  only  evidence  that  the 
contract  was  made,  neither  sealing,  delivery,  nor  registration  is 
required  (61,  62).  If  the  statute  has  not  been  complied  with,  it 
renders  the  contract  voidable  at  the  option  of  the  defendant.  If 
the  statute  is  not  pleaded  and  the  defendant  submits  to  perform 
the  contract,  the  court  will  enforce  it ;  if  the  defendant  denies  the 
contract,  or  sets  up  a  different  contract,  or  expressly  plead?  the 
statute,  the  plaintiff  can  not  proceed  because  the  writing  is  the 
only  admissible  evidence.  The  vendor,  if  bound  orally,  may  re- 
pudiate when  sued  or  may  sue  for  the  land;  the  vendee,  if  bound 
orally,  may  repudiate  when  sued,  but  he  can  not  sue  for  the  money 
paid  when  the  vendor  is  bound  or  is  willing  to  perform  the  con- 
tract. Strangers  to  the  contract  can  not  take  advantage  of  the 
statute.  Under  the  equitable  doctrine  of  part  performance,  the 
contract  may  be  specifically  enforced  as  if  it  were  in  writing;  but 
this  has  not  been  accepted  in  North  Carolina,  and  the  vendor  may 
recover  the  land,  subject  to  payment  for  improvements  placed  on  it 
by"  the  purchaser.  The  statute  of  frauds  does  not  apply  to  ex- 
ecuted contracts,  nor  to  obligations  created  by  law  (63,  64,  65,  pp. 
157-159). 

Consideration  Necessary 

A  consideration  is  necessary  to  support  a  simple  contract  ;  it  m.iet 
be  a  valuable  consideration  ;  without  this,  the  contract  is  a  nudum 
pactum.  A  valuable  consideration  is  some  benefit  or  advantage 
to  the  promisor,  or  some  detriment  or  disadvantage  to  the 
promise.  It  is  that  which  passes  from  the  promisee  to  the 
promisor  in  return  for  his  promise,  and  the  detriment  or  loss  to 
tin-  promisee  is  the  important  part.  It  is  not  necessary  that  the 
]>r<>niw>r  be  benefited,  if  the  promisee  has  parted  witli  some  right 
which  he  may  lawfully  exercise  (66).  The  consideration  is  to  be 
distinguished  from  the  motive  or  purpose  in  view  in  making  the 
contact  (67).  Neither  a  good  consideration,  based  upon  love  and 
affection,    nor   a    moral    obligation    will   be    sufficient   to    support   a 


SYNOPSIS.  XXV11 

contract  (68,  69).  Contracts  under  seal,  on  account  of  their  form, 
do  not  require  a  consideration,  except  where  equitable  relief  is 
sought,  and  in  contracts  in  restraint  of  trade  (40,  70,  71).  In 
negotiable  instruments  a  valuable  consideration  is  presumed,  but 
the  contrary  may  be  shown  except  against  a  bona  fide  holder  in 
due  course  (72).  If  the  performance  of  a  gratuitous  act  is  un- 
dertaken and  entered  upon,  the  confidence  reposed  is  a  sufficient 
consideration  to  bind  the  party,  but  the  mere  promise  to  do  a 
gratuitous  act  is  not  enforceable   (73). 

Sufficient  Consideration 

Inadequacy  of  consideration  does  not  generally  affect  the  con- 
tract, since  the  parties  have  the  right  to  determine  the  value 
themselves ;  but  inadequacy  may  be  evidence  of  fraud  or  im- 
position, and  it  will  also  be  considered  in  the  exchange  of  values 
fixed  by  law  (74).  Various  things  have  been  held  by  the  courts 
to  constitute  a  sufficient  consideration;  as,  marriage  (75),  mutual 
promises  (76,  77),  forbearance  to  exercise  a  right  (80,  81),  the 
compromise  of  doubtful  claims  (82).  Contingent  promises  may 
not  be  sufficient  for  want  of  mutuality,  as  in  contracts  for  the 
future  delivery  of  personal  property  where  the  quantity  is  depen- 
dent upon  the  will,  wish  or  want  of  one  of  the  parties ;  these  are 
valid,  however,  if  the  quantity  to  be  furnished  is  ascertainable 
with  reasonable  certainty  (78).  Voluntary  subscriptions  have 
been  sustained  as  upon  sufficient  consideration  for  various  rea- 
sons, as  upon  mutual  promises,  benefits  conferred,  or  expense  in- 
curred based  upon  these  (79).  A  promise  to  do  what  one  is  al- 
ready bound  to  do,  either  by  agreement  or  by  law,  is  no  con- 
sideration for  a  promise  to  pay  more,  unless  the  parties  have 
virtually  rescinded  their  former  contract  (83,  84).  At  common 
law  part  payment  of  a  fixed  debt  was  no  consideration  for  a 
promise  to  release  the  balance  due,  but  it  might  sometimes  be 
sustained  as  an  accord  and  satisfaction,  and  it  is  now  a  satisfac- 
tion by  statute  if  so  intended  (85).  A  promise  to  do  an  impos- 
sible thing,  that  which  is  practically  impossible  according  to  the 
state  of  knowledge  at  the  time,  is  without  consideration  (86.)  A 
promise  that  is  too  indefinite  or  uncertain  for  the  court  to  know 
what  is  to  be  done,  or  a  promise  to  do  an  unlawful  act,  is  with- 
out consideration  (35,  144).  A  past  consideration  is  not  sufficient 
unless  it  is  based  upon  a  previous  request,  express  or  implied,  or 
upon  some  prior  legal  obligation  which  has  been  suspended  by 
some  rule  of  law  (87,  88,  89). 

Capacity    to    Contract 

There  must  be  parties  capable  of  entering  into  contract  rela- 
tions and  this  will  depend  upon  various  circumstances  determining 
the  legal  or  personal  capacity.     The  United  States  and  the  State 


XXV111  SYNOPSIS. 

may  make  contracts  for  the  purposes  of  government,  through  their 
properly  authorized  agents ;  and  actions  may  be  brought  for  the 
government  by  the  proper  officers,  and  against  the  government  in 
the  manner  indicated  by  law.  The  different  departments  and  in- 
stitutions of  the  State  are  only  agencies  of  government,  and  they 
may  make  contracts  and  sue  and  be  sued  only  as  authorized  by 
statute    (90,   91). 

Corporations 

Municipal  corporations,  as  counties,  cities,  towns,  etc.,  are  also 
agencies  of  government,  with  special  powers  conferred  upon  them, 
and  they  may  make  contracts  within  such  powers.  They  may  con- 
tract for  necessary  expenses,  as  for  roads,  streets,  public  buildings, 
water,  lights,  etc.,  without  further  authority,  but  for  other  than  nec- 
essary expense  they  must  have  the  consent  of  the  people  by  popular 
vote,  and  also  legislative  sanction  in  the  manner  required  by  the 
Constitution  (92,  93).  Private  corporations  are  organized  as  the 
result  of  contract,  and  they  may  exercise  only  the  powers  con- 
ferred upon  them  by  their  charters  (94,  95).  They  can  contract 
only  as  a  corporate  body  or  through  an  agent  authorized  by  cor- 
porate action ;  a  contract  made  by  the  consent  of  the  individual 
members,  not  in  a  corporate  meeting,  is  not  the  contract  of  the 
corporation.  The  corporate  seal  is  not  necessary  for  a  corporate 
act,  except  in  contracts  otherwise  requiring  a  seal,  but  the  use  of 
the  corporate  seal  implies  the  authority  of  the  corporation  for  the 
act  (96).  That  a  contract  is  ultra  vires  will  not  defeat  the  liabil- 
ity of  the  corporation,  if  it  has  received  the  benefit  or  the  other 
party  has  dealt  with  it  to  his  injury,  unless  the  contract  is  one 
expressly   forbidden  by   law    (97). 

Contracts   of  Infants 

The  contract  rights  of  aliens  are  fixed  by  statute,  and  these  may 
be  suspended  as  to  alien  enemies  in  time  of  war.  Attorneys  and 
physicians  were  formerly  considered  as  exercising  their  skill  only 
for  the  honor,  but  they  may  now  contract  for  compensation.  Per- 
sons restrained  in  prison  do  not  thereby  lose  their  right  to  make 
a  contract  (98).  infants  are  under  disability  to  contract  until 
they  reach  the  age  of  twenty-one.  At  common  law  some  of  their 
contracts  were  considered  void,  some  voidable,  and  others  valid, 
while  the  modem  tendency  is  to  consider  all  their  contracts  void- 
able at  the  option  of  the  infant.  It  is  held  that  an  infant  may  be 
an  agent  but  he  can  not  appoint  an  agent;  or  if  too  young  to  have 
understanding,  his  acts  would  be  void  (99).  An  infant  is  liable 
for  necessaries,  unless  living  with  the  father  or  there  is  a  guardian  ; 
and  what  are  necessaries  will  depend  upon  the  circumstances  of 
the  infant,  including  such  things  as  concern  the  care  of  himseli 
and    family,    and    not    for    the    protection    or    improvement    of    his 


SYNOPSIS.  XXIX 

property  (100,  101).  The  infant  may  avoid  his  contracts  as  to 
personalty  at  any  time ;  but  as  to  realty,  only  after  coming  of  age ; 
and  he  may  ratify  his  contracts  after  coming  of  age  (102,  103, 
104).  Avoidance  or  ratification  may  be  by  word  or  act,  but  rati- 
fication of  an  executory  contract  requires  an  express  promise  or 
an  unequivocal  act,  with  the  knowledge  that  he  is  not  legally 
bound.  The  ratification  or  avoidance  must  be  of  the  entire  con- 
tract ;  and  in  case  of  avoidance,  if  he  has  the  consideration  re- 
ceived, the  other  party  is  entitled  to  it,  but  the  infant  is  not  liable 
for  wasting  it  during  infancy.  He  is  not  estopped  by  misrepre- 
senting his  age,  nor  is  he  liable  for  torts  connected  with  his  con- 
tracts (105,  106). 

Contracts  of  Insane  Persons 

Insane  persons  may  plead  such  disability  to  avoid  a  contract, 
but  sanity  is  generally  presumed  until  the  contrary  is  shown 
(107).  The  test  of  capacity  is  that  the  person  shall  be  able  to 
understand  what  he  is  about  (108).  An  inquisition  of  lunacy  is 
sometimes  held  to  be  conclusive,  but  in  North  Carolina  it  is  only 
presumptive  evidence,  except  perhaps  as  to  those  directly  con- 
nected with  the  inquisition.  A  marriage  of  a  lunatic  is  voidable, 
and  may  be  declared  void  ab  initio  by  a  decree  of  court  (109). 
The  liability  for  necessaries  is  the  same  as  that  of  infants,  but  it 
extends  also  to  the  care  of  property,  and  the  existence  of  a  guar- 
dian does  not  defeat  it  (110).  Their  contracts  are  voidable,  as  a 
rule ;  but  where  one  has  dealt  with  the  lunatic  in  good  faith,  with- 
out knowledge  of  the  disability,  for  a  fair  consideration,  and  no 
advantage  is  taken,  he  will  be  protected,  and  if  the  contract  should 
be  set  aside  the  consideration  must  be  restored  (111).  Drunken 
persons  are  in  the  same  class  as  lunatics,  so  far  as  their  contracts 
are  concerned.  If  one  is  so  drunk  that  he  does  not  know  what 
he  is  doing,  his  contract  is  void,  or  at  any  rate  voidable  for  want 
of  capacity;  while  if  the  other  has  taken  advantage  of  an  in- 
toxicated condition  to  induce  him  to  make  the  contract,  it  may  be 
set  aside  for  fraud  (112). 

Contracts  of  Married  Women 

Married  women,  at  common  law,  could  not  make  contracts  that 
would  be  binding  upon  them  except  in  special  cases ;  in  regard  to 
their  separate  estate,  which  was  the  creature  of  equity,  their  con- 
tracts could  be  enforced  by  way  of  charge  against  such  estate 
(113).  Under  the  Constitution  and  statutes  her  property  rights 
and  powers  of  contract  have  been  materially  changed.  Under  the 
law  in  North  Carolina  before  1911,  she  could  contract  as  a  feme 
sole  as  a  freetrader;  she  could  dispose  of  her  personalty  by  gift  or 
executed  contract ;  she  could  bind  her  separate  personal  estate 
without  the  consent   of   her  husband,    for  necessary   personal   ex- 


XXX  SYNOPSIS. 

pense,  for  the  support  of  the  family,  and  to  pay  ante-nuptial 
debts ;  all  other  contracts  affecting  her  personalty  were  with  the 
written  consent  of  the  husband  and  charged  her  separate  estate 
either  expressly  or  by  implication.  Her  contracts  affecting  realty 
were  with  the  joinder  of  her  husband,  private  examination,  and 
charging  the  estate ;  and  as  to  her  equitable  separate  estate,  her 
power  was  still  further  limited  by  the  terms  of  the  instrument 
creating  it.  She  incurred  no  personal  liability  under  a  contract, 
except  by  statute ;  and  she  was  not  estopped  by  anything  in  the 
nature  of  contract,  though  she  might  be  estopped  by  fraud  to  claim 
property  under  an  alleged  contract  (114,  pp.  289-292).  Under 
the  Act  of  1911,  there  is  no  restriction  as  to  her  power  to  contract, 
except  as  to  contracts  made  with  her  husband,  and  in  conveyances 
of  realty    (115,  pp.   289-292). 

Mistake  and  Misrepresentation 

The  real  consent  of  the  parties  to  a  contract  may  be  wanting 
on  account  of  Mistake,  Misrepresentation,  Fraud,  Duress,  or  Un- 
due Influence.  Mistake  is  an  erroneous  impression  of  one  or  both 
parties  as  to  some  material  part  of  the  contract,  and  not  arising 
out  of  fraud  or  negligence.  The  mistake  may  be  in  regard  to  the 
nature  of  the  instrument  signed  (116,  117)  ;  or  as  to  the  identity 
of  the  person  dealt  with  (118)  ;  or  as  to  the  identity  or  the  ex- 
istence of  the  subject-matter  (119,  129).  In  these  cases  there 
would  be  no  contract  because  the  minds  of  the  parties  do  not 
meet.  If  the  mistake  is  in  regard  to  the  nature  or  quality  of  the 
subject-matter,  where  the  party  gets  the  article  contracted  for,  it 
does  not  affect  the  contract,  in  the  absence  of  fraud  (121,  122). 
A  mutual  mistake  as  to  a  material  part  may  be  ground  for  rescis- 
sion, or  for  correction  of  a  written  instrument  where  it  does  not 
properly  express  the  terms  of  the  agreement,  unless  the  rights  of 
third  persons  have  intervened ;  but  a  unilateral  mistake,  in  the 
absence  of  fraud  or  imposition,  is  not  ground  for  relief  (123,  124, 
125).  A  mistake  of  law  is  not  generally  ground  for  relief,  as 
where  the  parties  execute  the  instrument  intended  but  are  mis- 
taken as  to  its  legal  effect ;  but  where  there  is  fraud  or  circum- 
stances of  imposition  equity  will  grant  relief  (126).  Misrepre- 
sentation is  an  innocent  misstatement,  which  does  not  affect  the 
contract,  unless  it  enters  into  it  as  a  material  term,  or  the  parties 
stand  in  such  relation  that  one  must  rely  upon  the  other.  A 
material  term  in  the  contract  may  be  a  condition  upon  which  the 
contract  may  be  avoided,  or  a  warranty  which,  in  the  nature  of 
a  collateral  agreement,  may  give  rise  to  a  cause  of  action  for 
damages.  In  insurance  contracts  warranty  is  used  in  the  sense 
of  condition,  and  under  the  statute  all  statements  in  such  con- 
tracts are  considered   representations   and  not   warranties,   and   do 


SYNOPSIS.  XXXI 


not  affect  the  contract  unless  they  are  material  or  fraudulent  (127, 
128). 

Fraud 

Actual  fraud  is  generally   defined  as  a   misrepresentation  of   a 
material  fact,  false  within  the  knowledge  o"f  the  party  making  it, 
reasonably  relied  on  by  the  other  party,  intended  to  deceive,  and 
which  does  deceive  the  other  party  to  his  injury.     The  rule  caveat 
emptor  applies  if  the  means  of   information  are   equally  open  to 
both  parties,  unless  inquiry  is  prevented  by  the  act  of  the  other 
party  (129).     Mere  silence  or  nondisclosure  may  amount  to  fraud, 
when  it  is  the  duty  of  the  party  to  speak,  as  in  the  case  of  latent 
defects  (130).     A  material  fact  is  one  that  would  have  prevented 
the  contract,  if  it  had  been  known  (131)  ;  the  present  intention  of 
the  party  may  be  such  a  material  fact,  but  the  opinion  of  a  party 
as  to  value,  etc.,  is  not  generally  material  unless  the  parties  are 
in   unequal   positions    (132,    133).     The   statement    must   be    false 
within   the  knowledge   of   the   party    making   it,   that    is,   what   he 
knows  to  be  false  or  does  not  know  to  be  true;  this  is  called  the 
scienter  (134,  135).     The  statement  must  be  reasonably  relied  on 
by  the  other  party,  that  is,  he  must  use  reasonable  care  to  pro- 
tect himself,  but  it  is  held  that  the  guilty  party  can  not  plead  the 
negligence  of  the  other  as  an  excuse  for  his  positive  fraud  (136). 
The  statement  must  be  intended  to  deceive  and  actually  deceive 
the  other  to  his  injury.     Fraud  without  damage,  or  damage  with- 
out fraud,  gives  no  cause  of  action   (137).     In  the  execution  of 
written    instruments,    if    the   party    is    deceived   and    executes    one 
different   from  the  one  intended,   it   is  fraud  in  the  factum,  and 
will  render  the  instrument  void,  if  the  maker  has  not  been  guilty 
of  negligence;  but  if  he  executes  the  instrument  intended,  and  is 
induced  to  do  so  by  fraud,  it  is  fraud  in  the  inducement  or  treaty 
and   the   instrument   will   be   valid   until   set   aside    for   the    fraud 
(138).     Fraud,  except  in  the  factum,   renders  the  contract   void- 
able, and  the  injured  party  may  have  the  choice  of  several  reme- 
dies.    He  may  repudiate  the  contract,  tender  back   what  he   has 
received,  and  sue  at  law  to  recover  what  he  has  parted  with;  or 
he  may  affirm  the  contract,  keep  the  property,  and  recover  dam- 
ages for  the  deceit ;  or  he  may  wait  until  he  is  sued  and  set  up 
the   fraud  as   a   defense  or  as   a  basis   of   a  claim    for   damages ; 
whether   he   may   rescind   and   also   set   up   a   claim    for   damages 
will   depend  upon  whether  the  rescission  will  place  him  in  statu 
quo.     In  a  proper  case  in  equity,  he  may  sue  for  recission,  can- 
cellation  or  correction,   or  resist   a   suit    for   specific   preformance 
(139).      Where   the    rights    of    innocent   third    persons    intervene, 
they  will  be  protected,  upon  the  doctrine  that  where  one  of  two 
innocent  persons  must  suffer  from  the  fraud  of  a  third,  the  loss 


xxxii  SYNOPSIS. 

will  fall  upon  him  who  first  reposed  the  confidence  (140).  Con- 
structive fraud  arises  where  the  contract  is  between  parties  oc- 
cupying a  fiduciary  relation,  and  it  is  presumed  as  a  matter  of 
law  from  this  relation.  Where  the  contract  and  this  relation  are 
shown,  the  burden  is  upon  the  fiduciary  to  show  that  he  did  not 
take  advantage  of  his  position  ;  but  if  the  relation  is  only  that  of 
friendly  confidence,  it  is  merely  evidence  of  fraud,  and  the  in- 
jured party  must  show  the  confidence  reposed  and  abused   (141). 

Duress 

Duress  is  the  overcoming  of  the  will  of  one  party  by  violence, 
actual  or  threatened,  by  the  other  party,  and  may  be  either  by 
imprisonment  or  by  threats.  If  the  imprisonment  is  without  just 
cause,  or  if  for  a  proper  cause  but  for  an  improper  purpose,  a 
contract  growing  out  of  it  may  be  avoided  (142).  In  duress  by 
threats  the  violence  must  be  such  as  to  overcome  the  will  of  the 
person,  and  this  violence  may  be  directed  to  the  person  himself, 
to  his  family  or  property.  The  contract  induced  by  duress  is  gen- 
erally voidable,  and  the  injured  party  must  proceed  within  a  rea- 
sonable time  after  the  force  is  removed  (143).  Undue  influence 
results  from  the  exercise  of  some  control  over  the  will  of  one 
party  by  the  other,  arising  from  some  confidence  reposed,  or  some 
advantage  taken  of  his  peculiar  condition,  and  may  render  the 
contract  voidable   (p.  361). 

Illegal  Consideration  or  Purpose 

The  tiling  to  be  done  in  the  contract  must  be  lawful.  If  it  is 
for  an  illegal  consideration  or  for  an  illegal  purpose,  it  is  void, 
in  the  sense  that  the  law  will  not  aid  either  party  to  such  agree- 
ment. The  illegality  may  result  from  an  agreement  in  violation 
of  common  law,  as  to  commit  a  civil  trespass ;  but  where  one 
employs  another  to  do  what  he  has  an  apparent  right  to  do,  and 
agrees  to  indemnify  him  against  loss,  such  agreement  is  valid,  al- 
though the  act  is  a  civil  wrong  (144).  If  the  contract  is  in- 
tended to  defraud  a  third  person,  the  court  will  not  enforce  it 
(145).  The  illegality  may  result  from  the  violation  of  a  statute; 
as  an  agreement  to  settle  an  estate  without  letters  of  administration 
(146)  ;  to  pay  for  the  services  of  one  not  legally  authorized  to 
engage  in  a  certain  business  (147,  148)  ;  a  contract  in  violation  of 
Sunday  laws  (149)  ;  or  of  usury  laws,  by  charging  more  than  the 
legal  rate  of  interest,  which  under  the  statute  results  in  a  for- 
feiture of  all  interest  and  double  the  amount  of  interest  paid 
(150).  Wagers  and  gambling  transactions  are  prohibited  by  law, 
and  all  contracts  based  upon  these  are  void.  These  include  all 
forms  of  betting  on  horse  races,  games  of  chance,  etc.  (151)  ;  in- 
surance contracts  where  the  person  taking  out  the  policy  has  no 
insurable  interest  in  the  subject-matter  of  the  policy   (152)  ;  deal- 


SYNOPSIS.  XXX111 

ing  in  futures,  where  there  is  no  intention  to  deliver  the  articles, 
but  only  to  speculate  upon  the  rise  or  fall  of  prices  (153). 

Agreements  Contrary  to  Public  Policy 

Agreements  contrary  to  public  policy  may  be  such  as  affect  the 
position  and  duties  of  public  officers  (154,  155)  ;  or  in  case  of 
corporations  and  others  owing  a  duty  to  the  public,  contracts 
which  tend  to  interfere  with  the  proper  performance  of  such 
duties  to  the  whole  public  (156)  ;  or  contracts  which  tend  direct- 
ly to  interfere  with  the  existence  or  operation  of  government 
(157),  or  the  proper  conduct  of  elections  (155).  Agreements 
which  tend  to  interfere  with  public  justice,  by  preventing  the 
courts  from  exercising  their  proper  control,  are  void ;  as  in  case  of 
compounding  a  crime,  suppressing  evidence  (158),  exclusive  arbi- 
tration agreements  (159);  and  those  which  tend  to  encourage 
litigation,  as  in  champerty  and  maintenance  (160).  Agreements  of 
immoral  tendency,  as  for  present  or  future  cohabitation,  are  void ; 
but  a  note  given  only  for  past  cohabitation  is  invalid  for  want  of 
consideration,  unless  given  under  seal  (161).  Agreements  which 
place  persons  under  improper  influence  in  the  discharge  of  their 
duties  to  others,  as  in  case  of  agent  to  principal  (162),  officer 
buying  up  county  claims,  or  municipal  councils  contracting  with 
one  of  their  members  (163).  Agreements  which  tend  to  interfere 
with  the  freedom  of  choice  or  the  relation  of  the  parties  in  mar- 
riage are  void ;  as  in  marriage  brocage  contracts,  contracts  in  re- 
straint of  marriage,  or  agreements  for  divorce  (164,  165)  ;  sepa- 
ration agreements  based  upon  immediate  separation  and  fixing  the 
property  rights   of   the  parties   will   be   sustained    (166). 

Contracts  in  Restraint  of  Trade 

Contracts  in  restraint  of  trade  are  invalid,  where  the  restraint 
is  unreasonable  in  extent  of  time  or  space,  or  is  not  necessary  to 
give  the  purchaser  what  he  is  entitled  to  under  the  contract ;  re- 
strictions upon  the  alienation  of  property  are  not  favored  but  are 
recognized  in  certain  cases  of  spendthrift  trusts  and  in  the  sepa- 
rate trusts  for  married  women  (167).  Combinations,  trusts  and 
monopolies  are  against  public  policy,  being  prohibited  in  both 
State  and  Federal  legislation,  and  agreements  with  such  objects 
in  view  will  not  be  enforced ;  but  capital  and  labor  may  unite  for 
mutual  protection,  so  long  as  they  do  not  use  unfair  means  to 
affect  the  business  of  others  (168).  Common  carriers  and  others 
owing  a  duty  to  the  public  may  limit  their  common  law  liability 
by  reasonable  restrictions,  but  they  can  not  by  contract  exempt 
themselves  from  liability  for  negligence.  The  liability  of  the 
master  to  the  servant  for  injury,  in  the  case  of  railroads,  has  been 
extended  by  the  Employers'  Liability  Acts,  and  no  contract  will 
exempt   from  such  liability   (169). 


XXXIV  SYNOPSIS. 

Effect    of   Illegality 

The  effect  of  illegality  is  to  render  the  contract  void.  If  the 
contract  is  divisible  so  that  the  legal  and  illegal  parts  may  be 
separated,  the  legal  part  may  be  enforced,  but  otherwise  when  it 
is  indivisible  (170,  171).  If  there  is  an  illegal  intention  by  one 
party,  the  other  may  enforce  the  contract  provided  he  does  not 
share  in  such  intention ;  and  where  the  connection  between  the  il- 
legal act  and  the  agreement  sought  to  be  enforced  is  not  direct, 
but  remote,  the  latter  will  be  upheld  (172).  If  the  plaintiff  must 
base  his  claim  upon  an  illegal  transaction,  the  maxim  ex  turpi 
causa  applies,  but  not  where  his  claim  is  legal  though  indirectly 
connected  with  an  illegal  act  or  purpose  (173).  If  the  illegal  act 
has  not  been  performed,  a  party  may  recover  what  he  has  parted 
with,  as  when  money  is  in  the  hands  of  a  stakeholder;  before 
the  final  consummation  of  the  illegal  act  there  is  a  place  of  re- 
pentance, and  the  party  may  change  his  mind  (174).  After  the 
illegal  act  is  complete,  the  law  will  not  aid  either  party  to  recover 
what  he  has  lost,  if  the  parties  are  in  pari  delicto;  nor  will  it  lend 
its  aid  to  enforce  an  illegal  agreement.  If  the  parties  are  not  in 
pari  delicto,  as  where  the  law  violated  was  for  the  protection  of 
one  of  the  parties,  or  where  one  party  has  taken  advantage  of  the 
other,  the  injured  party  may  have  relief.  Even  where  the  parties 
are  in  pari  delicto,  the  law  may  lend  its  aid  to  prevent  the  carrying 
out  of  the  illegal  contract,  or  to  prevent  injustice;  as  where  a 
mortgage  is  given  to  secure  an  illegal  contract,  its  foreclosure 
may  be  enjoined,  and  an  agent  will  not  be  allowed  to  retain  the 
goods  of  the  master  gotten  in  an  illegal  transaction  (175,  176 
177).  While  a  void  contract  is  a  nullity  and  can  not  be  the 
basis  of  any  rights  even  in  the  hands  of  an  innocent  person,  an 
illegal  contract  is  not  void  in  that  sense,  but  rather  voidable;  if  it 
is  one  absolutely  prohibited  by  law,  as  in  usury  and  gaming  debts, 
it  is  void  in  the  hands  of  anyone,  but  if  it  is  illegal  merely  be- 
cause it  violates  some  law  or  public  policy,  it  may  be  valid  in  the 
hands  of  an  innocent  purchaser  (178).  In  the  conflict  of  laws, 
lex  loci  controls  the  construction  and  validity ;  but  where  the  con- 
tract violates  the  policy  of  the  forum,  or  the  remedy  alone  is  af- 
fected, the  lex  fori  controls    (p.  455). 

Effect    of    Contract 

The  effect  of  contract  is  determined  by  its  operation  upon  the 
rights  of  third  persons  who  are  not  parties  to  it,  by  ascertaining 
the  terms  of  agreement  and  the  obligations  assumed  by  the  parties 
to  the  contract.  Obligations  can  not  be  imposed  upon  third  per- 
sons without  their  consent,  hence  an  agreement  between  A  and  B 
imposes  no  contract  obligation  upon  C;  or  if  A  pays  to  B  a  debt 
which   C   owes,   A   has   no    right   against   C,   unless   payment   was 


SYNOPSIS.  XXXV 

at  C's  request,  express  or  implied,  or  was  ratified  by  C  (179). 
There  is  an  obligation,  however,  resting  upon  third  persons  not 
to  interfere  in  the  contract  relations  of  others,  but  this  has  been 
held  to  apply  only  to  contracts  for  personal  service  or  to  fraudu- 
lent interference  (180,  181).  Whether  a  right  can  be  conferred 
upon  a  third  person  to  sue  upon  a  contract  to  which  he  is  not  a 
party,  has  been  variously  decided.  At  common  law  an  action 
upon  a  bond  was  brought  in  the  name  of  the  payee,  although 
made  for  the  benefit  of  a  third  person  named  therein  (182)  ;  but 
where  one  person  places  property  in  the  hands  of  another  upon 
a  promise  to  pay  a  third  person,  such  third  person  can  sue  upon 
such  promise  (51,  182).  Most  courts  hold  that  where  A  makes 
a  promise  to  B  to  pay  C,  C  may  sue  A  upon  such  promise,  if 
there  is  an  obligation  existing  between  B  and  C.  In  North  Caro- 
lina it  is  held  that  where  the  promise  of  A  to  B  is  in  the  nature 
of  an  indemnity,  which  may  indirectly  benefit  C,  that  C  can  not 
sue  A  directly  upon  such  promise,  but  may  enforce  it  through  the 
equitable  right  of  subrogation;  so  where  the  mortgagor  conveys 
the  mortgaged  premises  and  the  purchaser  assumes  the  mortgage 
debt.  If  the  promise  is  made  directly  for  the  benefit  of  the  third 
person,  and  he  is  a  party  to  or  directly  interested  in  the  consider- 
ation, he  may  sue  the  promisor  directly  as  the  real  party  in  inter- 
est (183,  184,  185,  186,  187). 

Assignment   of   Contract 

By  assignment  a  person  may  acquire  rights  under  a  contract, 
but  a  party  to  a  contract  can  not  assign  his  liabilities  under  it  to 
a  third  person  so  as  to  bind  the  other  party  without  his  consent 
(188).  A  mere  transfer  of  land  under  a  mortgage  does  not  trans- 
fer the  personal  liability  for  the  debt  (190).  At  common  law  a 
chose  in  action  could  not  be  assigned,  but  such  transfer  was 
recognized  in  equity,  and  the  assignee  could  sue  in  the  name  of 
the  assignor,  or  go  into  equity  to  protect  his  right ;  this  rule  did 
not  apply  in  the  case  of  negotiable  instruments  under  the  law 
merchant;  and  by  statute  now  all  assignable  claims  may  be  en- 
forced in  the  name  of  the  assignee  as  the  real  party  in  interest 
(189-195).  The  test  of  assignability  is  whether  or  not  the  claim 
would  survive  to  or  against  the  personal  representative.  A  con- 
tract to  pay  money  may  be  assigned  by  the  payee,  if  there  is 
nothing  in  the  terms  of  the  contract  preventing  it,  or  its  transfer 
is  not  prohibited  by  law;  but  when  rights  arising  out  of  contract 
are  coupled  with  obligations  to  be  performed  involving  personal 
skill  or  personal  confidence,  so  that  it  must  have  been  intended 
that  the  rights  should  be  exercised  and  the  obligations  performed 
by  the  contractor  alone,  the  contract,  including  both  the  right  and 
obligation,  can  not  be  assigned  without  the  consent  of  the  other 


XXXVI  SYNOPSIS. 

party  to  the  original  contract  (189).  In  the  assignment  generally 
no  particular  form  is  required ;  it  may  be  done  with  or  without 
writing,  and  in  any  form  of  words,  provided  the  intent  be  clear 
to  make  the  transfer,  and  the  assignment  is  complete  by  notice  to 
the  debtor  (196,  197).  A  negotiable  instrument  payable  to  bearer 
in  transferred  by  delivery,  and  if  payable  to  order,  then  by  en- 
dorsement and  delivery  (198).  An  assignment  transfers  to  the 
assignee  only  such  rights  as  the  assignor  had  at  the  time  of  the 
assignment  or  when  notice  was  given ;  while  in  the  proper  trans- 
fer of  a  negotiable  instrument,  before  maturity,  for  value,  and 
without  notice,  the  holder  takes  it  free  from  all  defenses  (199- 
202). 
Assignment  by  Operation  of  Law 

Rights  under  a  contract  may  be  assigned  by  operation  of  law. 
In  a  lease  of  land,  a  condition  or  covenant  as  a  material  part  of 
the  contract,  as  for  renewal,  passes  with  the  lease  upon  assign- 
ment ;  and  in  the  conveyances  of  land  generally  those  covenants 
which  touch  and  concern  the  land  pass  with  it,  while  strictly  per- 
sonal covenants  do  not  (203,  204,  205).  At  common  law  the 
husband,  by  virtue  of  the  marriage,  became  entitled  to  all  the 
personal  property  of  the  wife,  including  the  choses  in  action  which 
he  reduced  to  possession  during  coverture ;  if  he  survived  the 
wife,  he  could  hold  such  property  as  administrator,  and  after 
payment  of  her  debts  retain  it  to  his  own  use ;  under  the  present 
law,  the  wife  controls  her  own  property,  and  only  the  rights  as 
administrator  remain  to  the  husband  (206).  By  the  death  of  the 
parties  all  rights  and  liabilities  under  the  contract  survive  to  or 
against  the  personal  representative,  except  those  contracts  which 
involve  the  performance  of  personal  service  by  the  promisor  alone. 
The  personal  representative  is  the  proper  party  to  sue  and  be 
sued,  except  in  case  of  a  surviving  partner   (207). 

Joint   Obligations 

At  common  law,  joint  obligors  were  all  liable  for  the  debt,  and 
the  action  was  brought  against  all,  if  living,  and  if  any  died,  the 
survivors  only  were  liable ;  in  a  several  obligation,  each  obligor 
was  separately  liable  ;  and  in  a  joint  and  several  obligation,  the  ac- 
tion was  against  one  or  all  but  not  an  intermediate  number. 
Under  the  present  statute  joint  obligations  are  considered  joint 
or  several,  may  be  enforced  against  one  or  more,  and  there  is  no 
survivorship  ;  a  judgment  against  one  is  not  a  discharge  as  to  the 
others,  unless  satisfied  (208,  209).  Joint  obligees  were  all  neces- 
sary parties  to  an  action  to  enforce  the  obligation,  and  there  was 
survivorship;  they  are  now  necessary  parties;  but  there  is  no  sur- 
vivorship except  in  a  partnership  (210).  A  release  or  extension 
of  time  to  one  joint  obligor  may  discharge  the  others,  unless  the 


SYNOPSIS.  XXXVU 

right  against  them  is  reserved.  A  surety  paying  more  than  his 
part  of  the  debt  has  the  right  of  contribution  against  his  co- 
sureties, the  right  of  exoneration  against  the  principal,  and  the 
right  of  subrogation  as  to  any  securities  held  for  the  debt  (211, 
212). 

Interpretation  and  Construction  of  Contracts 

Interpretation  and  construction  of  a  contract  is  ascertaining  the 
terms  and  meaning  of  the  contract  and  giving  legal  effect  to  it. 
What  were  the  terms  of  contract  is  a  question  of  fact  for  the 
jury ;  what  is  the  meaning  and  legal  effect  of  such  terms  is  a 
question  of  law  for  the  judge.  In  oral  contracts  the  evidence  is, 
of  course,  oral,  but  in  written  contracts  such  evidence  is  not 
always  admissible  (213).  Parol  evidence  may  be  used  to  show 
the  execution  of  the  writing  or  the  fact  of  agreement,  if  in  dis- 
pute (214,  215,  216)  ;  if  the  writing  is  not  the  complete  agree- 
ment, parol  evidence  may  be  used  to  show  the  oral  part,  pro- 
vided it  does  not  contradict  the  written  part  (217)  ;  when  the 
writing  is  the  complete  agreement,  parol  evidence  can  not  be  used 
to  vary  or  contradict  it  (218),  but  may  be  used  to  explain  the 
meaning  of  terms  (219),  or  to  explain  a  latent  ambiguity  (220), 
or  to  show  a  custom  or  usage  which  may  enter  into  the  contract 
(221).  The  general  rules  of  construction  are,  that  the  intention 
of  the  parties  must  control ;  this  intention  must  be  ascertained 
from  the  whole  instrument ;  and  in  ascertaining  it  words  will 
be  given  their  ordinary  meaning.  The  attending  circumstances 
may  sometimes  be  used  as  a  key  to  the  meaning,  and  in 
cases  of  doubt,  the  practical  construction  of  the  parties  them- 
selves may  be  used  (222,  223).  Time  will  generally  be  con- 
strued as  of  the  essence  of  a  contract  at  law,  but  not  in 
equity  unless  the  parties  have  made  it  material;  and  if  no  time  is 
mentioned,  a  reasonable  time  will  be  inferred  (55,  224).  Where 
a  definite  sum  is  named  in  a  contract  as  a  forfeiture  for  failure 
to  perform,  it  will  be  construed  as  a  penalty  to  be  discharged 
upon  the  payment  of  the  actual  damage ;  but  if  reasonable  in 
amount  and  the  actual  damage  can  not  be  readily  ascertained,  it 
will  be  considered  as  stipulated  damages  (225). 

Discharge  of  Contract  by  Agreement 

In  the  discharge  of  contract  obligations,  this  may  result  from 
the  agreement  of  the  parties,  as  in  case  of  rescission,  and  when 
thus  ended  no  futher  rights  can  be  asserted  under  it,  unless  re- 
served (83,  226).  There  may  be  a  substitution  of  an  entirely 
new  agreement  by  the  parties,  or  of  new  terms  or  new  parties 
in  the  old  agreement  (227).  The  form  of  discharge  by  agree- 
ment was  formerly  required  to  be  of  equal  dignity  with  the  or- 
iginal contract,  but  is  no  longer  strictly  observed,  and  a  contract 


XXXV111  SYNOPSIS. 

under  seal  or  in  writing  may  be  discharged  by  parol  or  by  matter 
in  pais  (228,  229).  The  parties  may  have  put  into  their  agree- 
ment a  condition  subsequent,  the  performance  or  nonperformance 
of  which  will  discharge  the  liability,  as  a  "futher  insurance" 
clause  in  an  insurance  policy;  or  there  may  be  certain  implied 
terms  in  the  contract,  as  inevitable  accident,  etc.,  which  may  dis- 
charge  (230,  231,  232). 

Discharge  of  Contract  by  Performance 

Contracts  may  be  discharged  by  the  performance  of  the  act  re- 
quired in  the  agreement.  This  may  be  a  complete  performance, 
or  a  substantial  performance,  but  the  latter  will  not  discharge  if 
the  slight  defect  or  omission  was  intentional  (233).  The  con- 
tract may  also  require  performance  to  the  satisfaction  of  the 
other  party  or  of  a  third  person ;  the  parties  have  thus  fixed  a 
standard  which  must  usually  be  complied  with  (234,  235).  Pay- 
ment in  money  or  specific  articles,  if  required  or  accepted,  will 
discharge  the  contract  (236,  237)  ;  but  taking  a  note  for  a  prior 
obligation  may  be  a  discharge  or  only  a  suspension,  according  to 
the  intention  of  the  parties  (238).  If  there  are  several  debts,  the 
debtor  may  direct  the  application  of  the  payment  to  any  of  them 
at  the  time  it  is  made ;  if  he  fails  to  direct  the  application,  the 
creditor  may  apply  it  to  any  of  the  debts ;  and  if  neither  makes 
the  application,  the  law  will  apply  it  to  the  weakest  debt  (239). 
If  the  contract  requires  the  delivery  of  specific  articles,  a  tender 
of  these  at  the  time  and  place  specified  will  discharge  the  obliga- 
tion ;  but  if  for  the  payment  of  money,  a  tender  of  the  amount 
due  will  stop  interest  and  costs,  provided  the  debtor  shows  that 
he  has  been  always  ready,  and  pays  the  money  into  court  in  case 
of  suit  (239,  240). 

Breach  of  Contract,  by  Renunciation 

A  breach  of  contract  may  discharge  one  party  from  his  obliga- 
tion to  perform  and  subject  the  other  party  to  an  action  for  dam- 
ages or  for  other  relief.  The  breach  may  be  by  renunciation  be- 
fore the  time  of  performance  arrives,  anticipatory  breach.  If 
the  contract  is  for  the  sale  of  articles  not  ready  for  delivery,  the 
seller  is  entitled  to  damages  at  the  time  of  breach,  but  he  can  not 
increase  the  damage  by  continuing  the  preparation  of  the  articles 
(241).  If  the  articles  are  ready  for  delivery  the  seller  may  keep 
them  and  sue  for  the  damage,  or  treat  them  as  the  property  of 
the  purchaser  and  sue  for  the  price,  or  resell  them  as  the  property 
of  the  purchaser  and  sue  for  the  difference  (241).  Upon  notice 
of  renunciation,  the  party  may  act  upon  it  at  once  and  be  dis- 
charged, but  if  he  does  not  accept  such  renunciation,  the  contract 
is  still  open  for  both  parties  (242,  243).  If  the  contract  is  for 
personal    service,    the    one   who    is    to    perform    the    service    may 


SYNOPSIS.  XXXIX 

wait  until  the  end  of  the  time  and  sue  for  damages  or  treat 
the  contract  as  broken  and  sue  for  damages  at  once,  as  upon 
constructive  service,  according  to  some  courts,  while  others 
do  not  recognize  the  constructive  service  doctrine  (243,  245,  246). 
The  renunciation  or  abandonment  may  be  during  the  time  of 
performance,  and  if  the  contract  is  entire  the  other  party  is 
discharged  from  any  liability  (244).  If  the  servant  is  dis- 
charged without  cause  during  his  term  he  may  sue  for  the 
services  actually  rendered ;  or  sue  at  end  of  each  period  for  pay- 
ment ;  or  wait  until  the  expiration  of  the  whole  time  and  sue  for 
the  wages,  subject  to  being  diminished  by  what  he  might  have 
earned;  or  he  may  sue  at  once  for  breach  of  contract  and  re- 
cover damages  up  to  the  time  of  bringing  suit,  according  to  one 
view,  up  to  the  time  of  trial  by  another  view,  and  for  the 
whole  time  under  the  constructive  service  view    (243,  245,  246). 

Failure  of  Performance 

The  breach  of  contract  may  be  by  failure  of  performance.  If 
the  contract  is  entire,  the  party  failing  to  perform  can  not  recover 
for  the  service  rendered  (247)  ;  but  if  the  contract  is  divisible,  he 
may  recover  for  the  services  rendered  upon  a  quantum  meruit 
(248).  Whether  a  contract  is  entire  or  divisible  will  depend 
upon  the  terms  and  the  intention  of  the  parties ;  and  in  case  of 
performance  by  installments,  a  failure  in  any  installment  may  be 
a  discharge  or  only  give  a  cause  of  action  for  damages  (249). 
If  the  promises  are  independent,  the  breach  of  one  does  not  dis- 
charge from  performance  of  the  other  (250)  ;  if  they  are  condi- 
tional, they  may  be  concurrent  conditions,  in  which  case  both 
parties  must  show  a  readiness  to  perform  (251)  ;  or  conditions 
precedent  which  must  be  performed  before  the  other  obligation 
arises  (252).  In  contracts  for  the  sale  of  goods,  etc.,  the  quality 
may  be  a  condition  which  will  be  ground  for  rescission,  or  a 
warranty  as  a  cause  of  action  for  damages.  Whether  or  not  there 
is  a  warranty  depends  upon  the  intention  of  the  parties,  and  the 
distinction  between  a  condition  and  a  warranty  is  not  always  ob- 
served. For  breach  of  condition  or  warranty,  the  purchaser  may 
keep  the  property  and  sue  for  damages ;  or  return  the  property, 
or  notify  the  seller  that  he  holds  it  subject  to  his  order,  and  if  he 
fail  to  take  the  property,  the  purchaser  may  sell  it  for  the  seller; 
or  the  purchaser  may  set  up  the  breach  as  a  defense  in  an  action 
for  the  price.  Where  there  is  an  express  warranty,  and  it  is 
provided  that  the  article  shall  be  returned  if  not  as  warranted, 
the  buyer  must  comply  by  returning  the  article  or  lose  the  benefit 
of  the  warranty  (253-257). 


xl  SYNOPSIS. 

Failure  of  Consideration 

A  failure  of  consideration  may  operate  as  a  discharge,  if  it  is 
a  total  failure,  while  a  partial  failure  only  gives  a  cause  of  action 
for  damages  or  counterclaim  (258).  In  alternative  contracts  the 
promisor  has  the  option  up  to  the  time  for  performance,  and 
after  that  it  is  with  the  promisee  (259).  If  performance  is  im- 
possible at  the  time  the  contract  is  made  or  becomes  impossible 
by  the  act  of  the  other  party,  it  will  discharge ;  but  subsequent 
impossibility  does  not  generally  excuse  a  breach,  except  where  the 
law  imposes  the  obligation,  or  the  parties  contemplate  the  con- 
tinued existence  or  ability  of  the  person,  or  the  continued  exis- 
tence of  the  subject-matter  (86,  246,  260-263). 

Discharge  by  Operation  of  Law 

A  discharge  may  result  by  operation  of  law,  as  where  a  lower 
form  of  contract  is  merged  into  a  higher  (264)  ;  or  where  there 
has  been  an  intentional  alteration  of  an  instrument  in  a  material 
part  by  one  of  the  parties  or  with  his  consent  (265,  266,  267)  ; 
or  where  the  person  under  obligation  has  obtained  his  discharge 
in  a  proceeding  in  bankruptcy  (p.  646). 

Remedies  for  Breach 

Upon  a  breach  of  contract,  the  party  injured  may  bring  an  ac- 
tion at  law  for  damages,  and  recover  such  damages  as  naturally 
result  from  the  breach,  or  what  the  parties  reasonably  contem- 
plated, and  in  case  of  special  circumstances  known  to  the  parties, 
such  damage  as  reasonably  results  from  these  circumstances ;  the 
damages  in  all  cases  must  be  actual  and  not  remote  or  speculative 
(268,  269).  In  a  proper  case,  as  where  the  remedy  at  law  for 
damages  would  be  inadequate,  relief  may  be  had  in  equity  by  a 
decree  for  specific  performance  (270)  ;  or  an  injunction  may  be 
obtained  to  restrain  the  other  party  from  violating  his  contract 
(167,  p.  655).  The  right  of  action  growing  out  of  a  breach  of 
contract  may  also  be  lost  or  discharged  by  a  release  properly 
executed  (271)  ;  by  accord  and  satisfaction  (272)  ;  by  an  arbitra- 
tion and  award  (273)  ;  by  a  judgment  rendered  in  a  court  of  com- 
petent jurisdiction  (274)  ;  or  the  action  may  be  barred  by  the 
statute  of  limitations,  unless  it  has  been  kept  alive  or  revived  by 
a  payment,  a  new  promise  in  writing,  or  the  party  is  estopped  by 
a  promise  not  to  plead  the  statute    (275). 


Cases  on  the  Law  of  Contracts. 


I.  Formation  of  Contract. 


CHAPTER  I. 

Agreement. 

Sec.  1.  Definition  of  contract. 

(1)   JUSTICE  v.   LANG, 
42  N.  Y.,  493,  1  A.  R.,  576—1870. 

The  plaintiff  brought  this  action  for  the  recovery  of  damages 
from  the  defendants  for  the  nonperformance  of  their  promise, 
contained  in  the  following  memorandum  or  instrument  in  writing, 
signed  by  them,  viz. : 

We  agree  to  deliver  P.  S.  Justice  one  thousand  Enfield  pattern 
rifles,  with  bayonets,  no  other  extras,  in  New  York,  at  $18  each, 
cash  upon  delivery.  Said  rifles  to  be  shipped  from  Liverpool  not 
later  than   1,  July,  and  before,  if  possible. 

W.  Bailey  Lang  &  Co. 

After  proof  of  the  negotiation  of  the  parties,  the  execution  of 
the  instrument  by  the  defendants,  its  acceptance  by  the  plaintiff, 
and  other  evidence  to  sustain  his  action,  but  without  showing  that 
a  counterpart  of  the  memorandum,  or  any  instrument  in  writing 
whatever,  was  signed  by  him  to  accept  the  rifles  or  pay  for  them, 
he  rested  his  case.  Upon  motion  of  defendant's  counsel,  the  judge 
dismissed  the  complaint  on  the  ground  that  it  was  a  nudum  pac- 
tum. "It  expresses  no  consideration,  and  there  is  no  evidence 
tending  to  show  that  the  proposed  purchaser  ever  agreed  to  take 
the  rifles  and  pay  for  them."     Plaintiff  appealed. 

Lott,  J.  The  ground  assigned  by  the  learned  judge  for  the  dis- 
missal of  the  action  renders  it  necessary  to  examine  into  the  valid- 
ity of  the  contract  at  common  law.  Blackstone  in  his  commen- 
taries, defines  a  contract  to  be  "an  agreement  upon  sufficient  con- 
sideration to  do,  or  not  to  do,  a  particular  thing;"  and  he  says  the 
price,  or  motive  of  the  contract,  we  call  the  consideration.  Kent's 
definition  of  an  executory  contract  is,  an  agreement  of  two  or 
more  persons,  upon  sufficient  consideration,  to  do  or  not  to  do  a 

1 


2  FORMATION    OF    CONTRACT. 

particular  thing.  2  Kent  Com.,  449.  Comyn  in  his  work  on  con- 
tracts says :  A  simple  contract,  or  contract  by  parol,  is  defined  in 
our  law  books  to  be  a  "bargain  or  agreement  voluntarily  made 
upon  good  consideration,  between  two  or  more  persons  capable  of 
contracting,  to  do,  or  forbear  to  do,  some  lawful  act."  And  "six 
things  appear  necessary  to  concur:  1.  A  person  able  to  contract. 
2.  A  person  able  to  be  contracted  with.  3.  A  thing  to  be  con- 
tracted for.  4.  A  good  and  sufficient  consideration,  or  quid  pro 
quo.  5.  Clear  and  explicit  words  to  express  the  contract  or  agree- 
ment. 6.  The  assent  of  both  the  contracting  parties."  He  adds : 
"So,  every  contract  should  be  obligatory  on  both  the  contracting 
parties,  or  both  should  be  at  liberty  to  recede  therefrom;  but  to 
an  agreement  or  contract  there  is  no  prescribed  form  of  words, 
but  any  words  which  show  the  assent  of  the  parties  is  sufficient." 
He  also  in  this  connection  states  that  a  voluntary  promise,  with- 
out any  other  consideration  than  mere  good  will,  or  natural  affec- 
tion, to  give  to  another  a  sum  of  money,  as  for  instance  twenty 
pounds,  and  that  he  will  be  a  debtor  for  such  sum,  is  no  contract, 
but  a  mere  nudum  pactum,  and  that  the  law  will  not  compel  the 
execution  by  a  person  of  what  he  had  no  visible  inducement  to 
engage  for,  but  any  degree  of  reciprocity  will  prevent  the  agree- 
ment or  promise  from  being  classed  under  this  rule ;  and  he  illus- 
trates the  distinction  by  saying  that  in  the  case  put,  if  anything 
however  trifling  were  done  or  to  be  done  or  given  for  the  twenty 
pounds,  it  would  be  a  valid  contract  and  binding  upon  the  parties. 
Chitty  says :  "A  contract  or  agreement,  not  under  seal,  may  be 
thus  defined  or  described :  A  mutual  assent  of  two  or  more  par- 
ties competent  to  contract,  founded  on  a  sufficient  and  legal  mo- 
tive, inducement  or  consideration,  to  perform  some  legal  act,  or  to 
omit  to  do  anything,  the  performance  of  which  is  not  enjoined  by 
law."     Cont.,  3. 

All  of  these  definitions  are  substantially  the  same ;  and  upon  the 
application  of  that  given  by  Comyn,  which  embraces  the  others, 
and  appears  to  me  to  be  a  precise  and  explicit  exposition  of  the 
necessary  ingredients  of  a  contract,  to  the  memorandum  in  ques- 
tion, with  his  illustrations,  it  will  be  seen  that  it  constitutes  a  suf- 
ficient and  perfect  agreement.  It  shows  that  the  plaintiff  and  the 
defendants  were  the  contracting  parties,  the  first  as  seller,  and  the 
last  as  purchaser ;  that  the  thing  contracted  for  was  Enfield  rifles ; 
that  a  good  and  sufficient  consideration,  or  quid  pro  quo,  was  ex- 
pressed, being  the  delivery  of  such  rifles  to  the  defendants  at  New 
York  on  the  payment  by  them  to  the  plaintiff  of  eighteen  dollars 
each,  cash  upon  delivery.  Clear  and  explicit  words  were  used  to 
express  the  terms  of  the  contract  and  agreement,  leaving  no  doubt 
as  to  the  subject-matter  thereof,  the  time  and  place   for  the  de- 


AGREEMENT.  3 

livery  of  the  goods  to  be  delivered,  the  price  or  sum  to  be  paid, 
and  when  such  payment  was  to  be  made ;  and  the  assent  of  both 
the  contracting  parties  also  appears,  that  of  the  sellers  by  subscrib- 
ing their  firm  name  at  the  end  of  the  contract,  and  that  of  the 
buyer  by  the  acceptance  thereof.  Although  there  is  no  distinct 
and  express  promise  in  terms  by  the  plaintiff  to  pay  the  price 
specified,  the  terms,  "cash  on  delivery,"  imply  a  promise,  and  cre- 
ate an  obligation  to  make  such  payment  when  the  rifles  are  deliv- 
ered. I  shall  assume,  therefore,  that  the  contract  was  valid  and 
binding  on  the  defendants  at  common  law.  (The  court  then  dis- 
cussed the  contract  with  reference  to  the  statute  of  frauds.)  The 
judgment  below  is  reversed  and  a  new  trial  ordered. 

Sec.  2.    Two  or  more  parties. 

(2)   BURDITT,  ADMR.,  v.  COLBURN,  ADMR., 

63  Vt,  231,  22  Atl.,  572,  13  L.  R.  A.,  676—1891. 

Meacham  was  administrator  of  Gorham,  and  became  largely  in- 
debted to  the  estate  for  money  which  had  come  into  his  hands 
and  which  he  had  converted  to  his  own  use.  For  the  purpose  of 
securing  the  estate,  he  executed  a  promissory  note  for  $1,500,  pay- 
able to  himself  as  administrator  on  demand,  and  executed  a  mort- 
gage on  his  property  to  secure  this.  He  died  without  settling  the 
estate,  being  indebted  to  the  estate  about  $7,000,  and  to  others 
about  $9,000,  and  having  assets  about  $4,000.  After  Meacham's 
death  Colburn  administered  on  his  estate,  and  Burditt  was  ap- 
pointed administrator  of  Gorham's  estate.  Colburn  found  the 
note  and  mortgage  among  Meacham's  papers  and  gave  them  to 
Burditt,  who  had  the  mortgage  registered  and  filed  a  bill  for  fore- 
closure.    The  bill  was  dismissed,  and  Burditt  appealed. 

Affirmed. 

TylER,  J.  The  mortgage  must  be  held  invalid  for  want  of  con- 
tracting parties.  A  contract  necessarily  implies  a  concurrence  of 
intention  in  two  parties,  one  of  whom  promises  something  to  the 
other,  who  on  his  part  accepts  such  promise.  One  person  can  not 
by  his  promise  confer  a  right  against  himself  until  the  person  to 
whom  the  promise  was  made  has  accepted  the  same.  Until  the 
concurrence  of  the  two  minds,  there  is  no  contract ;  there  is  merely 
an  offer  which  the  promisor  may  at  any  time  retract.  Chitty 
Cont.,  9,  Pothier.  It  is  essential  to  the  validity  of  a  deed  that 
there  be  proper  parties, — a  person  able  to  contract,  and  a  person 
able  to  be  contracted  with.     3  Wash.  Real  Prop.,  217. 

To  uphold  this  mortgage,  we  must  say  that  there  may  be  two 
distinct  persons  in  one ;  for  in  law  the  mortgagor  and  mortgagee 


4  FORMATION    OF    CONTRACT. 

are  identical.  The  addition  of  the  words  "admr.  of  Gorham's  es- 
tate" does  not  change  the  legal  effect  of  the  grant,  which  is  to 
Meacham  in  his  individual  capacity.  In  3  Wash.  Real  Prop.,  279, 
it  is  said  that  a  grant  to  A,  B  and  C,  trustees  of  a  society  named, 
their  heirs,  etc.,  is  a  grant  to  them  individually ;  and  Austin  v. 
Shaw,  10  Allen,  552 ;  Towar  v.  Hale,  46  Barb.,  361 ;  Brown  v. 
Combs,  29  N.  J.  L.,  36,  are  cited.  In  this  case  the  grant  and  the 
habendum  are  not  to  the  estate  and  its  legal  representatives,  but 
to  Meacham,  executor,  his  heirs  and  assigns.  Meacham  had  mis- 
appropriated the  funds  of  the  estate,  and  no  one  but  himself  as- 
sented to  his  giving  a  note  and  mortgage  for  the  purpose  of  par- 
tially covering  his  default.  (The  court  then  discussed  the  question 
of  delivery,  and  held  that  there  had  been  no  valid  delivery.) 

Decree  affirmed. 

(3)  BANK  v.  GRIFFIN, 

107   N.  C,   173,   11    S.   E..   1049,  22  A.   S.   R.,  868—1890. 

This  was  a  civil  action  in  which  a  jury  trial  was  waived  and  the 
Judge  found  the  following  facts :  "W.  J.  Griffin  and  W.  O.  Temple 
were  partners  under  the  firm  name  of  Griffin  &  Temple.  On 
March  23,  1889,  they,  as  individuals,  and  the  other  defendants, 
W.  S.  Temple  and  J.  R.  Etheridge,  executed  a  promissory  note 
as  follows:  'Sixty  days  after  date  we,  jointly  and  severally, 
promise  to  pay  to  Griffin  &  Temple,  negotiable  and  payable  with- 
out offset,  at  the  Norfolk  National  Bank,  four  hundred  dollars, 
for  value  received,  etc'  Etheridge  and  W.  S.  Temple  received 
no  benefit,  but  signed  the  note  for  the  accommodation  of  Griffin  & 
Temple,  to  enable  them  to  get  the  money.  The  note  was  endorsed 
to  plaintiff  by  Griffin  &  Temple  for  value  and  with  notice  of  the 
facts.     The  note  has  not  been  paid." 

Upon  these  facts  the  court  rendered  judgment  for  the  plaintiff, 
and  the  defendants,  Etheridge  and  W.  S.  Temple,  appealed. 

Clark,  J.  A  bond  made  payable  to  the  obligor  is  void.  Pear- 
son v.  Nesbit,  12  N.  C,  315;  Justices  v.  Shannonhouse,  13  N.  C, 
6;  Justices  v.  Armstrong,  14  N.  C,  285.  A  bond  is  a  deed,  and 
no  man  can  execute  and  deliver  a  deed  to  himself. 

"According  to  common  law  principles,  a  promissory  note  made 
payable  by  a  person  to  himself  creates  of  itself  no  liability  to  pay 
it.  This  is  so,  not  for  the  reason  that  it  is  contrary  to  public 
policy,  immoral  or  illegal,  but  because  a  person  can  not  contract 
with'  himself."  Jenkins  v.  Bass  (Ky.),  11  S.  W.  Re]).,  293. 
Indeed  there  is  no  contract  till  such  paper  has  been  endorsed  over 
to  another,  when  there  springs  up  by  the  law  merchant  a  valid 
contract  between  the  maker  and  the  endorsee.      I   Daniel  Neg.   In- 


AGREEMENT. 


struments,  sec.  130;  Wood  v.  Maytton,  10  Adol.  &  E.,  809  (59 
E.  C.  L.)  ;  Smith  v.  Lusher,  5  Cowen,  688;  Plets  v.  Johnson,  3 
Hill  (N.  Y.),  112. 

In  this  case,  the  note,  upon  its  face,  was  executed  for  the  pur- 
pose of  being  negotiated.  It  is  found,  as  a  fact,  that  the  defend- 
ants signed  it  as  an  accommodation  paper  to  enable  those  of  the 
makers  who  are  named  as  payees  therein  to  raise  money  on  the 
paper.  Doubtless  they  were  so  named  as  payees  because  it  was 
not  yet  known  who  would  lend  money  on  the  note,  and  it  was 
desired  not  to  leave  the  names  of  payees  in  blank.  Such  practice 
is  not  unusual,  and  is  well  recognized  by  the  law  merchant. 

The  note  was  negotiated,  as  defendants  intended  should  be 
done,  and  value  received  thereon.  To  protect  them,  upon  the 
technical  grounds  set  up,  against  the  consequences  of  their  own 
act,  would  be  against  good  morals,  and  would  enable  them  to 
perpetrate  a  fraud  on  the  plaintiff.  By  the  endorsement  to  plain- 
tiff, the  contract,  till  then  imperfect,  became  perfect  and  com- 
pleted. No  error. 

Smalley  v.  Wright.  44  Me.,  442,  69  A.  D.,  112;  Thayer  v.  Buffum,  11 
Mete.,  398;  Allen  v.  Shadbourn,  1   Dana   (Ky.),  68,  25  A.  D.,   121. 

One  of  the  justices  of  a  county  could  not  enter  into  a  contract  with 
his  associate  justices  in  their  official  capacity.  Justices  v.  Simmons, 
48—187;  13—6,  and  14 — 284;  Justices  v.  Bonner,  14 — 289;  Justices  v. 
Dozier,  14 — 287;  Dickey  v.  Allen,  15 — 43;  Davis  v.  Somerville,  15 — 382; 
Vanhook  v.  Barnett,  15—268. 

A  person  can  not  be  plaintiff  and  defendant  in  the  same  action,  be- 
cause he  can  not  enforce  an  obligation  against  himself.  Pearson  v. 
Nesbit,  12 — 315  (confessed  judgment  set  aside);  Newsom  v.  Newsom, 
26—381;  Sanders  v.  Bean,  44 — 318  (surety  on  official  bond  could  not 
as  relator  sue  his  cosureties  on  the  bond);  Smith  v.  Bryson,  62 — 267; 
Medlin  v.  Simpson,  144—397;  Terry  v.  Brightman,  132  Mass.,  318.  One 
partner  can  not  sue  the  other  on  an  obligation  to  the  firm,  but  he  may 
sue  on  an  individual  contract  as  to  the  terms  of  partnership.  Ledford 
v.  Emerson,  140—288;  Owen  v.  Murray,  136—475;  Newby  v.  Harrell, 
99 — 149;  Rogers  v.  Rogers,  40 — 31.  A  trustee  or  agent  can  not  contract 
with  himself.  Boyd  v.  Hawkins,  37—304;  Pegram  v.  R.  R.,  84—702; 
Taussig  v.   Hart,  58  N.  Y.,  425. 

"It  takes  two  to  make  a  bargain"  is  a  maxim  of  law,  the  soundness  of 
which  strikes  the  good  sense  of  everyone,  so  that  it  has  become  a 
"common  saying."  Pearson,  J.,  in  Spruill  v.  Trader,  50 — 39.  But  the 
donee  of  a  power  may  execute  a  deed  in  that  capacity  to  himself. 
Jones  v.  Pullen,  115 — 475;  Gorrell  v.  Alspaugh,  120—365;  Mordecai's 
Lectures,  p.  716;  Whitehead  v.  Hellen,  76—99;  Owens  v.  Browning 
Mfg.  Co.  (N.  C).  84  S.  E.  389. 

On  the  subject  generally,  see  7  Am.  &  Eng.  Encyc,  99;  9  Cyc,  371; 
Bishop  on  Contracts,  sees.  250-254;  Clark  on  Contracts,  pp.  3,  5;  6  R. 
C.  L.,  592. 


FORMATION    OF    CONTRACT. 


Sec.  3.     Common  intention. 


(4)  MACHINE  COMPANY  v.  CHALKLEY, 
143  N.  C,  181,  55  S.  E.,  524—1906. 

This  action  was  brought  by  Charles  Holmes  Machine  Company 
against  D.  B.  and  M.  H.  Chalkley,  trading  as  Stanton  Tanning 
Company,  to  recover,  among  other  things,  a  Sawyer  measuring 
machine,  or  its  value,  $250,  and  $100  for  its  detention,  etc. 

The  plaintiff  advertised  for  sale  a  Sawyer  measuring  machine, 
and  the  defendant,  referring  to  the  advertisement,  inquired  by 
letter  for  the  price  of  the  machine,  describing  it  as  a  Sawyer 
whole-hide  measuring  machine.  In  the  correspondence  which  fol- 
lowed the  plaintiff  agreed  to  sell  a  Sawyer  measuring  machine,  as 
it  is  described  in  the  advertisement,  at  $250,  and  the  defendant  to 
buy  a  whole-hide  measuring  machine  at  that  price.  The  defendant 
received  the  machine  and  sold  it  for  $250,  and  sets  up  a  counter- 
claim for  $600,  the  difference  between  this  machine  and  a  whole- 
hide  measuring  machine,  which  he  alleges  he  bought. 

There  was  a  verdict  and  judgment  for  plaintiff,  and  defendant 
appealed. 

Wal,kfr,  J.     The  first  and  most  essential  element  of  an  agree- 
ment is  the  consent  of  the  parties,  an  aggregatio  mentium,  or  meet- 
ing of   two  minds  in  one  and  the  same  intention,   and  until   the 
moment  arrives  when  the  minds  of  the  parties  are  thus  drawn  to- 
gether, the  contract  is  not  complete,  so  as  to  be  legally  enforceable. 
Wald's  Pollock  on  Cont.   (3  Ed.),  p.  3.     It  is  necessary  that  the 
parties  should  be  assured  by  mutual  communication  or  negotiation 
that  a  common  intention  exists  and  that  they  mean  the  same  thing 
in  the  same  sense.     Ibid.  (1  Ed.,  1881),  p.  5.     It  must  be  remem- 
bered, though,  that  this  common  intention  is  a   fact,  or  inference 
of  fact,  which,  like  any  other  fact,  has  to  be  proved  according  to 
the  general  rules  of  evidence.     Ibid.   (3  Ed.),  p.  4.     Nor  is  the 
contract    to    be    ascertained    by    what    either    one    of    the    parties 
thought  it  was,  but  by  what  both  agreed  it  should  be.     Prince  v. 
McRae,  84  N.  C,  674.     The  law  proceeds  not  upon  the  under- 
standing of  one  of  the  parties,  but  upon  the  agreement  of  both. 
Lumber  Co.  v.  Lumber  Co.,  137  N.  C,  436,  where  the  authorities 
are  collected.     Subject  to  this  rule,  if  the  treaty  of  the  parties  is 
based  upon  a  material  mistake  of  fact  of  such  character  that  there 
is  no  mutual  assent  to  one  and  the  same  thing,  then  no  contract 
comes  into  existence,  as,  in  contemplation  of  law,  there  has  been  a 
failure  to  agree.     Tiffany  on  Sales,  p.   108. 

In  this  case  the  difference  between  the  parties  is  as  to  the  sub- 


AGREEMENT.  / 

ject-matter  of  their  contract  or  as  to  what  was  sold  by  one  and 
bought  by  the  other.  "It  is  essential  to  the  validity  of  a  contract 
that  the  parties  should  have  consented  to  the  same  subject-matter 
in  the  same  sense.  They  must  have  contracted  ad  idem.  Utley  v. 
Donaldson,  94  U.  S.,  29.  It  has  also  been  said  that  "as  mutual 
assent  is  necessary  to  the  formation  of  the  contract,  it  follows  that 
an  error  or  mistake  of  fact  in  that  which  goes  to  the  essence  of  the 
agreement,  and  therefore  excludes  such  assent,  prevents  the  for- 
mation of  the  contract,  since  each  party  is  really  assenting  to 
something  different,  notwithstanding  the  apparent  mutual  assent." 
24  Am.  &  Eng.  Enc.  (2  Ed.),  p.  1034.  And  this  doctrine,  of 
course,  applies  to  a  mistake  of  the  parties  as  to  the  subject-matter, 
as  is  there  stated.  In  a  case  much  like  this  one  it  was  held  that 
the  contract  must  be  one  on  the  one  side  to  sell,  and  on  the  other 
side  to  accept  one  and  the  same  thing.  Thornton  v.  Kempster,  5 
Taunton,  786  (1  E.  C.  L.,  265).  Where  there  is  a  mistake  as  to 
the  subject-matter  of  the  sale,  it  affects  the  substance  of  the  con- 
tract by  eliminating  its  essential  element,  the  mutual  assent  of  the 
parties,  upon  the  principle  embodied  in  the  maxim  of  the  civil  law, 
"Cum  in  corpore  dissentitur,  apparet  nullam  esse  acceptionem." 
Gardner  v.  Lane,  94  Mass.,  39.  So  in  the  case  of  Kyle  v.  Kava- 
nagh,  103  Mass.,  356,  the  court  uses  language  peculiarly  applicable 
to  the  facts  of  this  case:  "If  the  defendant  was  negotiating  for 
one  thing  and  the  plaintiff  was  selling  another  thing,  and  their 
minds  did  not  agree  as  to  the  subject-matter  of  the  sale,  there 
would  be  no  contract  by  which  the  defendant  would  be  bound, 
though  there  was  no  fraud  on  the  part  of  the  plaintiff.  This  rule 
is  in  accordance  with  the  elementary  principles  of  the  law  of  con- 
tract." The  following*  cases  are  also  in  point :  Wheat  v.  Cross, 
31  Md.,  99;  Sherwood  v.  Walker,  66  Mich.,  568;  Cutts  v.  Guild, 
57  N.  Y.,  229;  Calkins  v.  Griswold,  11  Hun  (N.  Y.),  208;  Shel- 
don v.  Capron,  3  R.  I.,  171  ;  Ketchum  v.  Catlin,  21  Vt.,  191  ;  Spurr 
v.  Benedict,  99  Mass.,  463. 

Let  us  now  apply  the  principles  thus  established  to  the  facts  of 
this  case.  The  correspondence  plainly  shows,  as  His  Honor  held, 
that  the  parties  were  mutually  mistaken  as  to  what  was  being  sold. 
The  plaintiff  advertised  for  sale  the  very  machine  which  was 
shipped  to  the  defendant,  it  being  the  one  and  the  only  one  it  pro- 
posed to  sell  at  $250.  The  defendant  accepted  the  proposal,  but 
not  according  to  the  terms  in  which  it  was  made.  The  plaintiff 
proposed  to  sell  one  thing  and  the  defendant  to  buy  another  and 
quite  different  thing.  There  is  no  other  construction  to  be  placed 
upon  the  correspondence  between  the  parties.  There  was  a  mu- 
tual mistake  as  to  an  essential  matter,  and  the  minds  of  the  parties 
have  therefore  not  met  in  one  and  the  same  intention.     There  is 


8  FORMATION    OF    CONTRACT. 

no  fraud  alleged  in  this  case,  but  nevertheless  it  results  that  there 
was  no  contract.  The  defendant,  though,  has  received  and  con- 
verted to  his  own  use  the  machine  shipped  to  him,  and  as  it  was 
not  his  property,  but  belonged  to  the  plaintiff,  he  is  liable  for  its 
value,  which  is  admitted  to  be  $250,  that  being  the  amount  realized 
from  the  sale  of  it  by  him.  Tiffany  on  Sales,  pp.  108,  109.  In 
this  view  of  the  case  the  counterclaim,  as  a  matter  of  course, 
must  fail. 

It  does  not  appear  that  there  is  any  machine  known  in  the 
trade  as  a  "whole-hide  measuring  machine,"  though  there  may  be 
one  of  that  kind.  Assuming  that  there  is,  the  defendant  says  in 
his  counterclaim  that  it  is  worth  $900,  and  seeks  to  recover  the 
difference  in  the  price  of  the  two  machines.  The  defendant  was 
conducting  a  tannery  at  Stanton,  N.  C,  and  intended  to  use  the 
machine  in  his  business  and  may  be  presumed  to  have  had  knowl- 
edge of  the  value  of  such  machines.  It  seems  that  he  expected  to 
buy  a  machine  worth  $900  at  the  much  reduced  price  of  $250. 
The  great  disparity  between  the  real  value  of  the  machine  which 
the  defendant  thought  he  was  buying  and  the  price  at  which  the 
plaintiff's  machine  was  advertised  for  sale,  it  would  seem,  was  suf- 
ficient to  excite  his  inquiry  as  to  whether  he  and  the  plaintiff 
really  understood  each  other,  if  not  to  induce  the  belief  that  there 
was  a  mistake.  But  however  this  may  be,  they  did  not  agree,  and 
there  was  no  sale  by  which  the  defendant  acquired  title  to  some- 
thing he  did  not  get,  but  which,  as  he  alleges,  he  should  have  re- 
ceived. No  error. 

(5)   BRUNHILD  v.  FREEMAN, 

77  N.  C,  128—1877. 

This  was  a  civil  action  in  which  there  was  a  verdict  and  judg- 
ment for  the  plaintiff,  and  an  appeal  by  the  defendant. 

Ri.adk,  J.  The  plaintiff  sold  goods  to  one  Mayer  to  the  amount 
of  S415,  and  took  from  Mayer  as  collateral  security  therefor  eight 
notes  for  $125  each,  which  Mayer  held  upon  the  defendant.  The 
defendant  subsequently  gave  to  the  plaintiff  on  account  of  the 
transaction  four  notes  for  $100  each,  and  this  action  is  upon  one 
of  these  four  new  notes.  And  the  plaintiff  had  a  verdict  and  judg- 
ment. This  is  all  plain  enough,  but  the  defendant  says  that  at 
the  time  when  he  gave  the  plaintiff  the  four  new  notes  it  was 
upon  the  understanding  that  the  eight  old  notes  were  to  be  deliv- 
ered up  to  him  by  the  plaintiff,  and  that  the  plaintiff  refused  to 
deliver  them  up.  And  the  plaintiff  having  refused  to  comply  with 
his  part  of  the  contract  to  deliver  up  the  old  notes,  he,  the  de- 
fendant, was  nut  obliged  to  comply  witli  his  part  of  the  contract 
to  pay  the  new  note1-. 


AGREEMENT.  y 

By  what  sort  of  financial  legerdemain  the  defendant  supposed 
that  he  could  fairly  get  clear  of  the  $1,000,  which  he  owed  Mayer, 
by  giving  his  notes  to  the  plaintiff  for  $400,  he  seems  not  to  have 
made  plain  to  the  court  below,  nor  is  it  plain  to  us.  He  did  get 
credit  upon  the  old  notes  for  the  amount  of  the  new.  And  that 
was  all  he  was  fairly  entitled  to.  Indeed,  he  got  credit  for  $15 
more  than  the  new  notes.  The  justice  of  the  case  is,  therefore, 
administered  by  the  verdict  and  judgment  below,  and  they  must 
be  sustained  unless  some  general  principle  has  been  violated. 

The  testimony  for  the  plaintiff  was  that  he  held  the  eight  notes 
for  $125  each,  upon  the  defendant  only  as  collateral  to  secure  him 
$415  which  Mayer  owed  him,  and  that  he  agreed  with  the  de- 
fendant to  take  his  four  new  notes  for  $100  each  and  enter  a  credit 
of  $415  on  the  old  notes,  informing  the  defendant  that  he  would 
then  have  to  deliver  the  old  notes  to  Mayer,  and  that  this  was 
done.  The  testimony  on  the  part  of  the  defendant  was,  that  it 
was  agreed  between  him  and  the  plaintiff  that  upon  his  giving  the 
four  new  notes,  the  plaintiff  was  to  give  him  up  the  whole  of  the 
old  notes. 

The  defendant  asked  His  Honor  to  charge  that  if  the  new  notes 
were  given  upon  the  agreement  that  all  of  the  old  notes  were  to 
be  surrendered,  and  they  had  not  been  surrendered,  then  the 
plaintiff  was  not  entitled  to  recover.  His  Honor  gave  the  charge 
and  therefore  the  defendant  can  not  complain,  although  it  may  be 
that  the  plaintiff  could  recover,  leaving  the  defendant  to  his  cross- 
action  for  damages,  or  to  his  counterclaim. 

The  defendant  also  asked  His  Honor  to  charge  that  if  there  was 
a  misunderstanding,  one  party  understanding  that  there  was  only  to 
be  a  credit  for  the  $415  upon  the  old  bonds,  and  the  other,  that 
they  were  all  to  be  surrendered,  then  the  plaintiff  could  not  recover. 

His  Honor  could  not  give  this  instruction,  because  it  is  admitted 
on  both  sides  that  there  was  a  contract  of  some  sort,  and  where 
there  is  a  contract,  if  the  parties  can  not  agree  upon  the  meaning 
of  it,  as  is  frequently  the  case,  and  as  in  this  case,  then  it  is  for 
the  jury  or  for  the  court  to  say  what  is  the  meaning. 

The  defendant  chiefly  relied  upon  His  Honor's  refusal  to  give 
the  following  charge :  "That  the  question  was  not  what  the  plain- 
tiff thought,  but  what  the  defendant  thought,  and  if  the  defendant 
did  not  intend  to  assume  the  payment  of  the  $400,  save  upon  the 
delivery  to  him  of  the  eight  notes,  the  plaintiff  could  not  recover." 

His  Honor  very  properly  refused  to  so  charge,  but  did  charge 
that  it  was  not  what  either  thought,  but  what  both  agreed. 

His  Honor  further  charged  that  if  there  was  no  agreement,  then 
the  plaintiff  was  entitled  to  a  verdict.  And  to  this  defendant  ob- 
jects that  His  Honor  charged  that  the  plaintiff  could  recover  with- 


10  FORMATION    OF    CONTRACT. 

out  any  contract  whatever.  But  that  was  not  the  meaning.  The 
note  sued  on  was  the  contract  upon  which  the  plaintiff  was  to  re- 
cover, and  the  defendant  sought  to  defeat  the  action  by  proving 
another  contract,  the  terms  of  which  were  in  doubt.  And  His 
Honor  after  having  explained  what  would  be  the  bearing  of  the 
contract  under  one  hypothesis  and  another,  charged  that  if  there 
was  no  agreement  at  all  outside  of,  or  inconsistent  with,  the  note 
sued  on,  then  the  plaintiff  was  entitled  to  recover. 

There  is  no  error.  Judgment  affirmed. 

The  contract  is  not  what  either  party  thought,  but  what  both 
agreed.  Pendleton  v.  Jones,  82—249.  See  also  Gregory  v.  Bullock, 
120—260;  Prince  v.  McRae,  84—674;  Pegram  v.  R.  R.,  84—696;  Bailey  v. 
Ruties,  86—520;  Hedgepeth  v.  Rose.  95 — 41;  King  v.  Phillips,  94—558; 
Thomas  v.  Shooting  Club,  121—238;  1  Pars.  Cont.  (9  Ed.)    475. 

See  also  Lumber  Co.  v.  Lumber  Co.,  137—432,  436;  Barber-Paschall 
Lumber  Co.  v.  Boushall,  —  N.  C.  — ,  84  S.  E.,  800;  Insurance  Co  v. 
Younff.  23  Wall.,  85;  H.  &  N.  H.  R.  R.  v.  Jackson,  24  Conn.,  514,  63  A.  D., 
177;  Russell  v.  Clough,  71  N.  H.,  177,  51  Atl.,  632,  93  A.  S.  R.,  507;  Woods 
v.  Ayres,  39  Mich.,  345,  33  A.  R.,  396;  6  R.  C.  L.,  599;  Contracts,  Cent. 
Dig.,  sees.  61,  72;  Dec.  Dig.,  sec.  15. 

Executed  and  executory  contracts. — An  executed  contract  is  one  in 
which  both  parties  have  done  all  that  they  are  required  to  do.  This 
conveys  a  chose  in  possession.  An  executory  contract  is  one  in  which 
something  remains  to  be  done  by  one  or  both  parties.  This  conveys  a 
chose  in  action.  2  Blk.,  443;  Mordecai's  Lectures,  971;  Barneycastle  v. 
Walker,  92—200;  1  Page  Cont.,  s.  18.  If  both  have  not  done  what  they 
were  to  do,  it  is  sometimes  called  a  bilateral  contract;  if  only  one  has 
something  yet  to  do,  it  is  called  a  unilateral  contract.  1  Page  Cont.,  s. 
17.  These  terms  are  sometimes  used  of  options,  Alston  v.  Connell,  140 — 
485-  125—329;  or  in  contracts  under  the  Statute  of  Frauds,  Lumber  Co. 
v.  Corey,  140—462.  See  6  R.  C.  L.,  590;  Contracts,  Cent.  Dig.,  sec.  8; 
Dec.  Dig.,  sec.  6. 

An  executed  contract  of  sale  is  one  in  which  the  title  to  property 
passes,  though  there  may  not  be  actual  delivery.  Allman  v.  Davis,  24 — 
12;  Willard  v.  Perkins,  44 — 253;  Long  v.  Spruill,  52—96;  Cohen  y. 
Stewart,  98 — 97.  An  executory  contract  of  sale  is  one  in  which  there  is 
an  agreement,  but  there  is  something  more  to  be  done  before  the  title 
passes.  Waldo  v.  Belcher,  33—609;  Devane  v.  Fewall,  24 — 36;  Wittkow- 
sky  v.  Wasson,  71—451;  Atkinson  v.  Graves,  91—99;  Drill  Co.  v.  Allison, 
94 — 548;  Phifer  v.  Erwin,  100—74,  and  cases  cited;  Blakely  v.  Patrick, 
67^0;  Richardson  v.  Ins.  Co.,  136—314;  Branson  v.  Gales,  7—312; 
State  v.  Wernwag,  116—1062;  Lumber  Co.  v.  Wilcox,  105—34;  Heiser 
v.  Meares,  120—443;  Coles  v.  Lumber  Co..  150—183;  Mordecai's  Lectures, 
973. 

Express  and  implied  contracts. — An  express  contract  is  where  the  par- 
ties have  definitely  fixed  the  terms  of  their  agreement.  An  implied  con- 
tract (in  fact)  is  one  in  which  the  terms  are  gathered  from  the  circum- 
stances and  not  from  a  definite  agreement;  an  implied  contract  (in  law), 
or  quasi  contract,  is  one  in  which  the  law  imposes  the  obligation  without 
regard  to  actual  agreement.     6  R.   C.   L.,  586. 

A  void  contract  is  one  destitute  of  legal  effect,  a  mere  nullity,  not 
binding  upon  either  party,  and  may  be  attacked  by  strangers.  It  may  be 
simply  disregarded,  and  can  not  lie  made  valid  by  ratification.  McNeill 
v.  R.  R.(  135,  p.  683.  A  voidable  contract  is  one  that  may  be  avoided  at 
the  option  of  one  of  the  parties,  as  in  case  of  contracts  by  infants.  An 
unenforceable  contract  is  one  that  can  not  be  enforced  by  reason  of  its 
wanting  the  legal  requirements  as  to  form,  etc.  Clark  Cont.,  10;  1  Page 
Cont.,  s.  20;  6  R.  C.  L.  591. 


EXPRESS    AND    IMPLIED    CONTRACTS.  11 


CHAPTER  II. 

Manner  of  Agreement. 

Sec.  1.     Express  contract. 

(6)   CRAWFORD  v.  GEISER  MANUFACTURING  CO., 

88   N.    C,   554—1883. 

This  was  a  civil  action  brought  for  breach  of  contract  contained 
in  the  following  writing: 

"Waynesboro,  Pa. 

"Geiser  Manufacturing  Co. 

"You  will  please  furnish,  marked  to  me  at  Salisbury,  N.  C,  six 
No.  2  separators  (threshing  machines),  four  of  said  machines  to 
have  horsepowers  and  to  be  changed  to  suit  the  trade,  either  to 
be  on  two  or  four  wheels,  as  seems  best,  and  to  be  shipped  on  or 
before  May  1,  1881,  at  a  discount  of  30  percent  from  the  list 
price  of  The  Geiser  Manufacturing  Co.,  to  be  paid  by  draft  at 
date  of  shipment,  and  any  engines  wanted,  at  a  discount  of  25  per- 
cent from  list,  payable  when  shipped."  (Signed  by  plaintiff  and 
defendant.)  The  plaintiff  offered  to  comply  with  the  contract  by 
paying  cash  for  the  machines,  and  asked  that  they  be  shipped,  and 
the  defendant  refused  to  furnish  them.  The  defendants  admitted 
the  execution  of  the  writing,  but  denied  that  it  was  binding  upon 
them  as  a  contract,  and  alleged  that  it  was  only  a  request  which 
they  could  refuse.  They  also  said  that  they  intended  to  comply 
with  this  request  until  they  made  a  contract  with  another  firm 
for  the  sale  of  the  machines,  and  that  they  could  not  comply  with 
this  request  without  violating  that  contract ;  and  that  they  offered 
to  furnish  the  machines,  if  the  plaintiff  would  sign  a  bond  to  sell 
them  at  a  certain  price.  Several  letters  were  offered  in  evidence, 
which  are  sufficiently  referred  to  in  the  opinion. 

There  was  a  verdict  and  judgment  for  the  plaintiff,  and  the  de- 
fendant appealed. 

Ashe,  J.  The  only  point  presented  by  the  record,  as  raised  in 
the  court  below,  is  the  exception  of  the  defendant  to  His  Honor's 
refusal  to  give  the  instructions  asked,  to  wit,  that  the  paper-writing 
dated  August  28,  1880,  as  the  evidence  of  the  contract,  is  so  de- 
fective and  uncertain  that  it  can  not  be  enforced,  and  as  the  plain- 


12  FORMATION    OF    CONTRACT. 

tiff's  demand  is  based  thereon,  the  plaintiff  can  not  recover  in  this 
action.     The  instruction  was  properly  refused. 

The  contract  is  sufficiently  explicit  to  maintain  the  action.  Any- 
one who  reads  the  paper-writing  would  at  once  understand  its  im- 
port :  that  it  is  an  agreement  on  the  part  of  the  defendant  to  fur- 
nish the  articles  therein  described,  on  or  before  May  1,  1881,  for 
which  the  plaintiff  was  to  pay  the  defendant,  at  date  of  shipment, 
by  his  draft  of  that  date,  the  amount  of  defendant's  published 
prices  for  said  articles,  less  discount  of  30  percent.  There  is  no 
uncertainty  or  ambiguity  about  it.  The  defendant  understood  it. 
There  is  no  allegation  or  even  pretense  in  the  answer  that  there 
was  any  such  indefiniteness  in  the  terms  of  the  writing,  as  that 
insisted  upon  in  the  prayer  for  instructions  and  the  argument  of 
his  counsel  before  this  court. 

One  of  the  defenses  set  up  by  the  answer  was,  that  the  paper- 
writing  was  a  mere  request,  on  the  part  of  the  plaintiff  to  the  de- 
fendant to  furnish  the  machines,  and  was  not  a  contract.  If  not 
a  contract,  why  sign  it?  "A  contract  is  an  agreement  upon  suffi- 
cient consideration  to  do  or  not  to  do  a  particular  thing."  2  Blk., 
440.  The  plaintiff  proposed  to  the  defendant,  in  writing,  to  pay 
it  a  certain  sum  if  it  would  ship  to  plaintiff  a  certain  number  of 
machines,  on  or  before  the  first  of  May,  1881.  The  defendant 
signed  the  writing,  which  is  equivalent  to  saying,  "I  accept  your 
proposition  and  will  ship  the  articles  according  to  your  proposal." 
The  defendant  signed  the  writing  which,  in  the  answer,  is  called  a 
"letter,"  when  it  well  knew  it  was  not  a  letter,  but  was  a  contract, 
written  by  its  secretary  at  its  place  of  business  in  the  State  of 
Pennsylvania.  It  had  recognized  the  writing  as  a  contract  prior 
to  the  action.  As  late  as  April  28,  1881,  in  a  letter  of  that  date, 
the  defendant  wrote:  "We  knew  nothing  of  the  transaction  you 
speak  of,  until  long  after  we  sold  you  the  machines,  or  rather  con- 
tracted with  you  for  them." 

The  only  other  defense  was  the  lame  and  flimsy  excuse  that  it 
had  made  a  contract  with  a  firm  in  Richmond,  \'a.,  to  sell  its 
machines,  and  that  a  compliance  with  the  contract  with  the  plain- 
tiff would  interfere  with  that  arrangement,  and,  therefore,  it  could 
not  comply. 

The  controlling  motive  in  failing  to  perform  its  part  of  the  con- 
tract was  evidently  the  apprehension  that  if  the  machines  were 
delivered,  the  plaintiff  might  undersell  its  Virginia  agent ;  hence 
this  unwillingness  still  to  deliver  the  machines,  unless  the  plaintiff 
would  give  the  defendant  a  bond  not  to  sell  them  for  less  than  the 
factory  prices,  thus  attempting  to  impose  new  conditions  upon  the 
plaintiff,    which    he   thought   unreasonable,   and   set    tip   his   refusal 


EXPRESS    AND    IMPLIED    CONTRACTS.  13 

to  accept  them,  as  matter  of  defense  to  its  liability  to  damages  for 
the  breach  of  its  contract. 

While  we  hold  there  is  no  error  in  the  judgment  of  the  Superior 
Court  in  regard  to  the  liability  of  the  defendant  upon  the  con- 
tract sued  on,  we  are  of  the  opinion  there  was  error  in  the  judge's 
charge  as  to  the  measure  of  damages. 

The  expenses  of  the  plaintiff  in  sending  an  agent  to  the  defend- 
ant, at  Waynesboro,  was  not  such  an  expense  as  necessarily  re- 
sulted from  the  contract. 

The  true  measure  of  damages  in  this  case  is  the  difference  in 
the  contract  price  of  the  machines  and  their  market  value  at  Salis- 
bury on  the  1st  of  May,  1881,  less  the  cost  of  transportation. 

The  verdict  is  not  to  be  disturbed  except  as  to  the  damages,  and 
to  that  end  the  case  is  remanded  that  an  inquiry  may  be  had  as  to 
the  damages,  in  conformity  to  this  opinion.  The  judgment  will, 
therefore,  be  reformed  so  as  to  open  that  issue  only,  and  in  other 
respects  it  is  affirmed.  Burton  v.  R.  R.,  84 — 192;  Lindley  v. 
R.  R.,  88—547. 

Judgment  accordingly. 

Defendant  telegraphed  to  plaintiff:  "Can  offer  you  extra  force  at  $65 
per  month.  Will  want  you  to  ditch  D.  &  N.  road  and  R.  &  G.  Answer 
quick.  Job  will  last  all  the  year."  Plaintiff  accepted  and  went  to 
work  and  was  stopped  at  the  end  of  eleven  days.  This  was  held  to  be  a 
valid  offer  and  acceptance  for  the  year.  King  v.  R.  R.,  140 — 433.  De- 
fendant wrote  to  plaintiff:  "I  beg  to  advise  that  you  have  been  ap- 
pointed general  storekeeper  for  the  system,  to  take  effect  July  15.  Your 
salary  will  be  $1,800  a  year.  You  will  be  in  charge,"  etc.  Plaintiff  ac- 
cepted and  was  paid  $150  a  month  until  January  1.  and  was  then  dis- 
charged. In  a  suit  for  salary  to  Tuly  15,  it  was  held  to  be  a  contract  by 
the  month.  Edwards  v.  R.  R.,  121 — 490.  A  leased  a  store  for  one  year 
and  as  much  longer  as  he  continued  in  business.  He  continued  in  pos- 
session after  the  end  of  the  year.  It  was  held  that  this  did  not  make 
him  a  tenant  from  year  to  year,  but  by  special  terms  only  until  he  quit 
business.  Harty  v.  Harris,  120—408.  See  also  Outland  v.  R.  R.,  134 — 
350;  Currier  v.  Lumber  Co.,  150—694;  Jennette  v.  Hay  &  Groc.  Co.,  158 
— 156.  For  explanation  of  express  and'  implied  contracts,  see  Woods  v. 
Ayres,  39  Mich.,  345,  33  A.  R.,  396;  Col.  H.  V.  &  T.  R.  R.  v.  Gaffney,  65 
Ohio  St.,  104,  61  N.  E.,  152;  6  R.  C.  L.,  586. 

Sec.  2.     Implied  contract  (in  fact). 

1.     Arises  when. 

(7)   PRINCE  v.  McRAE, 

84  N.   C,  674—1881. 

This  was  a  civil  action  commenced  before  a  Justice  of  the  Peace 
and  tried  on  appeal  in  Superior  Court.  From  a  verdict  and  judg- 
ment for  plaintiff  the  defendant  appealed. 


14  FORMATION    OF    CONTRACT. 

Smith,  C.  J.  The  action  is  to  recover  for  professional  services 
rendered  by  the  plaintiff,  a  physician,  to  the  defendant's  intestate, 
which  is  resisted  on  the  ground  that  they  were  intended  to  be  and 
were  gratuitous. 

The  plaintiff  admitted  that  he  had  made  no  entry  of  a  charge 
upon  his  books ;  and  the  defendant  testified  that  at  the  administra- 
tion sale  the  plaintiff  bought  a  horse  and  proposed  to  pay  for  him 
from  his  account,  remarking  that  he  had  not  intended  to  charge 
the  intestate,  but  that  seeing  others  present  their  accounts,  he  con- 
cluded to  present  his  own. 

The  defendant's  counsel  requested  His  Honor  to  instruct  the 
jury  that  if  the  plaintiff  at  the  time  the  services  were  rendered 
did  not  intend  to  make  a  charge  for  them,  he  could  not  recover. 
This  was  refused,  and  the  jury  were  directed  that  if  from  the 
testimony  they  should  find  that  the  intestate  employed  the  plaintiff, 
and  the  services  were  rendered  without  any  express  agreement  to 
pay  a  definite  sum,  the  law  would  imply  a  promise  to  pay  what 
they  were  reasonably  worth. 

The  exceptions  to  the  instruction  refused  and  to  the  instruction 
given  are  for  review  on  the  appeal. 

The  proposed  instruction  proceeds  from  a  misconception  of  the 
nature  and  essential  requisites  of  a  contract  and  was  rightfully 
refused.  A  contract,  express  or  implied,  executed  or  executory, 
results  from  the  concurrence  of  the  minds  of  two  or  more  persons, 
and  its  legal  consequences  are  not  dependent  upon  the  impressions 
or  understandings  of  one  alone  of  the  parties  to  it.  It  is  not 
what  either  thinks,  but  what  both  agree.  Brunhild  v.  Freeman, 
77—128;  Pendleton  v.  Jones,  82—249. 

Whether  the  plaintiff's  services  shall  be  deemed  a  gratuity  or 
constitute  a  claim  for  compensation,  must  be  determined  by  the 
common  understanding  of  both  parties.  If  they  were  intended  to 
be  and  were  accepted  as  a  gift  or  act  of  benevolence,  they  can  not 
at  the  election  of  the  plaintiff  create  a  legal  obligation  to  pay.  But 
their  character  is  not  controlled  by  the  inexpressed  and  revocable 
intentions  of  the  plaintiff,  although  his  purposes  subsequently  as- 
serted may  aid  in  ascertaining  it.  The  matter  was  properly  left 
to  the  jury  and  their  verdict  finds  that  the  intestate  did  employ 
the  plaintiff  and  the  services  were  rendered,  and  they  have  also 
fixed  their  value. 

There  is  no  error  in  the  charge,  but  there  is  error  in  the  judg- 
ment so  far  as  it  allows  interest  from  May  19,  1880.  The  entire 
damages  arc  assessed  in  the  verdict  at  Fall  Term,  1880,  at  ,$200, 
and  interest  is  only  allowable  thereafter.  Thus  corrected  the  judg- 
ment  must   be  affirmed,  and   it   is  SO  ordered. 

\'m  error.  Modified  and  affirmed. 


EXPRESS    AND    IMPLIED    CONTRACTS.  15 

Plaintiff  prepared  certain  leases  for  the  defendant,  not  expecting  to 
charge  for  this  work,  but  expecting  to  get  further  employment  growing 
out  of  these  leases.  The  parties  failed  to  agree  as  to  such  other  employ- 
ment, and  plaintiff  sued  for  the  value  of  the  first  service.  It  was  held 
that  if  he  did  not  intend  to  charge,  and  this  was  known  to  defendant,  he 
could  not  afterwards  change  his  mind  and  recover  for  the  service,  but 
the  implied  promise  arose  in  the  absence  of  such  agreement.  Thomas 
v.  Shooting  Club,  121 — 238. 

If  A  performs  services  for  B,  for  which  a  man  might  reasonably  ex- 
pect to  receive  payment,  and  B  knows  of  such  service  and  accepts  it, 
or  not  knowing  of  its  performance,  accepts  it  afterward  when  he  had 
an  opportunity  to  accept  or  reject,  there  is  an  implied  obligation  to  pay 
what  the  service  is  reasonably  worth,  inferred  as  a  fact  from  the  cir- 
cumstances. Potter  v.  Carpenter,  76  N.  Y.,  157;  Johnson  v.  Kimball, 
172  Mass.,  398,  52  N.  E.,  386;  The  Brabo,  33  Fed.,  884;  Day  v.  Caton  119 
Mass.,  513,  Rem.,  650;  Luner  v.  Traders  Co.,  44  W.  Va.,  175,  28  S.  E.,  730; 
Bartholomew  v.  Jackson,  20  Johns.,  28,  11  A.  D.,  237,  Rem.,  648;  Pollock 
Cont.  (3d  Ed.),  11;  6  R.  C.  L.,  587;  University  v  McNair,  37—605;  Hed- 
rick  v.  Wagoner,  53—360;  Hedgepeth  v.  Rose,  95-41. 

(8)   BAILEY  v.  RUTJES  and  others, 

86  N.  C,  517—1882. 

This  was  a  civil  action  to  enforce  a  mechanic's  lien  for  lumber 
furnished  and  used  in  certain  buildings. 

The  defendants,  Walton  and  Pearson,  were  the  owners  of  "Glen 
Alpine  Springs,"  and  leased  the  same  to  the  defendant,  Rutjes,  for 
five  years.  Rutjes  was  to  make  improvements  on  the  premises  at 
his  own  expense  and  deduct  the  value  from  the  rent.  The  plaintiff 
furnished  lumber  to  Rutjes,  which  was  used  in  making  the  im- 
provements, and  the  other  defendants  knew  that  the  lumber  was  so 
furnished  and  used.  Rutjes  afterwards  surrendered  the  lease  to 
Walton  and  Pearson  before  the  time  expired,  and  failed  to  pay  for 
the  lumber.  The  plaintiff  sued  Walton  and  Pearson,  who  denied 
that  they  were  liable  for  the  lumber  or  had  anything  to  do  with 
the  contract.  There  was  a  verdict  and  judgment  for  plaintiff,  and 
the  defendants  appealed. 

Rufpin,  J.  The  action  is  one  for  goods  sold  and  delivered,  and 
as  said  by  His  Honor,  in  order  to  maintain  it,  the  plaintiff  must 
show  a  contract,  express  or  implied,  on  the  part  of  the  defendants 
to  pay  him  for  the  lumber  furnished.  As  the  case  discloses  no 
facts  going  to  show  the  existence  of  any  express  contract,  at  least 
prior  to  the  date  of  delivery,  we  are  driven  to  conclude  that  the 
verdict  was,  or  may  have  been,  controlled  by  that  part  of  the  in- 
structions which  had  reference  to  the  implied  contract. 

The  defendants  complain  of  this,  and  we  think  justly  so,  because 
it  made  the  case  to  turn,  not  upon  the  agreement  of  the  parties, 
but  upon  the  reasonable  belief  of  one  of  them.  To  constitute  any 
contract,  there  must  be  a  proposal  by  one  party  and  acceptance  by 


16  FORMATION    OF    CONTRACT. 

the  other,  resulting  in  an  obligation  upon  one  or  both ;  or  in  other 
words,  there  must  be  a  promise.     Pollock  on  Contracts,  5. 

The  fact  then  that  the  plaintiff  expected  (however  reasonably) 
the  defendants  to  pay  him  for  the  timber,  could  certainly  not  be 
sufficient  of  itself  to  establish  the  existence  of  a  contract  on  their 
part  to  do  so.  Brunhild  v.  Freeman,  77 — 128;  Taft  v.  Dickinson, 
6  Allen,  553 ;  Pendleton  v.  Jones,  82—249. 

It  must  be  shown  further  that,  in  some  way,  they  assented  to 
be  charged  either  in  terms  or  by  conduct,  from  which  the  law  will 
infer  their  assent. 

It  is  unquestionably  true  that  if  in  the  absence  of  all  express 
understanding  one  stands  by  in  silence  (and  much  more  if  he  ac- 
tively encourages)  and  sees  work  done,  or  material  furnished  for 
work  upon  premises  belonging  to  him,  and  of  which  he  must  nec- 
essarily get  the  benefit,  and  afterwards  he  does  accept  and  enjoy 
it,  a  promise  to  pay  the  value  thereof  may  be  inferred,  and  ordi- 
narily will  be ;  and  the  inference  under  the  circumstances  will  be 
purely  one  of  fact,  viz.,  whether  the  party's  conduct  has  been  such 
that  a  reasonable  man  might  understand  from  it,  that  he  meant  to 
recognize  the  benefit  as  one  conferred  on  himself,  and  to  pay  for 
it.  In  such  a  case  there  can  be  no  difficulty  in  making  such  an 
inference  against  the  party,  since  the  premises  being  his,  the  ben- 
efit of  the  labor  done  or  the  material  furnished  must  necessarily 
result  to  him,  and  withal,  he  had  the  opportunity  and  the  power  to 
countermand  it,  if  he  would. 

But  in  the  case  at  bar,  the  defendants,  if  their  testimony  is  to 
be  believed,  had  leased  the  premises  to  Rutjes  for  five  years,  and 
he  had  undertaken  to  have  the  improvements  made,  which  called 
for  the  use  of  the  lumber  furnished  by  the  plaintiff.  They  were 
therefore  absolutely  without  the  power,  either  to  give  or  withhold 
their  sanction  to  its  delivery  and  use,  and  ought  not  to  be  required 
to  pay  for  it,  unless  they  knew,  or  had  reason  to  believe  that  the 
plaintiff  was  looking  to  them  for  pay  for  his  lumber,  and  allowed 
him  to  deliver  it  under  that  expectation  and  without  objection  on 
their  part.  Day  v.  Cayton,  119  Mass.,  513;  Wells  v.  Banister,  4 
Mass.,  514.  And  it  was  in  its  failure  to  call  the  attention  of  the 
jury  to  this  view  of  the  case  thai  the  error  of  the  charge,  as  we 
conceive,  consists.  The  instruction  given  should  have  been  that  it 
the  defendants  knowing  that  the  plaintiff  expected  them  to  pay  for 
the  lumber  acted  in  such  wise  as  to  create  a  reasonable  belief  on 
his  part  that  they  would  do  so.  and  thereby  induced  him  to  deliver 
it,  then  the  jury  might  infer  a  promise  on  their  pari  to  pay  for  it. 
In  the  presenl  form  of  the  action  the  question  is,  whether  there 
was  a  subsisting  contract  between  the  parties  in  regard  to  the  lum- 


EXPRESS    AND    IMPLIED    CONTRACTS.  17 

ber,  or  not,  and  the  doctrine  of  equitable  estoppel  has  no  applica- 
tion to  the  case. 

If  not  originally  liable  by  reason  of  a  contract  of  some  sort,  the 
defendants  can  not  be  made  so  because  of  their  having  resumed 
possession  of  the  premises  with  its  improvements,  upon  the  sur- 
render of  their  tenant. 

It  is  true  they  thus  derive  some  advantage  from  the  materials 
furnished  by  the  plaintiff,  but  that  can  not  be  avoided,  as  it  is  im- 
possible for  them  to  reject,  or  restore  to  the  plaintiff  that  benefit 
without  a  surrender  of  their  own  property ;  and  this  the  law  does 
not  require  them  to  make.  Pollock  on  Contracts,  29.  Nor  under 
such  circumstances  would  a  promise  to  pay,  made  after  the  lumber 
had  been  furnished  and  used,  be  binding  on  them,  since  it  would 
be  purely  gratuitous  and  as  such  would  make  no  contract. 

For  the  reasons  suggested,  this  court  is  of  the  opinion  that  the 
defendants  are  entitled  to  have  the  cause  tried  by  another  jury; 
and  this  renders  it  unnecessary  that  we  should  consider  other 
points  made  as  to  the  evidence  received  and  its  effect,  as  they  may 
not  again  arise. 

Error.  Venire  de  novo. 

The  defendant  discharged  the  contractor  who  was  to  build  his  house 
and  who  had  employed  the  plaintiff  to  do  the  plumbing.  The  plaintiff, 
with  the  knowledge  and  consent  of  the  defendant,  continued  the  work 
and  finished  the  plumbing.  In  an  action  for  the  value  of  such  work  it 
was  held  that  the"  defendant  was  liable.     Blount  v.  Guthrie,  99—93. 

In  a  suit  by  an  attorney  for  the  value  of  his  services,  the  court  says: 
"If  the  plaintiff  was  employed  by  defendant  as  attorney  to  represent 
him,  and  he  rendered  services  under  such  contract,  he  is  entitled  to  re- 
cover what  the  services  are  reasonably  worth.  Simmons  v.  Davenport, 
140 — 407.  The  plaintiff  alleged  a  special  contract  for  work  at  6V2  per- 
cent, and  also  a  quantum  meruit  for  the  same  amount;  the  defendant  al- 
leged a  special  contract  for  $1,200,  and  that  this  had  been  paid;  the  court 
instructed  the  jury  that  if  they  should  find  there  was  no  special  contract, 
they  should  then  find  what  the  work  was  reasonably  worth  on  the  im- 
plied contract.  Burton  v.  Mfg.  Co.,  132—17.  Plaintiff  furnished  ma- 
terial to  build  a  church  at  the  request  of  M,  one  of  the  trustees;  the 
other  trustees  knew  that  the  material  was  furnished,  but  supposed  that 
M  was  paying  for  it  himself  and  giving  it  to  the  church;  if  M  had  power 
to  make  the  contract,  the  defendants  were  bound  by  the  express  con- 
tract, and  if  he  did  not  have  such  power,  the  defendants  by  receiving 
and  using  the  material  were  bound  by  an  implied  contract.  Tull  v. 
Trustees,  75^24.  See  6  R.  C.  L.,  589;  Contracts,  Cent.  Dig..  §§4-6.  121- 
129;  Dec.  Dig.,  §§4,  27. 


18  FORMATION    OF    CONTRACT. 

2.     As  affected  by  the  relation  of  the  parties. 

(9)   YOUNG  v.  HERMAN, 
97  N.  C,  280,  1  S.  E.,  792—1887. 

This  was  a  civil  action  to  recover  compensation  for  services  ren- 
dered by  the  plaintiff  to  the  defendant's  intestate. 

Plaintiff  was  the  daughter  of  the  intestate  and  lived  with  him 
for  about  twenty  years  after  she  became  of  age.  She  was  never 
married,  and  she  lived  with  her  father  as  a  member  of  the  family. 
Her  mother  died  three  or  four  years  before  her  father,  and  she 
had  the  care  of  him  until  his  death.  His  mind  became  unsound, 
he  was  in  a  feeble  condition,  and  required  much  attention.  There 
was  no  promise  on  the  part  of  her  father  to  pay  her  for  her 
service,  nor  any  facts  to  show  an  implied  promise,  other  than  that 
she  was  of  age  when  she  did  the  service  and  that  the  same  was 
very  burdensome. 

Mfrrimon,  J.  Generally  when  one  person  has  done  labor  or 
rendered  valuable  services  for  another  at  the  latter's  request,  either 
express  or  implied,  the  law  implies  a  promise  on  his  part  to  pay 
the  former  reasonable  compensation  therefor.  Ordinarily,  in  the 
course  of  the  business  relations  of  men,  they  serve  each  other  for 
a  valuable  consideration,  and  hence,  in  the  absence  of  an  express 
promise  to  pay,  in  such  case,  the  person  doing  the  services  on  the 
part  of  him  receiving  the  benefit,  there  arises  a  presumption  of 
such  a  promise. 

But  such  a  promise  is  not  implied  in  all  cases  where  one  person 
does  service  for  another,  although  the  latter  takes,  and  intends  to 
take  and  have,  benefit  from  it. 

This  presumption  of  fact  may  in  some  cases  be  rebutted,  and 
when  rebutted  no  such  promise  is  implied,  and  no  legal  obligation 
to  pay  arises.  Thus  if  the  services  were  rendered  as  a  pure 
gratuity  or  simply  in  discharge  of  a  moral  obligation,  no  such 
promise  would  be  implied  and  no  such  presumption  would  arise. 
And  so  also,  the  relations  of  the  parties  may  be  such  as  to  rebut 
such  a  presumption,  as  in  case  of  parent  and  child.  The  law  of 
nature  imposes  on  the  parent  the  duty  to  love,  cherish,  protect, 
help  and  encourage  his  offspring;  to  afford  his  children  the  bene- 
fits of  family  and  domestic  ties  and  proper  training.  To  this  end 
he  labors  for  his  children. 

He  is  not  prompted  by  motives  of  gain  from  them,  nor  does  he 
expect  or  desire  such  compensation — the  reward  he  wishes  and 
hopes  for  is  priceless  and  noble — it  is,  thai  his  children  shall  fill 
the  just  measure  of  their  being,  and  thus  afford  him  gladness 
and  satisfaction. 


EXPRESS    AND    IMPLIED    CONTRACTS.  19 

And  the  same  law  imposes  on  children  filial  duty,  that  of  love, 
gratitude,  obedience  and  reverence ;  and  they  are  bound  by  the  ties 
of  nature,  to  aid,  by  such  labor  and  services  as  they  can  do,  or 
otherwise  when  need  be,  in  the  support  of  their  parents,  their 
home  and  family.  Indeed,  the  father  is  entitled  to  the  services  of 
his  child  until  he  or  she  shall  arrive  at  the  age  of  twenty-one 
years.  At  that  age  the  child  becomes. emancipated,  that  is,  at  lib- 
erty to  leave  the  father's  home,  be  free  from  parental  control,  and 
to  seek  his  own  fortune  where  and  as  he  will,  but  such  ties  and 
obligations  are  not  then  completely  broken. 

The  child  never  ceases  to  owe  his  parents  honor  and  reverence, 
and  also  help,  support  and  protection,  where  he  or  she  needs  these 
things,  whether  such  wants  be  occasioned  by  misfortune  or  the 
infirmities  of  age.  Such  duties  and  obligations  are  founded  in 
nature,  and  it  is  not  to  be  presumed  that  they  are  abandoned. 
Hence,  if  the  child,  though  of  the  age  mentioned,  shall  continue 
to  live  with  the  father  as  a  member  and  part  of  his  family,  and 
shall  labor,  or  render  services  to  the  father  without  any  agreement 
or  understanding  as  to  pecuniary  compensation  therefor,  the  law 
does  not  raise  the  presumption  of  a  promise  to  pay  for  the  same, 
and  the  child  can  not  maintain  an  action  against  the  father  in 
that  respect. 

In  such  case  the  presumption  is,  that  the  parties  do  not  contem- 
plate or  expect  the  payment  of  wages  on  the  part  of  the  parent, 
or  payment  for  board,  lodging,  apparel  and  the  like  on  the  part  of 
the  son  or  daughter. 

This  is  the  orderly  course  of  the  natural  relation  of  parent  and 
child ;  the  law  favors  and  takes  notice  of  it,  and  does  not  hasten  to 
conclude  that  they  intend  to  treat  each  other  as  debtor  and  cred- 
itor; it  presumes  the  contrary,  but  such  presumption  is  not  conclu- 
sive ;  it  may  be  rebutted  and  the  reverse  of  it  established  by  proof 
of  an  express  or  implied  agreement  to  the  contrary.  Such  im- 
plied agreement  may  appear  from  facts  and  circumstances  which 
show  that  both  parties  at  the  time  the  labor  was  done,  or  the  serv- 
ices were  rendered,  contemplated  and  intended  that  pecuniary  rec- 
ompense should  be  made  for  the  same.  The  mere  fact  that  the 
child  on  attaining  his  majority,  continued  to  labor  for  the  parent 
as  a  member  of  the  family  for  a  long  while,  or  that  he  did  bur- 
densome and  disagreeable  labor,  is  not  sufficient  evidence  of  itself 
to  prove  an  implied  promise  to  pay  wages  for  it,  although  the  ex- 
traordinary character  of  the  labor  might  be  pertinent  evidence  in 
aid  of  other  competent  evidence  to  raise  such  implication.  Such 
implied  promise  may  be  proven  by  pertinent  declarations  of  the 
parties  in  the  presence  of  each  other,  and  facts  and  circumstances 
inconsistent  with  a  purpose  on  the  part  of  the  parent  and  child 


20  FORMATION    OF    CONTRACT. 

that  the  latter  should  lahor  simply  as  a  member  of  the  father's 
family  without  wages  for  his  labor,  such  as  that  the  father  had 
paid  the  child  wages — had  repeatedly  done  so — that  the  father  de- 
clared his  obligation  and  purpose  to  pay  wages,  had  promised  to 
do  so ;  that  the  child  had  said  in  the  presence  of  the  father  that 
he  was  working  for  wages  and  the  father  did  not  dissent ;  that 
the  child  had  taken  a  part  of  the  crop,  sold  the  same  on  his  own 
account  with  the  father's  knowledge  and  consent ;  that  the  child 
had  paid  for  his  own  clothing,  and  the  like  evidence.  Of  course 
such  evidence  would  be  subject  to  proper  explanation,  and  the  op- 
posing party  might  produce  countervailing  evidence. 

This  seems  to  us  to  be  a  correct  and  reasonable  statement  of  the 
rule  of  law  applicable  in  this  and  like  cases,  although  it  must  be 
conceded  that  there  is  some  diversity  of  decision  on  the  subject. 

The  great  weight  of  authority  in  this  and  other  States  is  in  favor 
of  the  rule  as  we  have  stated  it  above.  Its  correctness  is  plainly 
and  approvingly  recognized  by  Chief  Justice  Ruffin,  in  Williams 
v.  Barnes,  14  N.  C,  348;  and  afterwards,  by  Chief  Justice  Pear- 
son, in  Hudson  v.  Lutz,  50  N.  C,  217.  The  case  of  Hauser  v. 
Sain,  74 — 552,  however,  seems  to  be  in  conflict  with  what  is  said 
in  the  cases  cited  above,  although  the  learned  Chief  Justice  who 
delivered  the  opinion  of  the  court  in  that  case,  delivered  that  in 
Hudson  v.  Lutz,  supra.  See  Schouler  on  Dom.  Rek,  269,  and  the 
numerous  cases  there  cited. 

The  court  below  simply  told  the  jury  "That  when  one  person 
renders  services  to  another,  the  law  implies  a  promise  to  pay  for 
the  same  what  they  are  reasonably  worth,  and  that  the  jury,  in 
passing  upon  the  first  issue,  have  the  right  to  consider  that  the 
plaintiff  was  the  daughter  of  the  house,  the  manner  in  which  she 
was  boarded,  provided  for  and  treated,  and  if  they  believe  that 
such  board,  treatment  and  provision  was  what  her  services  were 
reasonably  worth,  they  should  allow  her  nothing;  but  if  from  the 
old  man's  mental  and  physical  condition,  they  find  that  she  ren- 
dered unusual  and  unpleasant  services,  and  that  these  services 
were  not  compensated  for  by  her  board,  treatment,  etc.,  they  could 
allow  whatever  such  services  were,  according  to  the  evidence,  rea- 
sonably worth  during  the  three  years  before  suit  brought,  over 
and  above  what  was  received." 

The  court  thus  in  effect  ignored  the  relation  of  parent  and  child 
and  passed  by  the  rule  of  law  applicable,  omitting  any  allusion  to 
the  important  and  pertinent  question  whether  or  not  there  was  an 
agreement,  express  or  implied,  between  the  plaintiff  and  her  father 
in  his  lifetime,  that  she  should  have  pecuniary  compensation  for 
the  labor  she  did.  In  this  there  is  error.  The  jury  should  have 
been  instructed  substantially  as  indicated  in  this  opinion.     Indeed, 


EXPRESS    AND    IMPLIED    CONTRACTS.  21 

the  court  might,  if  the  whole  of  the  evidence  before  the  jury  was 
sent  up  as  part  of  the  case  on  appeal,  have  told  them  that  accept- 
ing the  evidence  as  true,  the  plaintiff  could  not  recover,  and  they 
ought  to  render  a  verdict  in  favor  of  the  defendant. 
There  must  be  a  new  trial. 

In  Williams  v.  Barnes,  IA — 348,  the  plaintiff  was  the  son  of  the  intes- 
tate and  sued  the  estate  for  services  rendered  as  overseer  for  his  mother 
for  two  years  after  he  came  of  age.  Ruffin,  C.  J.,  says:  "Such  claims, 
without  probable  evidence  of  a  contract,  ought  to  be  frowned  on  by 
courts  and  juries.  To  sustain  them  tends  to  change  the  character  of 
our  people,  cool  domestic  regard,  and  in  the  place  of  confidence,  sow 
jealousies  in  families."  The  principle  in  the  text  above  is  acted  on  in 
the  following  cases:  Mother  and  son,  Avitt  v.  Smith,  120 — 392;  father 
and  daughter,  Stallings  v.  Ellis,  136—69;  stepfather  and  stepdaughter  in 
same  family,"  Hussey  v.  Rountree,  44 — 110;  grandfather  and  illegitimate 
grandson  in  the  same  family,  Hudson  v.  Lutz,  50 — 217;  grandfather  and 
granddaughter  in  same  family,  Dodson  v.  McAdams,  96 — 149;  stepfather 
and  stepchildren  in  same  family,  Mull  v.  Walker,  100 — 46;  son-in-law 
and  mother-in-law  in  one  family,  Callahan  v.  Wood,  118 — 752;  uncle  and 
nephew  in  one  family,  Hicks  v.  Barnes,  132 — 846. 

In  Hauser  v.  Sain,  74 — 552,  the  court  held  that  the  relation  of  grand- 
father and  granddaughter  in  one  family  was  not  sufficient  to  rebut  the 
presumption  of  contract,  but  this  is  in  conflict  with  the  cases  above,  and 
has  been  overruled  in  Miller  v.  Lash,  85—51.  In  Whitaker  v.  Whitaker, 
138_205,  plaintiff  was  grandson  of  intestate,  and  did  not  live  with  him 
but  supported  himself;  this  relation  did  not  rebut  the  presumption  of  a 
promise  to  pay. 

In  the  following  cases  there  was  some  agreement  as  to  compensa- 
tion: A  son-in-law  who  was  to  support  the  father-in-law  for  certain 
property,  could  not  recover  for  extra  care  and  trouble,  Peele  v.  White, 
74 — 480;  niece  rendered  services  to  be  compensated  for  in  uncle's 
will,  and  no  will  was  made,  Lawrence  v.  Hester,  93—79;  service  ren- 
dered in  the  family  to  be  paid  for  in  will,  and  this  was  not  done.  Miller 
v.  Lash,  85—51;  grandson  lived  with  grandfather  after  he  was  of  age, 
upon  agreement  to  receive  part  of  the  estate,  and  no  provision  was 
made  for  him,  Lipe  v.  Houck,  128—115;  services  rendered  by  son-in- 
law  upon  agreement  which  intestate  failed  to  comply  with,  Whetstjne 
v.  Wilson,  104 — 385;  where  a  deed  made  to  son-in-law  as  consideration 
for  services  was  set  aside  by  decree  of  court,  the  claim  for  service 
was  revived,  Davis  v.  Duvall,  111 — 422;  where  a  daughter  was  to  re- 
main with  her  father  during  his  life  and  receive  one-fourth  of  his 
property,  if  she  failed  to  get  this  and  performed  her  part  she  could 
recover  for  her  services,  Tussey  v.  Owen,  139 — 457. 

Some  of  the  cases  above  seem  to  hold  that  blood  relationship  alone 
may  rebut  the  presumption  of  implied  contract;  but  it  is  the  "one- 
family  relation"  which  overcomes  that  presumption.  Winkler  v.  Killian, 
141—575:  Dunn  v.  Currie,  141—123;  15  A.  &  E.  Enc,  1083;  21  Ibid., 
1061;  2  Page  Cont.,  sees.  778-784;  Mordecai's  Lectures,  109  to  114. 

For  further  discussion  and  illustration,  see  Henderson  v.  McLain, 
146—329;  Freeman  v.  Brown,  151—111;  Spencer  v.  Spencer,  181  Mass., 
471.  63  N.  E.,  947;  Disbrow  v.  Durand,  54  N.  J.  L.,  343.  33  A.  S.  R., 
678;  Mark  v.  Boardman,  28  Ky.,  855,  89  S.  W.,  481,  1  L.  R.  A.  (N.  S.), 
819;  Hodge  v.  Hodge,  44  Wash.,  196,  91  Pac.  764,  11  L.  R.  A.  (N.  S.), 
873,  subject  note;  40  Cyc,  2813;  Contracts,  Cent.  Dig.,  sec.  130;  Dec. 
Dig.,  sees.  4,  27;  wife  performing  service  for  supposed  husband,  Cooper 
v.  Cooper,  .147  Mass.,  370,  17  N.  E.,  892,  9  A.  S.  R.,  721;  officer  per- 
forming service  for  corporation,  Caho  v.  R.  R.,  147 — 20;  3  L.  R.  A.,  378. 


22  FORMATION    OF    CONTRACT. 


Sec.   3.      Implied   contract    (in   law).      Quasi   contract. 

(10)   BAHNSEN  v.  CLEMMONS, 

79  N.  C,  556—1878. 

This  was  a  civil  action  for  money  had  and  received.  The  facts 
are  sufficiently  stated  in  the  opinion.  There  was  a  verdict  and 
judgment  for  the  plaintiff,  and  defendant  appealed. 

Smith,  C.  J.  The  plaintiff's  intestate,  O.  A.  Keehln,  for  sev- 
eral years  prior  and  up  to  June  1,  1861,  held  the  office  of  post- 
master at  Salem,  and  as  such  had  received  and  then  held  the  sum 
of  three  hundred  and  thirty  dollars  and  twenty-two  cents,  moneys 
belonging  to  the  government  of  the  United  States.  The  defendant 
had  entered  into  divers  contracts  for  carrying  the  mails,  under 
which  there  was  a  much  larger  sum  due  him  from  the  postoffice 
department. 

The  balance  in  the  intestate's  hands  had  been  from  time  to  time, 
under  orders  of  the  department,  paid  over  to  the  defendant  and 
his  receipts  taken  therefor.  The  defendant  applied  to  the  intestate 
to  pay  over  this  sum  to  him,  and  the  intestate  refused  to  do  so 
unless  directed  by  the  postoffice  department  of  the  newly  formed 
government  of  the  Confederate  States  which  had  then  assumed  and 
was  exercising  control  over  the  mails  and  postoffices  in  this  State. 
The  defendant  procured  the  required  order,  and  on  presenting  it 
the  entire  amount  was,  in  the  spring  of  1862,  paid  over  to  him  by 
the  intestate.  After  the  close  of  the  war  and  the  restoration  of 
the  authority  of  the  United  States,  the  defendant  made  demand 
and  collected  from  the  postoffice  department  payment  in  full  for 
all  his  services  as  mail  carrier  up  to  June  1,  1861,  no  deduction 
being  made  for  the  sum  paid  him  by  the  intestate.  The  intestate 
has  also  been  compelled  to  account  for  the  same  money  and  has 
paid  it  to  the  United  States.  This  action  is  instituted  to  recover 
the  amount  paid  to  the  defendant,  as  paid  without  consideration, 
and  in  breach  of  defendant's  contract  to  apply  the  same  to  the 
debt  due  him  from  the  United  States,  and  in  exoneration  of  the 
intestate's  liability  therefor. 

The  defendant  has  thus  twice  received  payment  for  his  services 
in  part,  once  from  the  intestate  and  again  from  the  United  States. 
The  intestate  has  twice  paid  the  money,  once  to  the  defendant  and 
next  under  compulsion  to  the  United  States.  It  is  as  inequitable 
for  the  one  to  receive  and  retain  the  double  payment  as  it  is  wrong 
that  the  other  who  has  twice  paid  his  money  should  lose  it  and  be 
without  remedy.  The  inequality  will  be  corrected  and  the  balance 
adjusted  by  the  defendant's  refunding  what   he  has  received  and 


EXPRESS    AND    IMPLIED    CONTRACTS.  23 

improperly  diverted  to  his  own  use.  This  result,  in  itself  so  rea- 
sonable and  just,  can  be  attained  upon  well-settled  principles  of 
law  applicable  to  an  action  for  money  had  and  received. 

"When  the  defendant,"  says  Mr.  Greenleaf,  "is  proved  to  have 
in  his  hands  the  money  of  the  plaintiff  which  ex  equo  et  bono,  he 
ought  to  refund,  the  law  conclusively  presumes  that  he  has  prom- 
ised so  to  do,  and  the  jury  are  bound  to  find  accordingly;  and 
after  verdict  the  promise  is  presumed  to  have  been  actually 
proved."  2  Greenl.  Ev.,  sec.  104.  The  count  for  money  had  and 
received  which  in  its  spirit  and  objects  has  been  likened  to  a  bill 
in  equity,  may  in  general  be  proved  by  any  legal  evidence  showing 
that  the  defendant  has  received  or  obtained  possession  of  the 
money  of  the  plaintiff  which  in  equity  and  good  conscience  he 
ought  to  pay  over  to  the  plaintiff."     Ibid.,  sec.  117. 

The  plaintiff's  right  to  recover  is  resisted  on  two  grounds, — that 
the  payment  was  voluntary,  and  that  the  transaction  was  itself 
illegal,  and  the  law  refuses  its  aid  to  either. 

It  is  true  the  intestate  paid  the  money  of  his  own  accord,  but 
he  did  so  at  the  instance  of  the  defendant,  and  it  was  to  be  ap- 
plied to  the  discharge  pro  tanto  of  his  claim  against  the  United 
States.  Had  the  defendant  thus  applied  the  money,  and  this  he 
should  have  done  or  offered  to  do  in  the  settlement  of  his  claims, 
the  intestate  would  have  been  relieved  of  his  own  liability.  By 
failing  to  give  the  credit  and  collecting  his  whole  debt,  he  left  the 
plaintiff  exposed  to  the  demand  of  the  government,  which  he  was 
again  compelled  to  pay.  This  was  a  breach  of  the  agreement  and 
such  a  misuse  of  the  fund  as  entitled  the  plaintiff  to  maintain  his 
present  action. 

We  are  not  able  to  see  any  force  in  the  objection  founded  upon 
an  alleged  illegality  in  the  transaction.  The  intestate  simply  un- 
dertakes to  appropriate  moneys  in  hand  belonging  to  the  United 
States  to  the  payment  of  a  recognized  debt  due  by  the  United 
States.  The  act  may  have  been  and  indeed  was  unauthorized,  but 
we  can  discover  no  trace  of  illegality  in  it.  The  indebtedness  was 
incurred  under  the  regular  operations  of  the  government  in  the 
administration  of  the  mail  service,  and  an  attempted  though  un- 
warranted adjustment  between  these  parties  can  in  no  just  sense 
be  affected  by  the  civil  commotions  in  the  midst  of  which  it  oc- 
curred.    The  plaintiff  is  in  our  opinion  entitled  to   recover. 

No  error.  Affirmed. 


24  FORMATION    OF    CONTRACT. 

(11)  BRITTAIN  v.  PAYNE, 

118  N.  C,  989,  24  S.  E.,  711—1896. 

This  was  a  civil  action  before  a  Justice  of  the  Peace,  carried 
by  appeal  to  the  Superior  Court. 

/The  plaintiff  alleged  that  he  was  the  owner  of  certain  walnut 
timber  which  he  had  purchased  from  the  defendant,  and  that  the 
defendant  had  sold  $160  worth  of  it  and  got  the  money,  and 
thereby  became  indebted  to  the  plaintiff  in  that  amount,  which  in 
law  the  defendant  agreed  to  pay.  The  defendant  contended  that 
the  action  was  in  tort  and  moved  to  dismiss  the  same  for  want  of 
jurisdiction  in  the  Justice.  The  plaintiff  contended  that  the  action 
was  in  contract  for  money  had  and  received,  and  that  the  tort,  if 
any,  was  waived.  His  Honor,  being  of  opinion  with  the  defend- 
ants, dismissed  the  action,  and  the  plaintiff  appealed. 

Clark,  J.  Where  property  is  tortiously  taken  and  sold,  the 
owner  may  waive  the  tort  and  maintain  an  action  to  recover  the 
money  realized  from  the  sale  by  the  defendant.  Lumber  Co.  v. 
Brooks,  109—698;  Wall  v.  Williams,  91—477.  And  this  is  clearly 
what  the  plaintiff  did  by  his  complaint  in  this  case.  Every  intend- 
ment being  in  favor  of  jurisdiction,  if  the  complaint  could  have 
been  construed  as  being  either  for  the  tort  or  to  recover  the 
money  received  by  the  defendant,  this  being  an  action  before  the 
Justice,  the  court  would  construe  it  to  be  an  action  on  the  implied 
contract  in  favor  of  the  jurisdiction.  Lewis  v.  R.  R.,  95 — 179; 
Stokes  v.  Taylor,  104—394;  Fulps  v.  Mock,  108—601. 

Error. 

See  also  Jones  v.  Baird,  52—152;  Bullinger  v.  Marshall,  70—520 
McDonald  v.  Cannon,  82—245;  Robertson  v.  Dunn.  87—191;  Logan  v 
Wallis  76—416;  Olive  v.  Olive,  95—485;  Edwards  v.  Cowper,  99—421 
White'  v.  Eley,  145—36;  Manning  v.  Fountain,  147—18,  Rem.,  666 
Dusenbury  v.  Spier,  77  N.  Y.,  144;  Force  v.  Haines,  17  N.  J.  L.,  385 
Harty  v.  Polakow,  237  111.,  559,  86  N.  W.,   1085. 

A  contract  implied  in  law  is  also  called  a  constructive  contract  and 
quasi  contract.  It  is  not  really  a  contract  because  the  element  of  con- 
sent is  wanting,  but  the  remedy  was  by  an  action  ex  contracto  as 
distinguished  from  an  action  ex  delicto.  Where  the  consent  is  reason- 
ably inferred  from  the  conduct  of  the  parties,  it  is  a  contract  implied 
in  fact;  where  such  consent  can  not  be  inferred,  the  law  imposes  the 
obligation,  as  if  there  had  been  consent,  to  prevent  injustice.  15  Am. 
&  Eng  Encyc.  1078;  9  Cyc,  242;  Woods  v.  Ayres,  39  Mich.,  345,  33 
A.  R.,  396;  6  R.  C.  L.,  588;  Pothier,  72. 

"Quasi  contracts  fall  under  three  classes:  I.  Obligations  founded  upon 
a  record  as  a  judgment;  2.  Obligations  founded  upon  a  statutory,  or 
official  or  customary  duty;  3.  Obligations  founded  upon  the  funda- 
mental principle  that  no  one  ought  unjustly  to  enrich  himself  at  the 
expense  of  another."  Clark  on  Contracts,  p.  533.  See  also  2  Page  on 
Contracts,  sec.  771   ct  scq. 

Other  cases  coming  under  this  class  of  contracts  are:  Necessaries 
furnished  to  an   infant.  Hyman  v.   Cain.  48 — 111;   or  to  a  lunatic,  Rich- 


OFFER    AND    ACCEPTANCE.  25 

ardson  v.  Strong,  35 — 106;  money  paid  to  the  use  of  another.  Springs  v. 
McCoy,  120 — 417;  or  by  mistake,  Hauser  v.  McGinnas,  108 — 631;  money 
collected  by  one  of  two  joint  obligees,  Kearns  v.  Heitman,  104 — 332; 
money  collected  that  belongs  to  another,  Horton  v.  Holliday,  6 — 111; 
goods  furnished,  Carter  v.  McNeely,  23 — 448;  funeral  expenses  paid 
by  one  not  administrator,  Ray  v.  Honeycutt,  119 — 512;  Gregory  v. 
Hooker,  8—394;  Parker  v.  Lewis,  13—22;  Ward  v.  Jones,  44—127; 
Barbee  v.  Green,  86 — 158;  money  had  and  received,  Davison  v.  Land 
Co.,  126 — 704;  Board  of  Education  v.  Henderson,  126 — 689.  See  also 
Luton  v.  Badham,  127—96,  post  64;  Howell  v.  Solomon,  167—588; 
Rem.,  320—327,  658—669. 

Sec.  4.     Offer  and  acceptance. 

1.  Explained. 

(12)   ELKS  v.  INSURANCE  CO., 

159  N.  C,  619,  75  S.  E.,  808—1912. 

This  is  an  action  to  recover  damages  for  breach  of  an  alleged 
contract  to  lend  the  plaintiff  $1,000.  The  application  was  not  in- 
troduced in  evidence,  and  there  is  nothing  to  indicate  the  terms  of 
the  loan  or  the  time  when  it  was  to  be  payable.  The  facts  suffi- 
ciently appear  in  the  opinion.  From  a  judgment  of  nonsuit  the 
plaintiff  appealed.  Affirmed. 

AleEn,  J.  This  appeal  presents  one  question  for  our  decision, 
and  that  is,  whether  the  evidence  introduced  by  the  plaintiff,  con- 
strued most  favorably  for  him,  establishes  a  contract  between  him 
and  the  defendant.     .     .     . 

It  is  elementary  that  it  is  necessary  that  the  minds  of  the  par- 
ties meet  upon  a  definite  proposition.  "There  is  no  contract  un- 
less the  parties  thereto  assent,  and  they  must  assent  to  the  same 
thing,  in  the  same  sense.  A  contract  requires  the  assent  of  the 
parties  to  an  agreement,  and  this  agreement  must  be  obligatory, 
and,  as  we  have  seen,  the  obligation,  in  general,  be  mutual."  1 
Par.  Cont.,  475. 

If  the  alleged  contract  is  made  by  conversations  and  corre- 
spondence, the  whole  must  be  considered,  and  although  certain 
parts  taken  alone  appear  to  constitute  a  binding  agreement,  if  the 
whole  correspondence  and  negotiations  show  that  there  were  other 
terms  contemplated  by  both  parties,  as  essential  to  the  proposed 
contract,  on  which  they  fail  to  agree,  there  is  no  contract.  Hus- 
sey  v.  Horne-Payne,  4  App.  Cas.,  312.  The  leading  opinion  in 
this  case  was  written  by  Lord  Cairns,  and  Lord  Selborne  concur- 
ring, sums  up  the  conclusion  of  the  court  as  follows :  "The  ob- 
servation has  often  been  made  that  a  contract  established  by  let- 
ters may  sometimes  bind  the  parties  who,  when  they  wrote  those 
letters,  did  not  imagine  that  they  were  finally  settling  the  terms 


26  FORMATION    OF    CONTRACT. 

of  the  agreement  by  which  they  were  to  be  bound;  and  it  appears 
to  me  that  no  such  contract  ought  to  be  held  established,  even  by 
letters  which  would  otherwise  be  sufficient  for  the  purpose,  if  it  is 
clear,  upon  the  facts,  that  there  were  other  conditions  of  the  in- 
tended contract,  beyond  and  besides  those  expressed  in  the  letters, 
which  were  still  in  a  state  of  negotiation  only,  and  without  the 
settlement  of  which  the  parties  had  no  idea  of  concluding  any 
agreement." 

If  the  minds  of  the  parties  meet  upon  a  proposition,  which  is 
sufficiently  definite  to  be  enforced,  the  contract  is  complete,  al- 
though it  is  in  the  contemplation  of  the  parties  that  it  shall  be 
reduced  to  writing  as  a  memorial  or  evidence  of  the  contract ; 
but  if  it  appears  that  the  parties  are  merely  negotiating  to  see  if 
they  can  agree  upon  terms,  and  that  the  writing  is  to  be  the  con- 
tract, then  there  is  no  contract  until  the  writing  is  executed. 
Winn  v.  Bull,  7  Ch.  D.,  31  ;  Pratt  v.  R.  R.,  21  N.  Y.,  308;  Miss. 
Steam.  Co.  v.  Swift,  86  Me.,  248,  41  A.  S.  R.,  553;  Rankin  v. 
Mitchem,  141  N.  C,  280.     .     .     . 

Contracts  are  usually  made  by  an  offer  by  one  party  and  an 
acceptance  by  the  other;  and  it  is  in  this  way,  the  plaintiff  con- 
tends, a  contract  was  completed  between  him  and  the  defendant. 
When  an  offer  and  acceptance  are  relied  on  to  make  a  contract, 
"the  offer  must  be  one  which  is  intended  of  itself  to  create  legal 
relations  on  acceptance.  It  must  not  be  an  offer  intended  merely 
to  open  negotiations  which  will  ultimately  result  in  a  contract,  or 
intended  to  call  forth  an  offer  in  legal  form  from  the  other  party 
to  whom  it  is  addressed."     1   Page  Cont.,  sec.  26.     .     .     . 

"The  offer,  even  if  intended  to  create  legal  relations,  must  be 
so  complete  that  upon  acceptance  an  agreement  is  formed  which 
contains  all  the  terms  necessary  to  determine  whether  the  con- 
tract has  been  performed  or  not.  An  offer  in  which  the  price  is 
not  fixed,  and  yet  is  so  specified  that  it  is  evidence  that  the  par- 
ties did  not  intend  merely  whatever  should  be  a  reasonable  com- 
pensation, is  not  definite  enough."  1  Page  Cont.,  sec.  28.  "The 
offer  must  not  only  be  complete  in  terms,  but  the  terms  must  be 
sufficiently  definite  to  enable  the  court  to  determine  ultimately 
whether  the  contract  has  been  performed  or  not.  If  no  breach  of 
the  contract  could  be  assigned  which  could  be  measured  by  any 
test  of  damages  from  the  contract,  it  has  been  said  to  be  too  in- 
definite to  be  enforcible,  and  this  vice  is  usually  due  to  the  form 
of  the  offer."     1  Page  Cont.,  sec.  28. 

The  same  principle  is  declared  in  Tanning  Co.  v.  Telegraph  Co., 
143  N.  C,  378,  in  which  Justice  Brown,  speaking  for  the  court, 
says:  "The  offer  must  be  distinct  as  such,  and  not  merely  an  in- 
vitation   to    enter   into    negotiations    upon    a    certain   basis.      Wire 


OFFER    AND    ACCEPTANCE.  27 

Works  v.  Sorrell,  142  Mass.,  442;  Beaupre  v.  Tel.  Co.,  21  Minn., 
155;  24  A.  &  E.  Encyc,  1029,  and  cases  cited.  Again  the  offer 
must  specify  the  specific  quantity  to  be  furnished,  as  a  mere  ac- 
ceptance of  an  indefinite  offer  will  not  create  a  binding  contract. 
McCaw  Manfg.  Co.  v.  Felder,  115  Ga.,  408;  24  A.  &  E.  Encyc, 
1030,  n.  1.,  and  cases  cited.     .     .     .     Clark  Cont.,  sec.  29." 

If  the  minds  of  the  parties  have  met,  and  the  terms  have  been 
agreed  to,  it  does  not  always  follow  that  a  contract  is  complete 
and  such  a  one  as  can  be  enforced,  although  not  illegal,  as  the  law 
demands  that  the  terms  shall  be  definite  and  certain,  or  capable  of 
being  made  so.  Silverthorne  v.  Fowle,  49  N.  C,  363 ;  Spragins  v. 
White,  108  N.  C,  453;  Thomas  v.  Shooting  Club,  123  N.  C,  287; 
Price  v.  Price,  133  N.  C,  515.     .     .     . 

Having  determined  the  elements  entering  into  a  completed  con- 
tract under  conditions  existing  between  the  plaintiff  and  the  de- 
fendant, let  us  see  if  the  plaintiff  has  met  the  requirements  of  the 
law.  We  are  of  the  opinion  he  has  not.  1.  When  all  the  evi- 
dence is  considered,  including  the  correspondence,  it  amounts  to 
no  more  than  negotiations  for  a  contract,  and  the  conduct  of  the 
plaintiff  shows  that  he  so  understood  it.  .  .  .  2.  No  promise  on  the 
part  of  the  defendant,  express  or  implied,  to  lend  the  plaintiff 
$1,000  is  proven.  The  approval  by  the  finance  committee,  if  made, 
was  not  such.  It  is  merely  a  safeguard  adopted  by  the  defendant 
as  preliminary  to  a  loan.  ...  3.  The  agreement,  as  contended 
for  by  the  plaintiff,  shows  that  the  transaction  was  not  completed, 
and  that  other  terms  were  to  be  agreed  to,  or  it  is  so  indefinite 
that  it  can  not  be  enforced. 

The  plaintiff  says  he  offered  to  borrow  $1,000  of  the  defendant, 
and  that  the  defendant  accepted  his  offer.  It  is  agreed  that  a  note 
and  mortgage  were  to  be  executed  by  the  plaintiff  to  consummate 
the  contract,  but  he  tendered  neither  to  the  defendant.  The  rea- 
son he  did  not  is  obvious.  He  did  not  know  how  to  write  the 
note  and  mortgage,  and  no  lawyer  could  have  prepared  them,  be- 
cause stipulations  necessary  to  a  complete  contract  had  not  been 
discussed  or  agreed  to,  to  wit,  the  time  the  loan  was  to  run.  It 
is  certain  the  plaintiff  did  not  intend  to  borrow  $1,000,  payable 
one  day  after  date,  because  he  says  he  needed  the  money  to  use 
in  payment  of  debts,  in  repairing  a  mill,  and  in  cultivating  crops, 
and  if  not  payable  one  day  after  date,  when  was  it  to  be  due? 
Suppose  the  defendant  had  said:  "Prepare  your  note  and  mort- 
gage, and  I  will  lend  you  the  money,  payable  in  two  months,"  or 
three  months  or  six  months ;  is  it  not  certain  that  the  plaintiff  had 
the  right  to  say:  "I  do  not  want  the  money  on  such  short  time, 
and  have  not  promised  to  take  it;"  and  if  the  plaintiff  had  said 
the  note  must  become  due  one  year  or  two  years  from  date,  that 


28  FORMATION    OF    CONTRACT. 

the  defendant  could  have  declined  to  lend  on  such  terms,  because 
it  had  not  promised  to  do  so.  If  so,  terms  which  were  necessary 
to  complete  the  contract  had  not  been  agreed  to.  We  are  of  opin- 
ion that  no  contract  has  been  established,  and  that  the  judgment 
of  nonsuit  was  properly  entered. 

Mere  promissory  expressions,  resulting  from  excitement,  strong  feel- 
ing or  anxiety,  do  not  result  in  contractual  obligation,  though  accepted, 
Stamper  v.  Temple,  6  Humph.,  113,  44  A.  D.,  296;  nor  does  the  mere 
statement  of  a  fact  have  that  effect,  Williams  v.  Brickell,  37  Miss., 
682,  75  A.  D.,  88;  Hopson  v.  Brunwankel,  24  Tex.,  607,  76  A.  D..  124; 
Thruston  v.  Thornton,   1    Cush.,  89. 

2.  Offer    must    be    communicated. 

(13)   BURNS  v.  ALLEN, 

33   N.   C,  25—1850. 

Nash,  J.  The  defendant  sold  to  the  plaintiff  a  tract  of  land 
for  a  specific  sum  of  money,  and  the  deed  contained  a  covenant 
for  quiet  enjoyment.  After  the  conveyance  the  land  was  sur- 
veyed according  to  the  metes  and  bounds  contained  in  it,  when  it 
was  discovered  that  it  covered  twenty-two  acres  of  land  owned  by 
the  plaintiff.  This  fact  was  communicated  to  the  defendant  by  a 
witness  in  the  case,  who  was  requested  by  him  to  tell  the  plaintiff 
he  did  not  wish  to  be  run  to  any  costs,  but  was  willing  to  pay  for 
the  land.  To  other  witnesses  he  stated  he  did  not  wish  Burns  to 
sue  him  ;  he  would  do  what  was  right ;  he  was  willing  to  pay  the 
value  of  the  land.  The  action  is  in  assumpsit  and  the  declaration 
contains  two  counts.  The  first  is  on  a  promise  to  pay  by  the  de- 
fendant, in  consideration  of  forbearance  on  the  part  of  the  plain- 
tiff to  sue,  to  pay  the  plaintiff  the  value  of  the  land.  The  second 
is  on  a  promise  to  indemnify  the  plaintiff  for  his  loss  in  purchas- 
ing his  own  land.  There  is  nothing  in  the  case  to  show  that  the 
plaintiff  and  defendant  ever  entered  into  any  agreement  respecting 
the  land,  after  the  execution  of  the  conveyance;  or  that  after  that 
time  they  ever  had  any  communication  on  the  subject.  The  case 
presents  simply  an  offer  on  the  part  of  the  defendant  to  settle  in 
the  way  indicated  by  him.  without  any  action  on  the  part  of  the 
plaintiff  acceding  to  it,  or  without  any  evidence  to  show  that  it 
was  ever  made  known  to  him.  Neither  count  in  the  declaration 
is  sustained.  An  assumpsit  is  a  contract,  which  requires  the  assent 
of  both  the  contracting  parties.  This  was  a  mere  offer  to  make 
one.  which  might  have  been  withdrawn  by  the  defendant  at  any 
time  before  it  was  accepted  by  the  plaintiff.  Routledge  v.  Grant, 
4  Bing.,  653.  Judgment  affirmed. 


OFFER   AND   ACCEPTANCE.  29 

(14)  PHIFER  v.  R.  R.  CO., 

89  N.  C,  388,  45  A.  R.,  687—1883. 

Civil  action  for  loss  of  goods.  Judgment  for  plaintiff,  and  de- 
fendant appealed. 

Smith,  C.  J.  The  plaintiffs,  in  the  month  of  September,  1880, 
placed  in  the  custody  of  the  defendant  company  (Carolina  Central 
R.  R.),  at  Lincolnton,  for  the  transportation  over  its  and  the  asso- 
ciate roads  and  line  of  steamers,  forming  what  is  known  as  the 
"Seaboard  Air  Line,"  and  delivery  to  Hopkins,  Dwight  &  Co.,  con- 
signees at  New  York,  in  different  lots,  18  bales  of  cotton,  taking 
at  each  time  receipts  or  bills  of  lading  (which  contained,  among 
other  things,  the  words,  "subject  to  the  conditions  stated  upon  this 
receipt,  and  to  which,  by  the  acceptance  thereof  the  shipper  as- 
sents," the  opinion  copying  the  receipt).  On  the  reverse  side  of 
the  receipt,  among  other  conditions,  was  one  in  these  words : 

"It  is  further  stipulated  and  agreed  that  in  case  of  any  loss, 
detriment  or  damage  done  to,  or  sustained  by,  any  of  the  property 
herein  receipted  for  during  such  transportation,  whereby  any  legal 
liability  or  responsibility  shall  or  may  be  incurred,  that  company 
alone  shall  be  answerable  therefor  in  whose  actual  custody  the 
same  may  be  at  the  time  of  the  happening  of  such  loss,  detriment 
or  damage ;  and  the  carrier  so  liable  shall  have  the  benefit  of  any 
insurance  that  may  have  been  upon  or  on  account  of  said  goods." 

"Notice. — In  accepting  this  bill  of  lading,  the  shipper  or  other 
agent  of  the  property  carried  expressly  accepts  and  agrees  to  all 
its  stipulations,  exceptions  and  conditions." 

It  was  shown  and  not  controverted  on  the  trial  (if  indeed  such 
is  not  admitted  in  the  paper  bearing  the  signature  of  the  respective 
counsel  and  set  out  in  the  transcript)  that  the  goods  were  safely 
carried  over  the  road  of  the  defendant  and  delivered  to  the  com- 
pany whose  road  next  connects  with  that  of  the  defendant,  and 
forms  part  of  the  line  of  the  associated  companies  designated  by 
the  initial  letters  "S.  A.  L."  on  the  receipt,  and  that  thence  they 
were  also  safely  transported  and  delivered  to  the  Old  Dominion 
Steamship  Company,  the  last  link  in  the  chain  of  communication, 
and  Avere  burned  while  on  board  of  one  of  its  steamers. 

The  complaint,  containing  two  causes  of  action,  charges  in  the 
first  that  the  defendant,  as  a  common  carrier,  for  a  valuable  con- 
sideration contracted  to  carry  the  cotton  from  Lincolnton  to  New 
York  over  its  own  and  the  lines  of  the  other  companies,  using  the 
latter  as  agencies  of  its  own  for  this  purpose ;  and  in  the  second, 
that  the  defendant,  as  one  of  a  partnership  association  of  common 
carriers,  formed  by  itself  and  the  Raleigh  and  Augusta  Air  Line 


30  FORMATION    OF    CONTRACT. 

R.  R.,  the  Raleigh  and  Gaston  R.  R.,  the  Seaboard  and  Roanoke 
R.  R.  and  the  Old  Dominion  Steamship  Co.,  and  constituting  the 
Seaboard  Air  Line,  on  behalf  of  all  undertook  and  agreed  to  con- 
vey the  cotton  safely  along  and  over  the  entire  route  to  its  termi- 
nus in  New  York. 

One  of  the  plaintiffs  testified  to  his  having  accepted  the  bill  of 
lading  after  learning  the  charge  of  carriage,  but  did  not  read  it 
nor  give  assent  to  its  conditions,  except  by  accepting  it,  and  did 
not  know  what  they  were  until  after  the  cotton  was  burned. 

One  M.  Duke,  for  the  defendant,  stated  that  he  made  no  con- 
tract for  transportation  other  than  in  the  bill  of  lading,  and  that 
when  the  first  one  was  taken  out  by  the  plaintiff,  McBee,  witness 
asked  him  if  he  had  read  it,  to  which  he  replied:  "No,  he  had 
not ;  it  was  no  use,  as  he  would  never  get  his  pay,  as  it  did  not 
amount  to  anything  anyway,"  and  that  the  plaintiff  had  filled  up 
one  of  the  blanks  in  his  own  writing,  as  he  had  before  in  the  bills 
issued  to  others.  It  is  needless  to  set  out  more  of  the  evidence  in 
the  view  we  take  of  the  appeal. 

In  whichever  capacity  the  defendant  entered  into  the  contract 
of  carriage,  assuming  an  individual  or  partnership  obligation,  it  is 
outside  of  the  common  law  liability  attaching  to  common  carriers 
over  their  own  lines,  and  has  its  force  in  the  terms  and  conditions 
of  a  special  contract,  and  the  plaintiffs  must  abide  by  such  of  them 
as  are  reasonable  in  themselves  and  not  repugnant  to  public  policy. 

The  condition  entering  into  the  contract,  and  to  which  the  plain- 
tiffs acceded  by  receiving  the  bill  of  lading,  and  to  which  their 
attention  is  called  by  an  entry  on  the  face  of  the  paper  is,  that  in 
case  of  loss  the  plaintiffs  will  look  alone  to  the  carrier  to  whose 
negligence  the  loss  is  owing  for  compensation  in  damages.  The 
plaintiffs  accept  this  condition,  which  places  them  in  the  same  rela- 
tion towards  the  separate  carriers,  associated  to  form  a  through 
line,  and  relieve  the  shippers  of  the  necessity  of  having  forwarding 
agents  at  each  connecting  point,  with  increased  expense,  delay  and 
annoyance  incident  thereto,  as  if  no  such  connection  had  been  made 
among  the  several  companies.  In  the  latter  case  the  shippers 
would  be  compelled  to  seek  redress  from  the  carrier  in  default, 
and  the  same  remedies  are  reserved  to  them  against  the  several 
companies  united  in  forming  a  continuous  line.  Such  an  arrange- 
ment secures  manifest  advantages  to  shippers,  and  it  does  not  seem 
to  ns  unreasonable  that  they  should  be  required  to  hold  each  car- 
rier only  responsible  for  loss  from  its  negligence  and  omissions 
and  not  one  for  another,  and  tbis  is  all  that  the  clause  recited  un- 
dertakes to  accomplish.  It  is  not  a  case  of  notice,  but  of  contract; 
and  the  cases  wherein  the  controversy  has  been,  whether  it  has 
been  brought  to  the  knowledge  of  a  party  sending  off  his  goods 


OFFER    AND    ACCEPTANCE.  31 

or  not,  have  no  application,  since  transportation  is  undertaken  on 
the  face  of  the  receipt,  "subject  to  the  conditions  stated  upon  this 
receipt"  and  contained  on  the  reverse  side.     .     .     . 

The  court  erred  in  permitting  the  jury  to  eliminate  the  provision 
from  a  contract  of  which  it  formed  a  part,  upon  the  ground  that 
it  was  not  in  force  unless  read  by  or  known  to  the  plaintiffs,  or 
to  one  of  them,  though  the  receipt  upon  its  face  directed  attention 
to  the  conditions ;  and  it  was  their  own  fault  if  they  failed  to  look 
at  them.  Certainly  this  inattention  of  the  plaintiffs  can  not  change 
the  terms  of  the  agreement  to  the  prejudice  of  the  defendant,  and 
deprive  it  of  a  defense  under  it. 

For  the  erroneous  rulings  against  the  defendant  the  verdict  must 
be  set  aside  and  a  new  trial  awarded,  and  it  is  so  adjudged.  Let 
this  be  certified. 

Part  of  the  above  case  has  been  omitted,  which  deals  with  the  validity 
of  the  contract  as  exempting  from  liability  for  negligence,  and  this 
is  treated  under  the  case  of  Capehart  v.   R.   R.,  post. 

The  intention  of  the  parties  must  be  communicated  by  word  or  act, 
and  therefore  a  person  can  not  accept  an  offer  which  has  not  been 
communicated  to  him.  9  Cyc,  252.  If  the  act  is  voluntary,  and  the 
other  party  receives  the  benefit  without  having  an  opportunity  to  ac- 
cept or  reject,  he  is  not  liable.  15  Am.  &  Eng.  Encyc,  1080;  1  Page  on 
Contracts,  sees.  30,  31,  774,  775,  776;  Clark  on  Contracts,  p.  18;  Bar- 
tholomew v.  Jackson,  20  Johns.,  28,  11  A.  D.,  237,  Rem.,  648;  Caldwell 
v.  Eneas,  2  Mill  (S.  C),  348,  12  A.  D.,  681;  Seals  v.  Edmondson,  73  Ala., 
295,  49  A.  R.,  51. 

For  the  purposes  of  the  law,  "an  offer  is  communicated  when  it  is 
brought  to  the  attention  of  the  adversary  party  in  such  a  manner  that  by 
the  use  of  ordinary  intelligence  he  can  not  help  knowing  its  terms." 
1  Page  on  Contracts,  p.  52. 

(15)    NORMAN   v.  R.  R.   CO., 
161   N.   C,  330,   77  S.   E.,  345,  Ann.   Cas.,   1914  D,  917—1913 

This  was  an  action  for  damages  for  the  wrongful  expulsion  of 
the  plaintiff  from  the  defendant's  train.  The  ticket  was  paid  for 
at  the  regular  rate,  and  contained  printed  matter  on  its  face  with 
the  following  conditions,  among  others:  "Station  stamped  on 
back,  to  station  opposite  point  in  margin  below."  "Void  if  it 
shows  any  alterations,  erasures,  or  is  mutilated  in  any  manner,  or 
if  B.  C.  punch  is  in  any  other  than  place  designated."  The  agent 
failed  to  stamp  the  station  on  the  back ;  the  conductor  refused  to 
recognize  the  ticket,  and  put  the  plaintiff  off.  Judgment  for  the 
plaintiff,  and  the  defendant  appealed.  Affirmed. 

Allen,  J.  The  plaintiff  paid  the  usual  and  customary  fare  for 
his  ticket,  and  was  granted  no  right  or  privilege  in  consideration 
of  a  reduced  rate.  Under  these  circumstances  the  ticket  was  in 
the  nature  of  a  receipt  for  the  passage  money,  and  its  office  was 
to  furnish  evidence  to  the  agents  of  the  company  that  the  bearer 


32  FORMATION    OF    CONTRACT. 

was  entitled  to  be  carried.  It  was  prima  facie  evidence  that  the 
holder  had  paid  the  regular  price  for  it,  and  had  the  right  to  be 
transported,  and  was  evidence  of  an  agreement  on  the  part  of 
the  defendant  to  carry  him  to  his  destination  for  a  consideration 
paid.  1  Fet.  Car.,  sec.  275  ;  Boyd  v.  Spencer,  103  Ga.,  146.  The 
plaintiff  performed  his  part  of  the  contract  and  was  entitled  to  a 
valid  ticket,  and  in  the  absence  of  evidence  of  assent  on  his  part 
prior  to  or  at  the  time  of  the  purchase,  was  not  bound  by  a  stip- 
ulation rendering  the  ticket  invalid,  as  there  was  no  consideration 
to  support  the  stipulation. 

The  Supreme  Court  of  Tennessee,  speaking  of  the  question  in 
R.  R.  v.  Turner,  100  Term.,  223,  says :  "We  are  also  of  opinion 
that  the  mere  stamping  or  printing  of  a  limitation  or  condition 
upon  the  back  or  face  of  a  ticket,  and  the  acceptance  of  such 
ticket  by  a  passenger,  without  more,  is  not  sufficient  to  bind  him 
to  such  condition  or  limitation,  in  the  absence  of  actual  notice  to 
him  of  such  condition  or  limitation-  and  his  assent  thereto  when 
he  purchases  the  ticket.  It  can  not  be  presumed  that  every  person 
buying  a  railroad  ticket,  for  ordinary  and  general  use,  will,  in  the 
hurry  and  bustle  of  travel,  stop  to  read  and  critically  inspect  his 
ticket.  As  a  matter  of  fact,  but  little  opportunity  is  afforded  him 
to  do  so.  He  generally  takes  his  place  in  the  crowd  at  the  ticket 
window,  produces  and  hands  over  his  money  with  a  request  for 
a  ticket  to  destination.  His  money  is  received.  The  ticket  is  pro- 
duced, and,  after  being  stamped,  is  handed  to  him  through  the 
ticket  window.  He  has  had  no  opportunity  to  see  what  is  upon 
it,  and  has  no  time,  in  the  rush,  to  stop  and  read  and  consider 
what  may  be  printed  or  stamped  on  its  face  or  back,  and  when 
he  has  paid  full  fare  there  is  no  occasion  for  his  doing  so,  inas- 
much as  he  can  safely  rely  upon  the  contract  which  the  law  makes 
for  him.  Ordinarily,  local  tickets  do  not  generally  contain  any 
terms  of  contract,  and  are  not  intended  to  do  so.  They  are  mere 
tokens  to  the  passenger  and  vouchers  for  the  conductor,  adopted 
for  convenience  to  show  that  the  passenger  has  paid  his  fare  from 
one  place  to  another,  very  much  in  the  nature  of  baggage  checks. 
The  contract  is  in  fact  made  when  the  ticket  is  purchased,  and  if 
it  is  different  from  what  the  law  would  imply,  it  must  be  so 
stated  and  assented  to  when  the  ticket  is  delivered.  .  .  .  This  rule, 
which  we  consider  to  be  settled  by  the  weight  of  authority  and 
by  reason,  by  no  means  prevents  a  railroad  company  from  selling 
special  tickets  for  special  trains  with  limitations  and  conditions, 
such  as  excursion,  round-trip,  commutation,  and  mileage  tickets, 
when  the  conditions  and  limitations  are  known  to  the  purchaser 
and  assented  to  by  him  orally  or  in  writing,  and  he  has  paid  for 
such  ticket  less  than  the  usual   fare.     When  tickets  are  sold  at  re- 


OFFER    AND    ACCEPTANCE.  33 

duced  rates,  it  has  been  very  wisely  said  that  the  purchaser  should, 
in  consideration  of  s'ich  reduced  fare  or  greater  privileges,  expect 
and  look  for  some  conditions,  limitations,  and  terms  different  from 
those  attaching  to  tickets  generally,  and  be  on  his  guard  to  become 
informed  of  them.  But  there  is  no  such  obligation  upon  the  ordi- 
nary passenger,  who  pays  the  usual  or  full  fare  and  asks  for  no 
reduced  rates  or  special  privileges,  and  he  has  a  right  to  expect 
an  unlimited  ticket."  We  quote  at  length  from  the  opinion  be- 
cause the  rule  with  its  limitation  is  stated  clearly  and  accurately. 

Nor  was  there  anything  on  the  ticket  to  notify  the  plaintiff  or 
to  indicate  to  him  that  he  was  entering  into  a  contract  by  which 
the  ticket  delivered  to  him  would  be  invalid  if  the  station  at  which 
it  was  issued  was  not  stamped  on  the  back,  and  while  common 
carriers  may  make  reasonable  rules  and  regulations,  they  can  not 
bind  persons  dealing  with  them  by  special  contracts  of  which  they 
have  no  notice,  and  not  contained  in  the  writing.     .     .     . 

The  ticket  does  not  say  it  will  be  void  if  the  station  is  not 
stamped  on  the  back,  nor  is  there  anything  to  suggest  that  there 
was  any  obligation  on  the  plaintiff  except  to  present  it ;  and  as  it 
was  evidence  that  the  regular  fare  had  been  paid,  and  required 
no  identification  of  the  purchaser,  we  fail  to  see  how  the  defend- 
ant could  have  suffered  loss  by  accepting  it.  ...  If,  however,  the 
statement  on  the  ticket  is  contractual  and  is  equivalent  to  a  stip- 
ulation that  the  ticket  will  be  invalid  unless  the  station  at  which 
it  was  issued  is  stamped  on  the  back,  there  is  no  evidence  that  the 
plaintiff  had  notice  of  such  requirement,  and  as  he  paid  for  a 
valid  ticket,  he  had  the  right  to  assume  that  the  agent  had  given 
him  what  he  had  paid  for.  Wood  Railways,  vol.  3,  sec.  349 ;  R. 
R.  v.  Turner,  100  Term.,  223;  Head  v.  R.  R.,  79  Ga.,  358;  R.  R. 
v.  Dougherty,  86  Ga.,  744 ;  Ellsworth  v.  R.  R.,  95  Iowa,  107.  .  .  . 

No  error. 

Plaintiff  bought  a  special  excursion  ticket  from  Wilmington  to  Wash- 
ington on  June  13  to  return  June  17,  at  greatly  reduced  rate;  in  attempt- 
ing to  return  on  it  June  18,  and  on  a  different  train,  he  was  put  off  the 
train.  The  court  says  that  under  the  circumstances  he  was  bound  by  the 
terms  of  the  ticket  and  by  the  regulations  of  the  company  as  to  such 
excursions.  McRae  v.  R.  R.,  88 — 526.  A  person  is  charged  with  notice 
of  the  printed  matter  on  a  telegraph  blank  filled  out  by  him,  but  this  will 
not  exempt  the  company  from  liability  for  negligence.  Pegram  v.  Tel. 
Co.,  97— p.  61;  Shaw  v.  Tel.  Co.,  56  L.  R.  A.,  486. 

As  to  notice  of  terms,  there  is  a  distinction  between  the  ordinary 
passenger  ticket  which  is  regarded  as  a  mere  voucher  or  token  and  a 
ticket  which  is  signed  and  purports  to  be  the  entire  contract  between 
the  carrier  and  the  passenger.  Thomas  v.  R.  R.,  131 — p.  593;  Clark  on 
Contracts,  p.  19.  For  a  full  discussion  of  the  effect  of  terms  appearing 
on  a  passenger  ticket,  see  1  Page  on  Contracts,  sec.  31;  5  Am.  &  Eng. 
Encyc,  p.  612;  also  vol.  28,  pp.  155,  174;  The  Majestic,  166  U.  S.,  375, 
overruling  the  same  case  in  23  L.  R.  A.,  746;  Trezona  v.  R.  R.,  43  L.  R. 
A.,  136;  Watson  v.  R.  R.,  49  L.  R.  A.,  454;  Fonseca  v.  Steamship  Co., 
12  L.  R.  A.,  340,  153  Mass.,  553,  27  N.  E.,  665,  25  A.  S.  R.,  660;  McMillan 


34  FORMATION    OF    CONTRACT. 

v.  R.  R.,  16  Mich.,  79,  93  A.  D.,  208;  St.  L.  R.  R.,  v.  Weakly,  50  Ark., 
397,  7  A.  S.  R.,  104;  Melody  v.  Gr.  N.  R.  R.,  25  S.  Dak.,  606,  127  N.  W., 
543,  Ann.  Cas.,  1912C — 727,  6  R.  C.  L.,  627;  for  condition  in  mileage 
book,  see  Mason  v.  R.  R.,  159—183;  Harvey  v.  R.  R.,  153—567;  Dorsett 
v.  R.  R..  156—441;  Hallman  v.  R.  R.  (N.  C),  85  S.  E.,  298. 

3.  Acceptance    necessary. 

(16)   GREEN  v.  GROCERY  CO., 

153   N.    C,  409,   69   S.    E.,  412—1910. 

The  plaintiff  seeks  to  recover  $400,  paid  to  defendants  in  nego- 
tiations in  regard  to  renting  a  hotel.  In  his  letter  of  remittance 
the  plaintiff  says  :  "On  receipt  of  draft  wire  me  .  .  .  confirm- 
ing deal."  The  plaintiff  received  no  telegram  confirming  deal,  and 
none  was  ever  sent.  From  a  judgment  against  him  the  plaintiff 
appealed.     New  trial. 

Brown,  J.  .  .  .  The  plaintiff  had  a  right  to  demand  such  con- 
firmation and  in  the  manner  required  by  the  letter  containing  the 
remittance.  Until  such  confirmation  was  sent  by  wire  there  was 
no  completed  contract,  and  the  plaintiff  had  a  right  to  demand  the 
money  back.  ...  As  is  said  by  the  Supreme  Court  of  the  United 
States  in  Eliason  v.  Henshaw,  17  U.  S.,  288:  "It  is  an  unde- 
niable principle  of  the  law  of  contracts  that  an  offer  of  a  bargain 
by  one  person  to  another  imposes  no  obligation  upon  the  former 
until  it  is  accepted  by  the  latter,  according  to  the  terms  in  which 
the  offer  was  made.  Any  qualification  of  or  departure  from 
those  terms  invalidates  the  offer,  unless  the  same  be  agreed  to  by 
the  person  who  made  it.  Until  the  terms  of  agreement  have  re- 
ceived the  assent  of  both  parties,  the  negotiation  is  open,  and  im- 
poses no  obligation  upon  either."  Clark  Cont.,  36-39 ;  Cozart  v. 
Herndon,  114  N.  C,  252;  1  Wharton  Cont.,  4;  Gregory  v.  Bul- 
lock, 120  N.  C,  263;  7  A.  &  E.  Enc,  138.  There  being  no  evi- 
dence that  the  defendants  had  accepted  and  confirmed  by  wire  the 
proposal  to  lease,  as  required  by  the  letter  transmitting  the  $400, 
the  plaintiff  had  the  right  to  withdraw  and  to  recover  that  sum 
with  interest  thereon  as  money  had  and  received  to  his  use.    .    .    . 

New  trial. 


OFFER    AND    ACCEPTANCE.  35 

4.  Acceptance  must  be  communicated. 
1.   IN   GENERAL. 

(17)  COZART  v.  HERN  DON, 
114  N.  C,  252,  19  S.  E.,  158—1894. 

This  is  a  civil  action  originally  brought  for  specific  performance 
of  a  contract  for  the  purchase  of  land,  and  reported  in  113  N.  C, 
294,  as  Cozart  v.  West  Oxford  Land  Co.  For  the  present  ques- 
tion the  facts  are  sufficiently  stated  in  the  opinion. 

Shepherd,  C.  J.  The  general  purpose  of  this  action  is  stated 
in  the  opinion  in  this  case  when  it  was  before  us  on  a  former 
occasion  (113  N.  C,  294),  but  in  the  present  appeal  the  only  ques- 
tion involved  is  whether  the  defendant,  H.  C.  Herndon,  was  a 
stockholder  in  the  codefendant  company.  His  Honor  instructed 
the  jury  that  there  was  no  sufficient  evidence  to  establish  such  a 
relationship,  and  it  is  the  correctness  of  this  ruling  which  is  alone 
presented  for  review. 

No  stock  was  issued  to  said  Herndon,  nor  does  it  appear  that 
his  name  ever  appeared  upon  the  books  of  the  company,  nor  that 
he  ever  held  himself  out,  nor  was,  with  his  knowledge,  held  out  as 
a  stockholder.  Thompson  on  Stockholders,  section  174.  The  sec- 
retary, treasurer  and  the  said  Herndon  testified  that  the  latter  was 
not  a  stockholder,  and  it  can  not  seriously  be  insisted  that  the  mere 
suggestion  of  Herndon  to  James  T.  Cozart  that  he  and  his  brother 
and  brother-in-law  ought  to  take  stock  in  the  company  was  in  it- 
self sufficient  evidence  to  sustain  the  contention  of  the  plaintiffs. 
The  case,  therefore,  must  be  determined  upon  the  effect  of  the 
correspondence  between  the  company  and  the  said  Herndon.  On 
the  15th  of  June,  1891,  the  company,  through  its  president,  ad- 
dressed a  letter  to  Herndon  which  contains  the  following  language : 

"We  have  considered  the  question  as  to  the  purchase  of  your 
fifty  (50)  acres,  and  while  we  think  $300  an  acre  rather  high  in 
view  of  the  fact  that  under  the  arrangements  suggested  in  the  first 
of  this  letter  we  have  only  placed  a  value  of  $200  per  acre  on  the 
vacant  Cozart  property,  yet  we  have  decided  to  take  the  place  for 
fifteen  thousand  dollars  of  the  stock  of  the  company,  feeling  that 
our  joint  interest  will  be  promoted  by  concert  of  action.  As  sev- 
eral of  our  directors  are  from  a  distance  we  shall  be  glad  to  have 
a  response  from  this  at  once." 

On  the  same  day  Herndon  replied  as  follows : 

"As  to  my  land  adjoining  the  Philpott  property,  I  think  your 
company  could  very  well  afford  to  give  me  $20,000  of  your  stock 


36  FORMATION    OF    CONTRACT. 

for  it.  It  would  probably  have  a  better  effect  here  and  also 
abroad  than  $15,000.  If,  however,  you  fail  to  take  that  view  of 
it,  I  will  accept  the  offer  of  $15,000  with  this  consideration,  how- 
ever, that  I  reserve,  in  making  this  transaction,  all  and  every  kind 
of  wood  and  timber  on  the  place  for  my  own  exclusive  use  and 
benefit." 

At  a  meeting  of  the  directors  on  the  same  day  the  following 
proceedings  were  had,  as  appears  upon  the  minutes : 

"On  motion,  the  same  (that  is  the  proposition  of  Herndon)  was 
accepted,  and  the  treasurer  directed  to  deliver  stock  upon  receipt 
of  deed,  title  being  clear." 

The  defendant  Herndon  testified  "that  the  condition  upon  which 
he  proposed  to  sell  to  defendant  company  certain  land  (as  set 
forth  in  his  letter)  was  never  accepted  by  said  company,  and  that 
he  withdrew  his  proposition  to  sell  to  said  company  about  the  18th 
of  March,  1892." 

It  does  not  appear  that  the  resolution  of  the  board  accepting  the 
proposition  was  ever  communicated  to  said  defendant,  nor  does  it 
appear,  as  we  have  stated,  that  the  stock  was  delivered,  nor  that 
title  was  made,  nor,  indeed,  that  any  further  action  whatever  was 
taken  by  either  party  in  pursuance  of  the  said  correspondence. 

It  is  well  settled  that  in  order  to  constitute  a  contract  there 
must  be  "a  proposal  squarely  assented  to."  If  the  proposal  be  as- 
sented to  with  a  qualification,  then  the  qualification  must  go  back 
to  the  proposer  for  his  adoption,  amendment  or  rejection.  If  the 
acceptance  be  not  unqualified,  or  go  to  the  actual  thing  proposed, 
then  there  is  no  binding  contract.  A  proposal  to  accept  or  accept- 
ance based  upon  terms  varying  from  those  offered  is  a  rejection 
of  the  offer.  1  Wharton  on  Con.,  4.  "The  respondent  is  at  liberty 
to  accept  wholly,  or  reject  wholly,  but  one  of  these  things  he  must 
do;  for  if  he  answer  not  rejecting,  but  proposing  to  accept  under 
some  modification,  this  is  a  rejection  of  the  offer."  1  Parson  on 
Con.,  476.  "It  amounts  to  a  counter-proposal,  and  this  must  be 
accepted  and  its  acceptance  communicated  to  the  proposer,  other- 
wise there  is  no  contract."     Pollock  on  Con.,  10. 

Applying  these  general  principles  to  the  facts  before  us,  it  is 
plain  that  there  was  no  contract  by  which  the  defendant,  Herndon, 
became  a  stockholder.  The  proposal  of  the  company  was  to  pur- 
chase the  land  for  $15,000  of  its  stock.  Herndon's  answer  is  not 
an  acceptance,  but  a  proposal  to  accept  with  the  very  important 
qualification  that  he  is  to  reserve  "all  and  every  kind  of  wood  and 
timber  on  the  place  for  his  own  exclusive  use  and  benefit."  The 
acceptance  of  this  proposal  was  never  communicated  to  him,  and 
after  many  months  the  proposal  was  revoked  without  objection,  it 
seems,  by  the  company. 


OFFER    AND    ACCEPTANCE.  37 

We  think  His  Honor  was  correct  in  holding  that  there  was  no 
evidence  that  the  defendant,  Herndon,  was  a  stockholder. 

Affirmed. 

2.    GUARANTY. 

(18)   COWAN  v.  ROBERTS, 
134  N.  C,  415,  46  S.  E,  979,  65  L.  R.  A,  729,  101  A.  S.  R.,  845—1904. 

This  was  a  civil  action  brought  by  Cowan,  AfcClung  &  Co. 
against  W.  S.  Roberts  to  recover  the  sum  of  $2,000  alleged  to  be 
due  by  defendant  on  a  guaranty. 

The  firm  of  Roberts  Brothers  owed  the  plaintiff  the  sum  of 
$1,742  for  goods  sold,  and  they  wishing  to  purchase  more,  the 
plaintiff  refused  to  sell  to  them  unless  they  secured  by  guaranty 
the  amount  then  due  and  what  should  become  due  afterward.  The 
defendant  then  signed  the  following  paper: 

"Knoxville,  Tenn.,  April  8,  1899. 
"I  hereby  guarantee  to  Cowan,  McClung  &  Co.  any  debts  which 
Roberts  Bros,  now  owe,  or  may  owe  in  the  future,  to  the  extent 
of  $2,000.  This  obligation  is  to  remain  in  full  force  until  the  debt 
now  due  Cowan,  McClung  &  Co.  is  fully  discharged  and  this 
agreement  annulled  in  writing. 

"(Signed)  W.  S.  Roberts." 

This  was  delivered  to  the  plaintiffs,  and  they  furnished  Roberts 
Bros,  goods  to  the  amount  of  $475.  The  firm  became  entirely  in- 
solvent, failed  to  pay  either  amount,  and  were  declared  bankrupts. 
Plaintiffs  notified  defendant  of  such  default,  and  upon  his  refusal 
to  pay,  brought  this  action.  The  defendant  claimed  that  he  had 
signed  the  writing  with  the  understanding  that  it  was  also  to  be 
signed  by  one  J.  J.  Roberts,  a  third  person,  and  Roberts  Bros,  had 
failed  to  get  this  signature;  that  he  then  directed  Roberts  Bros,  to 
have  his  name  erased,  and  also  wrote  the  plaintiff  that  he  would 
not  be  responsible  longer.  This  letter  was  on  July  7,  and  the 
goods  had  already  been  furnished,  and  plaintiffs  claimed  that  they 
were  furnished  on  this  guaranty. 

At  the  close  of  the  testimony  the  court  intimated  that  it  would 
charge  the  jury  to  find  the  issue  for  the  defendant,  and  the  plain- 
tiff submitted  to  a  nonsuit  and  appealed. 

Walker,  J.  The  defendant's  counsel,  in  his  able  argument  be- 
fore us,  relied  upon  three  grounds  of  defense:  1.  That  there  was 
no  evidence  that  the  plaintiffs  had  accepted  the  guaranty  and  noti- 
fied the  defendant  of  their  acceptance.  2.  That  there  was  no  con- 
sideration to  support  the  guaranty  as  to  the  debt  already  due  by 


38  FORMATION    OF    CONTRACT. 

Roberts  Bros,  to  the  plaintiffs  amounting  to  $1,742.50.  3.  That 
the  guaranty  was  given  upon  a  condition  which  was  never  per- 
formed, and  that  it  is  therefore  void  even  in  the  hands  of  the 
plaintiffs. 

A  guaranty   is  a  promise  to  answer   for  the  payment  of   some 
debt,  or  the  performance  of  some  duty,  in  case  of  the  failure  of 
another  person  who  is  himself  in  the  first  instance  liable  to  such 
payment    or    performance.      Carpenter    v.    Wall,    20    N.    C,    144. 
There  is  a  well-defined  distinction  between  a  guaranty  of  payment 
and  a  guaranty  for  the  collection  of  a  debt,  the  former  being  an 
absolute  promise  to  pay  the  debt  at  maturity  if   not  paid  by  the 
principal  debtor,  when  the  guarantee  may  bring  an  action  at  once 
against  the  guarantor,  and  the  latter  being  a  promise  to  pay  the 
debt  upon  condition  that  the  guarantee  diligently  prosecuted  the 
principal  debtor  for  the  recovery  of  the  debt  without  success.  Jones 
v.  Ashford,  79  N.  C,  172;  Jenkins  v.  Wilkinson,  107  N.  C,  707, 
22   Am.    St.   Rep.,   911.      The   guaranty   may   also   be   absolute   in 
form,  or  one  which  binds  the  guarantor  to  pay,  conditionally,  or, 
at  all  events,— upon  the  default  of  the  principal,  or  it  may  be  in 
the  form  merely  of  an  offer  to  become  bound  upon  the  default  of 
the  principal.     In  the  former  case,  that  is,  where  there  is  an  abso- 
lute guaranty   or   an   unconditional   promise   to   indemnify   against 
loss  by  the  principal's  default,  no  notice  of  acceptance  by  the  guar- 
antee  is   required,  the  liability  of   the  guarantor  being  fixed  and 
determined  by  the  ordinary  rules  in  the  law  of  contracts.     In  the 
latter  case,  when  the  transaction  takes  the  form  of  an  offer  merely 
to  become  responsible  for  the  principal,  notice  of  acceptance  of  the 
offer   is   of   course   necessary   in   order   to   charge   the   party,    who 
makes  the  offer,  as  guarantor,  and  this  is  so  because  the  minds  of 
the  parties  have  not  met,  there  is  no  aggregatio  mentium  until  the 
offer  is  accepted.     There  is  a  well-recognized  distinction,  therefore, 
between  an  offer  or  proposal  to  guarantee  and  a  direct  promise  of 
guarantee.     The   former  requires  in   some  cases  notice  of   accept- 
ance, while  the  latter  does  not.     When  the  offer  to  guarantee  is 
absolute  and  contains   in   itself   no   intimation   of   a   desire   for,   or 
expectation  of,  specific  notice  of  acceptance,   it   may  be  supposed 
that  the  offerer  has  a  reasonable  knowledge  that  his  guaranty  will 
be  accepted  and  acted  upon,  unless  he  is  informed  to  the  contrary. 
2   ['arsons  Cont.   (8  Ed.),  ch.  2,  sec.  4,  and  notes,  where  the  sub- 
ject is   fully  discussed.     Tt  is  said  that   if  the  party  distinctly  and 
absolutely  guarantees  a  certain  line  of  credit,  it  presupposes  some 
sort  of  a  request   for  a  guaranty,  emanating  from  the  guarantee, 
and  for  this  reason  no  formal  acceptance  by  the  guarantee  is  nec- 
essary; but  if  it  be  only  a  proposition  to  guarantee  the  credits,  and 
not    a   positive  promise  to  guarantee  them,  the  acceptance  of  the 


OFFER    AND    ACCEPTANCE. 


39 


proposition  must,  in  some  way,  and  within  a  reasonable  time,  be 
communicated  before  the  guarantor  can  be  held  liable  on  it.  Tied- 
man  on  Com.  Paper,  sec.  420. 

In  our  case  the  guaranty  is  a  direct  and  unconditional  promise 
to  answer  for  the  default  of  the  principal  to  the  amount  of  $2,000. 
The  words  of  the  contract  are  in  prcsenti,  "I  do  hereby  guaran- 
tee,' and  superadded  are  the  words,  "This  obligation  to  remain  in 
full  force."  .  .  .  Language  could  not  be  stronger  to  express 
the  intention  to  become  liable  at  once  without  any  expectation  of 
notice  that  the  plaintiffs  will  accept  the  guaranty.  It  was  not  an 
offer,  nor  did  it  imply  an  offer  merely,  but  it  was  in  itself  a  com- 
plete and  binding  promise  to  guarantee,  and  needed  only  the  sale 
of  the  goods  by  the  plaintiff  to  make  it  otherwise  effectual.  1 
Parsons,  supra,  pp.  466.  467. 

We  can  not  distinguish  this  case  from  Strauss  v.  Beardsley,  79 
N.  C,  59,  where  the  court  says:  "If  the  undertaking  be  to  guar- 
antee the  contract  which  may  be  made,  the  obligation  is  not  col- 
lateral and  contingent,  but  absolute  and  unconditional,  and  no  no- 
tice is  necessary.  .  .  .  The  undertaking  is  to  pay  a  certain  sum, 
and  by  the  terms  of  the  condition  it  is  discharged  only  when  the 
goods  have  been  delivered  under  its  provisions,  by  actual  payment 
of  the  purchase  price.  If  the  goods  are  delivered,  the  contract 
is  to  pay  for  them,  and  a  compliance  with  this  condition  is  the 
only  means  of  discharging  the  obligation.  It  thus  became  the  duty 
of  "the  intestate  and  his  associates  to  ascertain  for  themselves  if 
the  plaintiffs  furnished  the  goods  and  that  they  were  paid  for,  and 
no  notice  or  demand  was  necessary  to  charge  them  with  the  debt." 
See  also  Walker  v.  Brinkley,  131  N.  C,  17. 

In  Williams  v.  Collins,  4  N.  C,  382,  this  court  drew  the  distinc- 
tion between  a  guaranty  that  a  certain  person  will  be  able  to  com- 
ply with  the  proposed  contract  and  one  wherein  the  promise  is  that 
he  shall  comply.  In  the  latter  case,  which  is  ours,  the  court  held 
that  the  guarantor  "to  all  legal  consequences,  became  pledged  abso- 
lutely to  the  same  extent  as  the  principal  -debtor  was  bound,  as 
soon  as  the  guarantee  parted  with  his  property."  In  Shewell  v. 
Knox.  12  N.  C,  404,  all  the  judges  agreed  that  if  the  guaranty  is 
absolute  and  addressed  to  an  individual,  no  notice  of  acceptance  is 
necessary,  and  one  of  the  judges  held  that  it  was  not  even  neces- 
sary when  a  letter  of  credit  was  given  under  the  circumstances  of 
that  case.  The  general  principle  as  to  when  notice  of  acceptance 
of  an  offer  to  contract  becomes  necessary  is  considered  in  the  cases 
of  Crook  v.  Cowan,  64  N.  C.  743,  and  Ober  v.  Smith,  78  N.  C„ 
313.  The  question  as  to  notice  of  acceptance  in  cases  of  guaranty 
is  very  ably  and  exhaustively  discussed,  with  a  full  review  of  the 
English  and  American  authorities,  in  the  case  of  Wilcox  v.  Draper, 


40  FORMATION    OF    CONTRACT. 

12  Neb.,  138,  41  Am.  Rep.,  763,  and  the  conclusion  is  reached  that 
when  there  is  a  direct  promise  of  guaranty  no  notice  of  accept- 
ance is  required.  Allen  v.  Peck,  3  Cush.,  at  p.  242 ;  Powers  v. 
Bumcratz,  12  Ohio  St.,  273;  Bank  v.  Coster,  3  N.  Y.,  212,  53 
Am.  Dec,  280;  Bank  v.  Phelps,  86  N.  Y.,  484;  2  Addison  Cont. 
(8  Ed.),  p.  84  (star  page  651).  The  case  of  Gregory  v.  Bullock, 
120  N.  C,  260,  does  not  apply,  as  the  court  held  there  was  no  con- 
tract at  all  in  that  case,  and  what  is  said  about  the  guaranty  was 
with  reference  to  the  particular  facts  under  consideration,  from 
which  it  appeared  that  there  was  only  "a  proposal  based  upon  an 
uncertain  event."  The  guaranty  in  this  case  as  to  both  the  past 
and  future  indebtedness  is  evidenced  by  one  and  the  same  instru- 
ment and  is  supported  by  one  and  the  same  consideration,  and  we 
do  not  therefore  see  why  the  law  applicable  to  the  one  should  not 
also  determine  the  liability  in  the  case  of  the  other. 

We  are  of  the  opinion  that  the  testimony  of  the  defendant  as  to 
his  interviews  and  communications  with  the  principals,  Roberts 
Bros.,  and  his  subsequent  promise  to  pay  for  the  goods  after  the 
guaranty  had  been  executed  by  him,  furnishes  some  evidence  to 
show  that  he  knew  the  guaranty  had  been  delivered  to  the  plain- 
tiffs and  that  they  were  acting  upon  it,  or  intended  to  do  so. 

There  was  a  sufficient  consideration  to  support  the  guaranty  as 
to  the  debt  already  due.  The  agreement  as  to  the  existing  and  the 
future  indebtedness  was  indivisible,  and  was  based  upon  one  and 
the  same  consideration,  which  was  that  the  plaintiffs  should  sell 
more  goods  to  the  principals  to  enable  them  to  replenish  their  stock, 
which  he  did.  It  is  not  necessary  that  the  consideration  should  be 
full  or  adequate,  as  in  the  case  of  bona  fide  purchasers  for  value. 
If  there  is  any  legal  consideration  it  is  sufficient.  The  promise  of 
the  guarantee  to  furnish  the  goods  was  such  a  consideration  and 
supports  the  contract  of  guaranty.     1  Parsons,  supra,  pp.  466,  467. 

The  third  ground  of  defense  is  not  tenable.  If  the  written  guar- 
anty was  given  to  the  principals  upon  condition  that  it  should  not 
be  delivered  to  the  plaintiffs  until  it  was  signed  by  J.  J.  Roberts 
and  they  delivered  it  in  violation  of  the  condition,  and,  thus,  as  is 
said  in  the  case,  practiced  a  fraud  upon  the  defendant,  the  defend- 
ant is  bound,  as  the  plaintiffs  did  not  participate  in  the  fraud 
alleged,  nor  is  it  shown  that  they  had  notice  of  it.  The  liability  of 
the  defendant  is  founded  upon  the  principle  that  where  one  of  two 
persons  must  suffer  loss  by  the  misconduct  or  fraud  of  a  third 
person,  or  by  his  breach  of  confidence,  as  in  our  case,  the  loss 
should  fall  upon  him  who  first  reposed  the  confidence  or  who  by 
his  negligence  made  it  possible  for  the  loss  to  occur,  rather  than 
on  an  innocent  third  person.  The  liability  of  the  defendant  in  this 
respect  is  fully  established  by  the  case  of  Vass  v.  Riddick,  89  N. 


OFFER    AND    ACCEPTANCE.  41 

C,  6.     See  also  Bank  v.  Hunt,  124  N.  C,  171 ;  State  v.  Lewis,  73 
N.  C,  141,  21  Am.  Rep.,  461. 

The  plaintiffs  agreed  to  sell  the  goods  to  the  principals  not  upon 
the  single  consideration  that  the  defendant  would  guaranty  the 
payment  of  the  price,  but  upon  the  further  and  additional  consid- 
eration that  he  would  guarantee  also  the  payment  of  the  existing 
indebtedness.  He  would  not  have  sold  but  for  the  last  considera- 
tion, and  therefore  by  reason  of  the  guaranty  he  has  been  induced 
to  change  his  position,  and  should  the  guaranty,  as  to  that  indebt- 
edness, be  declared  invalid,  he  will  be  prejudiced,  as  he  no  doubt 
would  have  taken  immediate  steps  to  collect  his  claim  if  the  guar- 
anty had  not  been  given.  It  will  be  impossible  for  him  now  to 
save  himself  for  the  reason  that  the  principals  have  become  insol- 
vent and  have  been  adjudged  bankrupts.  We  have  said  this  much, 
though  we  do  not  concede  that,  in  order  to  charge  the  defendant 
on  the  guaranty,  it  is  necessary  to  show  a  change  in  the  guaran- 
tee's position  by  which  he  may  be  prejudiced  if  the  guaranty  is 
held  to  be  void. 

We  have  not  commented  upon  the  evidence  in  this  case,  from 
which  it  appears  that  the  defendant  knew,  on  the  day  after  the 
guaranty  was  given,  that  it  had  been  sent  to  the  plaintiffs  and  had 
not  been  signed  by  J.  J.  Roberts,  and  knowing  this  fact,  and  "mis- 
trusting" the  principals,  as  he  did,  according  to  his  own  testimony, 
he  delayed  for  nearly  three  months  to  notify  the  plaintiffs  of  the 
alleged  condition  annexed  to  the  guaranty,  and  in  the  meantime 
they  had  sold  the  goods.  When  they  refused  to  surrender  their 
security,  he  finally  agreed  to  pay  the  bill  for  the  goods  sold  after 
the  date  of  the  guaranty.  This  was  a  clear  case  of  negligence  on 
his  part,  and  the  consequences  of  this  negligence  must  be  visited 
upon  him  and  must  not  be  borne  by  the  plaintiffs,  who  are  inno- 
cent parties.  As  said  in  State  v.  Lewis,  supra,  the  defendant  acted 
upon  the  assurance  that  another  would  do  an  act  which  he  knew 
might  be  defeated  or  prevented  by  various  accidents,  and  he  must 
therefore  take  the  risk  of  such  assurance  being  fulfilled.  He  con- 
fided in  the  principals,  Roberts  Bros.,  and  the  condition  that  J.  J. 
Roberts  should  sign  with  him  was  communicated  to  them  alone. 
He  failed  to  use  ordinary  precaution  either  to  protect  himself  or 
to  protect  the  guarantee.  If  the  defendant,  in  any  phase  of  the 
testimony,  can  be  regarded  as  an  innocent  person  in  this  transac- 
tion, it  yet  remains  as  an  inflexible  rule  of  the  law  that  where  one 
of  two  innocent  persons  must  suffer,  he,  who  has  enabled  a  third 
person  to  occasion  the  loss,  must  sustain  it.  This  is  said  to  be  a 
doctrine  of  general  application,  and  is  a  most  just  and  reasonable 
one.  State  v.  Lewis,  supra.  To  permit  the  defendant  to  avail 
himself  of  his  defense  to  this  action  would  also  contravene  that 


42  FORMATION    OF    CONTRACT. 

other  just  and  inflexible  maxim  of  the  law  that  no  man  shall  take 
any  advantage  of  his  own  wrong. 

No  question  arises  in  this  case  as  to  diligence  on  the  part  of  the 
guarantee  in  collecting  the  debt  from  the  principal,  as  this  is  a 
guaranty  of  payment  and  not  for  collection,  and,  besides,  the  bur- 
den of  proof  in  this  respect  would  be  on  the  defendant.  The  case 
shows  that  notice  of  the  default  of  the  principal  was  given,  and 
demand  made  upon  the  guarantor  before  the  suit  was  commenced. 

Our  conclusion  is  that  there  was  error  in  the  intimation  of 
opinion  by  the  court  adverse  to  the  plaintiffs,  by  which  they  were 
driven  to  a  nonsuit.  The  judgment  must  therefore  be  set  aside 
and  a  new  trial  awarded. 

New  trial.     (Montgomery,  J.,  dissents  in  part.) 

Definition  of  guaranty  as  given  above  in  Carpenter  v.  Wall,  20 — 279. 
Here  the  defendant  refused  to  endorse  notes,  but  said  "they  are  good." 
and  it  was  held  not  to  be  a  guaranty.  See  also  Andrews  v.  Pope,  126 
—M2. 

Absolute  guaranty. — A  guaranty  of  payment  is  absolute  to  pay  the 
debt  at  maturity,  if  not  paid  by  the  principal,  and  the  guarantee  may 
sue  the  guarantor  at  once  if  not  paid.  Williams  v.  Springs,  29 — 384; 
Ashford  v.  Robinson,  30 — 414;  Farrar  v.  Respass,  33—170;  Strauss  v. 
Beardsley,  79 — 59;  Leach  v.  Fleming,  85 — 447;  Jenkins  v.  Wilkinson, 
107—707;  Hutchins  v.  Bank,  130—285;  Walker  v.  Brinkley,  131—17; 
Vorhees    v.    Porter,    134 — 591;    Mudge    v.    Varner,    146 — 147. 

Conditional  guaranty. — A  guaranty  of  collection  of  a  debt  is  condi- 
tional and  requires  the  guarantee  to  be  diligent  in  prosecuting  the 
principal.  Ward  v.  Ely,  12 — 372;  Shewell  v.  Knox,  12 — 404;  Tones  v. 
Ashford,  79—172;   Everett  v.   Sykes,   167—600. 

Guarantor,  surety  and  endorser. — A  surety  is  bound  with  his  principal 
as  an  original  promisor,  and  may  be  sued  with  him;  so  may  an  en- 
dorser; but  a  guarantor  makes  his  own  special  contract  and  is  not 
a  party  to  the  debt  guaranteed.  A  surety  under  seal  may  be  discharged 
in  three  years,  while  a  guarantor  would  be  held  for  ten  years.  Coleman 
v.  Fuller,  105—328;  Carter  v.  McGehee.  61 — 431;  Andrews  v.  Pope, 
126—472;    Rouse   v.   Wooten,    140—557. 

Notice  of  acceptance. — In  an  offer  of  guaranty,  a  conditional  guaranty, 
notice  of  acceptance  is  an  essential  part  of  the  contract,  and  must  be 
given  within  a  reasonable  time.  Shewell  v.  Knox,  12—404;  Grice  v. 
Ricks,  14—62;  Adcock  v.  Fleming,  19 — 225;  Reynolds  v.  Magness, 
24—26;  Lewis  v.  Bradley,  24—303;  Spencer  v.  Carter,  49—287;  Cox  v. 
Brower,  51 — 100;  Strauss  v.  Beardsley,  79 — 59;  Gregory  v.  Bullock, 
120 — 260.  Such  notice  is  not  required  in  an  absolute  guaranty.  Strauss 
v.  Beardsley,  79—59;  Walker  v.  Brinkley.  131—17;  Wright  v.  Griffith, 
121  Ind.,  478,  23  N.  E.,  281;  Thompson  v.  Glover,  78  Ky,  193,  39  A.  R., 
2X1;  Leering  &  Co.  v.  Martell,  21  S.  Dak.,  159,  110  N.  W.  86.  16  L. 
R.  A.  (N.  S.),  352,  and  subject  note. 

Notice  of  default. — Notice  that  the  guarantee  has  failed  to  yet  the 
debt  from  the  principal  is  required,  unless  the  facts  are  within  the 
knowledge  of  the  guarantor  or  no  loss  has  resulted  from  such  failure 
by  reason  of  insolvency,  etc.  Lewis  v.  Bradley,  24 — 303;  Baker  v. 
Saunders,  28—380;  Salem  Mfg.  Co.  v.  Brower,  49—429;  Cox  v.  Brown, 
51—100:  Sutton  v.  Owen,  65—123;  Myer  v.  Reedy,  115—538;  Sullivan  v. 
Field,  118 — 358.  In  case  of  an  endorser  notice  of  dishonor  must  be 
given  strictly,  or  the  endorser  is  discharged;  but  a  guarantor  is  dis- 
charged only  so  far  as  he  can  show  loss.  Ashford  v.  Robinson,  30 — 
114;  Farrar  v.  Respass,  33 — 170.  Contribution  between  sureties  grows 
out   of  implied   contract   and   is  not   a  guaranty.     Sherrod   v.    Woodard, 


OFFER    AND    ACCEPTANCE.  43 

15 — 360;  Reynolds  v.  Magness,  24 — 26;  Heyman  v.  Dooley,  77  Md.,   162, 
26  Atl.,  117,  20  L.  R.  A.,  257. 

Diligence. — The  guarantee  must  use  reasonable  diligence  to  collect 
■the  debt  from  the  principal  before  resorting  to  the  guarantor,  unless  it 
appear  that  such  action  did  not  result  in  loss  to  the  guarantor.  Williams 
v  Collins,  6—47;  Towne  v.  Farrar,  9—163;  Battle  v.  Little,  12—381; 
Beeker  v.  Saunders,  28—380;  Spencer  v.  Carter,  49—287;  Jones  v.  Ash- 
ford  79—172;  Shewell  v.  Knox,  12 — 404;  Eason  v.  Dixon,  19—78;  Cox 
v.  Brown,  51—100;  Myer  v.  Reedy,  115—538;  Sullivan  v.  Field,  118—358. 
Laches  may  be  waived,  Ashford  v.  Robinson,  30 — 114,  and  does  not 
apply   to   absolute   guaranty.      Walker   v.    Brinkley,    131 — 17. 

Consideration. — A  consideration  is  necessary  in  a  guaranty,  but  the 
original  consideration  is  sufficient,  if  the  guaranty  is  made  at  the  same 
time  with  the  original  debt;  otherwise  a  new  consideration  is  required. 
Green  v.  Thornton,  49—230;  Carter  v.  McGehee,  61—431;  Supply  Co.  v. 
Finch,    147—106. 

A  continuing  guaranty  may  be  revoked  by  giving  notice.  Strauss  v. 
Beardsley,  79—59;  Rouss  v.  Krauss,  126—667;  Mfg.  Co.  y.  Draughan, 
121—88.  A  mere  recommendation  or  expression  of  opinion  is  not  a 
guaranty.      Hughes   v.    Warehouse    Co.,    139 — 158. 

As  to  whether  such  contracts  are  within  the  Statute  of  Frauds,  see 
post. 

For  general  discussion  of  the  subject  of  guaranty,  see  2  Parsons  on 
Contracts,  pp.3-31;  Harriman  on  Cont.,  sees.  146-149:  20  Cyc,  1392; 
14  Am.  &  Eng.  Encyc,  1128;  4  L.  R.  A.,  343,  and  notes;  Brandt  on 
Guaranty  and  Suretyship,  sec.  205  et  seq.;  1  Page  on  Cant.,  sec.  53;  2 
Pars.    Cont.,  3   et  scq. 

5.  Manner    of    acceptance. 
1.    BY    CORRESPONDENCE. 

(19)  WHEAT  et  al.}  Appellants,  v.  CROSS, 
31   Md.,  99,   1  A.   R.,  28—1869. 

Bartol,  C.  J.  This  suit  was  brought  by  the  appellee  (Cross) 
to  recover  the  price  of  a  horse  sold  to  the  appellants.  The  con- 
tract of  sale  was  made  by  correspondence  between  the  parties 
through  the  mails. 

The  facts  of  the  case,  so  far  as  it  is  material  to  state  them, 
were  as  follows :  On  the  23d  of  August,  1867,  the  defendants  re- 
ceived the  horse  into  their  possession,  to  be  sold  on  commission, 
at  that  time  apparently  sound  and  in  good  condition.  On  the  12th 
of  September,  1867,  they  addressed  a  letter  to  the  plaintiff,  stating 
that  the  horse  had  been  sick,  but  is  doing  well  at  this  time,  and 
offering  $140  for  him,  clear  of  all  expenses,  and  saying:  "You 
can  draw  on  us  at  sight  for  $140."  This  letter  was  received  on 
the  15th  or  16th  of  September;  on  the  16th,  the  plaintiff  signified 
his  acceptance  of  the  offer  by  drawing  on  the  defendants  for 
$140.  The  draft  was  sent  on  that  day,  and  on  the  17th,  the  de- 
fendants refusing  to  pay  the  draft,  it  was  protested.  On  the  16th 
of  September  the  defendants  addressed  a  letter  to  the  plaintiff, 
withdrawing  their  offer  of  the  12th,  stating  that  "when  they  wrote 


44  FORMATION    OF    CONTRACT. 

they  did  not  think  the  horse  was  so  bad,  but  since  it  had  turned 
out  to  be  'farcy,'  they  would  not  buy  it  at  any  price,"  and  direct- 
ing him  "not  to  draw  on  them  for  the  money ;  that  they  will  not 
pay  the  draft  until  they  see  how  the  horse  gets."  This  letter  was 
not  received  by  the  plaintiff  till  after  he  had  accepted  the  offer 
contained  in  the  letter  of  the  12th,  by  sending  the  draft. 

In  the  argument  of  the  case  two  positions  have  been  taken  by 
the  defense.  1.  That  there  was  not  such  mutual  assent  between 
the  parties  as  to  constitute  a  binding  contract.  2.  That  the  offer 
by  the  defendants  was  made  through  mistake  of  a  material  fact 
as  to  the  condition  of  the  horse,  and  the  nature  of  the  disease 
under  which  it  was  suffering;  and  was  withdrawn  as  soon  as  the 
mistake  was  discovered,  and  the  acceptance  thereof  was  not  bind- 
ing upon  them. 

On  the  first  question  we  consider  the  law  well  settled,  that 
where  the  parties  are  at  a  distance  from  each  other,  and  treat  by 
correspondence  through  the  post,  an  offer  made  by  one  is  a  con- 
tinuing offer  until  it  is  received,  and  its  acceptance  then  completes 
the  aggregatio  mentium  necessary  to  make  a  binding  bargain.  The 
bargain  is  complete  as  soon  as  the  letter  is  sent  containing  notice 
of  acceptance.  This  rule  applies  where  the  offer  and  acceptance 
are  unconditional.  The  offer  may  be  withdrawn,  and  the  with- 
drawal thereof  is  effectual  so  soon  as  the  notice  thereof  reaches 
the  other  party;  but  if  before  that  time  the  offer  is  accepted,  the 
party  making  the  offer  is  bound,  and  the  withdrawal  thereafter  is 
too  late. 

In  this  case  it  appears  the  defendants'  letter  of  withdrawal  was 
sent  on  the  same  day  on  which  the  notice  of  the  plaintiff's  accept- 
ance of  their  previous  offer  was  transmitted,  and  it  has  been  ar- 
gued that  the  onus  is  on  the  plaintiff  to  show  that  the  sending 
of  the  acceptance  preceded  the  sending  of  the  withdrawal.  This 
position  is  not  correct ;  it  is  quite  immaterial  to  inquire  whether 
the  defendants'  letter  of  the  16th,  or  the  draft  of  the  same  date, 
was  first  sent.  Until  the  notice  of  the  withdrawal  of  the  offer 
actually  reached  the  plaintiff,  the  offer  was  continuing,  and  the 
acceptance  thereof  completed  the  contract. 

This  point  was  expressly  decided  in  Tayloe  v.  Merchants'  Fire 
Ins.  Co.,  9  How.,  390.  That  was  a  case  arising  upon  an  insurance 
contract,  but  the  reasoning  of  the  court  on  this  question,  and  the 
principles  decided,  are  applicable  alike  to  all  contracts  made  by 
correspondence  between  parties  at  a  distance  from  each  other. 
There  the  terms  upon  which  the  company  was  willing  to  insure 
were  made  by  letter,  and  it  was  held  "that  the  contract  was  com- 
plete when  the  insured  placed  a  letter  in  the  postoffice  accepting 
the  terms."    The  court  says,  page  400,  "we  are  of  opinion  that  an 


OFFER    AND    ACCEPTANCE.  45 

offer  under  the  circumstances  stated,  prescribing  the  terms  of  in- 
surance, is  intended  and  is  to  be  deemed  a  valid  undertaking  on 
the  part  of  the  company  that  they  will  be  bound  according  to  the 
terms  tendered,  if  an  answer  is  transmitted  in  due  course  of  mail 
accepting  them,  and  that  it  can  not  be  withdrawn  unless  the  with- 
drawal reaches  the  party  to  whom  it  is  addressed,  before  his  letter 
of  reply  announcing  the  acceptance  has  been  transmitted.  .  .  .  The 
rule  we  have  stated  as  governing  the  present  case  is  supported  by 
many  adjudged  cases,  some  of  which  are  cited  in  the  appellee's 
brief.  Of  these  we  refer  to  Adams  v.  Lindsell,  1  B.  &  Aid.,  681 ; 
Mactier's  Admr.  v.  Frith,  6  Wend.,  103 ;  Dunlop  v.  Higgins,  1  H. 
L.  Cas.,  381. 

The  second  ground  of  defense  which  was  chiefly  relied  on  in 
the  argument,  that  the  defendants  made  the  offer  under  a  mistake 
of  fact  as  to  the  actual  condition  of  the  horse,  and  were  therefore 
not  bound  by  it,  is,  in  our  judgment,  altogether  untenable.  Such 
an  error  or  mistake  as  that  in  no  manner  affects  the  validity  of 
the  contract.  In  a  case  where  there  is  a  mutual  mistake  of  the 
parties  as  to  the  subject-matter  of  the  contract,  or  the  price  or 
terms,  going  to  show  the  want  of  a  consensus  ad  idem,  without 
which  no  contract  can  arise,  such  a  defense  may  be  made.  But 
here  the  mistake  was  in  relation  to  a  fact  wholly  collateral,  and 
not  affecting  the  essence  of  the  contract  itself.  The  vendees  can 
not  escape  from  the  obligation  of  their  contract  because  they  have 
been  mistaken  or  disappointed  in  the  quality  of  the  article  pur- 
chased. In  the  absence  of  a  warranty  the  principle  of  caveat 
emptor  applies,  and  the  buyer  takes  the  risk  of  quality  upon  him- 
self. Affirmed. 

(20)  UNION  NAT.  BANK  v.  MILLER  et  al, 

106  N.  C,  347,  11  S.  E.,  321,  19  A.  S.  R.,  538-1890. 

This  was  a  civil  action  to  recover  personal  property  alleged  to 
have  been  wrongfully  attached.  Judgment  for  defendants,  and 
plaintiff  appeals. 

Gregg,  Garvey  &  Co.,  of  Chicago,  had  shipped  certain  property 
to  Charlotte,  N.  C,  to  their  own  order,  but  intended  for  Miller  & 
Co.  They  drew  on  Miller  &  Co.  and  endorsed  the  draft  in  blank 
to  the  Union  National  Bank  in  Chicago,  and  the  drawee  failed  to 
pay  the  draft.  On  November  25  they  telegraphed  Van  Landing- 
ham,  in  Charlotte,  "Wire  best  offer  for  sacked  middlings,  No. 
2324,  now  at  Charlotte."  He  replied  November  26,  "Nineteen 
dollars  per  ton.  Must  have  reply  early  to-morrow."  The  firm 
replied  by  telegraph  November  27,  "Offer  accepted."  This  mes- 
sage was  received  at  Charlotte  at  4 :29  p.  m.  and  delivered  at  5  :34 


46  FORMATION    OF    CONTRACT. 

p.  m.     The  goods  were  attached  after  the  last  telegram  was  sent 
but  before  it  was  received. 

Shepherd,  J.  The  only  question  necessary  to  be  considered  in 
disposing  of  this  appeal  involves  the  correctness  of  His  Honor's 
instruction  that  the  title  to  the  property  had,  by  reason  of  the  tele- 
graphic correspondence,  passed  out  of  the  plaintiff,  and  into  Van 
Landingham,  at  the  time  of  the  levy  of  the  attachment.  The  prop- 
erty was  in  Charlotte,  in  the  possession  of  a  common  carrier,  and 
on  the  26th  of  November,  1888,  Van  Landingham  made  the  fol- 
lowing offer  by  telegraph  to  the  plaintiff's  agent  at  Chicago : 
"Charlotte,  N.  C.,  November  26,  1888.  To  Gregg,  Garvey  &  Co. 
Nineteen  dollars  per  ton.  Must  have  reply  early  to-morrow.  Jno. 
Van  Landingham."  On  the  next  day  at  5  :34  p.  m.,  Van  Landing- 
ham  received  a  telegram  from  the  said  agent  accepting  the  offer. 
This  latter  telegram  was  sent  from  Chicago  before,  but  was  not 
received  by  Van  Landingham  until  after  the  levy  of  the  attach- 
ment. His  Honor  held  that  the  contract  was  complete  when  the 
telegram  was  sent  from  Chicago,  and  that,  title  having  passed  to 
Van  Landingham  before  the  alleged  conversion,  the  plaintiff  could 
not  recover.  In  the  cases  of  Crook  v.  Cowan,  64  N.  C,  743,  and 
Ober  v.  Smith,  78  N.  C,  313,  it  was  held  that  where  there  was  a 
delivery  to  a  carrier  in  pursuance  of  an  "unconditional  and  spe- 
cific" order,  the  contract  was  complete ;  but  it  has  never  been  dis- 
tinctly decided  in  this  State  whether,  in  the  absence  of  such  a  de- 
livery of  the  property,  the  mere  dispatching  of  an  acceptance  by 
post  or  telegraph  has  the  effect  of  consummating  a  contract  at  the 
time  of  such  dispatching.  Upon  this  point  the  authorities  are 
conflicting.  It  is,  however,  unnecessary  to  decide  the  question  in 
this  case;  for,  granting  the  affirmative  of  the  proposition,  we  are 
of  the  opinion  that  under  the  peculiar  terms  of  this  correspon- 
dence, and  in  view  of  the  testimony,  the  court  was  not  warranted 
in  charging  the  jury  that  the  title  vested  in  Van  Landingham  at 
the  time  the  telegram  was  sent.  It  does  not  appear  that  it  was 
sent  early  in  the  day,  according  to  the  terms  of  the  offer,  and  it 
was  incumbent  on  the  defendant  to  have  shown  this  fact  before 
he  could  avail  himself  of  the  principle  contended  for.  "In  our 
own  law  the  effect  of  naming  a  definite  time  in  the  proposal  is 
simply  negative,  and  for  the  proposer's  benefit ;  that  is.  it  operates 
as  a  warning  that  an  acceptance  will  not  be  received  after  the 
lapse  of  the  time  named.  In  fact,  the  proposal  so  limited  comes 
to  an  end  of  itself  at  the  end  of  that  time,  and  there  is  nothing 
for  the  other  party  to  accept."  Pol.  Cont,  9;  Larmon  v.  Jordan, 
56  111.,  204;  R.  R.  v.  Bartlett,  3  Cush.,  224;  Mactier's  Admr.  v. 
Frith,  6  Wend.,  103;  Cheney  v.  Cook,  7  Wis.,  413.  The  principle 
is  well  illustrated  by  the  following  extract  from  the  opinion  of  the 


OFFER    AND    ACCEPTANCE.  47 

court  in  Maclay  v.  Harvey,  90  111.,  525:  "It  was  said  by  the  Lord 
Chancellor  in  Dunlop  v.  Higgins,  1  H.  L.  Cases,  387:  'Where  an 
individual  makes  an  offer  by  post,  stipulating  for,  or  by  the  nature 
of  the  business,  having  the  right  to  expect  an  answer  by  return  of 
post,  the  offer  can  only  endure  for  a  limited  time,  and  the  making 
of  it  is  accompanied  by  an  implied  stipulation  that  the  answer 
shall  be  sent  by  return  of  post.  If  that  implied  stipulation  is  not 
satisfied,  the  person  making  the  offer  is  released  from  it.  When 
a  person  seeks  to  acquire  a  right,  he  is  bound  to  act  with  a  de- 
gree of  strictness  such  as  may  not  be  acquired  where  he  is  only 
endeavoring  to  excuse  himself  from  a  liability.' '  This  is  regarded 
as  a  leading  case  on  the  question  of  acceptance  of  contract  by  let- 
ter, and  the  language  quoted  we  regard  as  a  clear  and  accurate 
statement  of  the  law  as  applicable  to  the  present  case.  It  is  clear 
here  that  the  nature  of  the  business  demanded  a  prompt  answer, 
and  the  words,  "You  will  confer  a  favor  by  giving  me  your  an- 
swer by  return  mail,"  do,  in  effect,  '"stipulate"  for  an  answer  by 
"return  mail."  The  same  principles  apply  to  correspondence  by 
telegraph.  Trevor  v.  Wood,  36  N.  Y.,  307.  Under  this  view  of 
the  law,  which  is  well  sustained  both  by  reason  and  authority,  the 
requirement  of  the  offerer,  Van  Landingham,  that  he  "must  have 
a  reply  early  to-morrow,"  can  not  be  regarded  otherwise  than  as 
a  stipulation  for  an  acceptance  within  that  time ;  and,  as  the  de- 
fendant has  not  shown  a  compliance  with  such  stipulation,  it  must 
follow  that  there  was  error  on  the  part  of  His  Honor  in  charging 
the  jury  that  the  mere  sending  of  the  acceptance  before  the  levy 
operated  to  transfer  the  title.  The  offer  was  limited  to  early  in 
the  day.  The  acceptance  was  not  received  until  late  in  the  eve- 
ning. Even  conceding  that  the  contract  would  be  complete  from 
the  sending  of  the  dispatch,  there  is,  as  we  have  said,  no  testi- 
mony to  show  that  it  was  sent  within  the  time  limited  by  the 
offer.  The  title,  therefore,  did  not  pass.  Benj.  Sales  (3  Am. 
Ed.),  48,  note.  For  these  reasons  we  are  of  the  opinion  that  there 
should  be  a  new  trial. 

That  the  acceptance  is  complete  when  the  letter  is  properly  mailed 
accepting  the  offer,  unless  otherwise  indicated  in  the  offer,  see  Tayloe 
v.  Merchat.  Ins.  Co.,  9  How.,  390;  Burton  v.  U.  S.,  202  U.  S.,  358,  384: 
6  Ann.  Cas.,  378;  Adams  v.  Lindsell,  6  E.  R.  C.  80;  Brauer  v.  Shaw, 
168  Mass.,  198,  46  N.  E.,  617,  60  A.  S.  R.,  387;  New  v.  Ger.  F.  Ins.  Co., 
171  Ind.,  33,  85  N.  E.,  703,  131  A.  S.  R.  245;  the  same  rule  applies  in 
the  case  of  acceptance  by  telegraph.  Lucas  v.  Tel.  Co.,  131  Iowa,  669, 
109  N.  W.,  191,  6  L.  R.  A.  (N.  S.),  1016,  110  A.  S.  R.,  742.  See  generally 
2  Kent  Com.,  477;  1  Page  Cont.,  sec.  52;  1  Parsons  Cont.,  522;  Clark 
Cont.,  26:  Pollock  Cont.,  34;  6  R.  C.  L.,  611;  9  Cyc,  294;  7  A.  &  E. 
Enc,  135;  Contracts,  Cent.  Dig.,  sees.  80.  119,  120;  Dec.  Dig.,  sec.  26. 


48  FORMATION    Of    CONTRACT. 

2.   BY    MANNER  INDICATED   IN    THE  OFFER. 

(21)  CROOK  v.  COWAN, 
64  N.  C,  743—1870. 

This  action  was  brought  to  recover  the  price  of  two  carpets  fur- 
nished under  the  following  circumstances : 

On  December  10,  1866,  D.  S.  Cowan  wrote  to  Walter  Crook,  of 
Baltimore,  ordering  two  carpets,  giving  description,  and  saying, 
"I  want  good,  durable  carpets,  and  wish  you  to  have  them  made 
up.  You  can  forward  them  to  my  address  at  Wilmington,  N.  C, 
per  Express,  C.  O.  D.,  or  else,  advise  me  of  the  cost,  and  I  will 
remit  while  you  are  having  them  made  up."  The  plaintiff  received 
this  letter  on  December  14,  and  made  no  reply,  but  made  up  the 
carpets  and  shipped  them  as  directed,  by  express,  on  December  21. 
On  December  26,  defendant  telegraphed  plaintiff  inquiring  about 
his  order,  and  receiving  no  reply,  on  January  2,  1867,  bought  other 
carpets.  On  January  16,  the  plaintiff  notified  defendant  that  the 
carpets  had  been  reported  uncalled  for  by  the  express  company, 
and  asked  him  to  take  them  out.  The  defendant  replied,  referring 
to  the  failure  to  receive  any  reply  to  his  letter  or  telegram,  and 
saying,  "I  called  at  telegraph  office  frequently  from  26th  December 
to  2d  January,  1867, — seeking  a  reply,  but  received  none.  Con- 
cluding that  my  letter  had  miscarried,  and  consequently  you  did 
not  understand  the  dispatch,  I  bought  carpets  in  Wilmington  and 
had  them  made  up.  Agreeable  to  the  above  facts,  I  can  not  think 
I  am  morally  bound  to  take  the  carpets." 

There  was  a  verdict  and  judgment  for  the  plaintiff,  and  the  de- 
fendant appealed. 

ReadE,  J.  H  one  writes  to  another,  who  has  not  offered  his 
property  for  sale  proposing  to  buy,  the  letter  is  of  course  nothing 
but  an  offer,  and  is  of  no  force  until  the  other  answers  and  ac- 
cepts the  offer;  then  the  contract  is  made.  But  if  one  holds  his 
property  out  for  sale,  naming  the  terms,  and  another  accepts  the 
terms,  the  contract  is  complete;  or,  if  one  bids  at  an  auction,  and 
the  hammer  falls,  the  contract  is  complete;  or,  if  one  advertises, 
offering  a  reward  for  something  to  be  done,  as  soon  as  the  thing 
is  done  the  contract  is  complete,  and  the  reward  is  due.  So,  in 
our  case,  the  plaintiff  held  himself  out  as  a  carpet  manufacturer 
and  vender,  and  offered  his  carpets  for  sale,  and  invited  purchas- 
ers ;  and  when  the  defendant  sent  him  the  unconditional  order  for 
carpets,  that  was  an  acceptance  of  his  offer,  and  the  bargain  was 
struck,  and  the  moment  that  the  carpets  were  delivered  to  the  ex- 
press, the  agent  designated  by  the  defendant  to  receive  and  trans- 


OFFER    AND    ACCEPTANCE.  49 

port  them  and  collect  the  bill,  the  delivery  was  made,  and  the 
property  passed  to  the  defendant.  But,  if  that  were  not  so,  our 
case  is  stronger  than  that.  Consider  the  case  as  if  the  first  offer 
was  made  by  the  defendant  to  the  plaintiff.  The  defendant  know- 
ing- that  the  plaintiff  was  a  carpet  vender,  sent  him  an  uncondi- 
tional order  for  carpets,  specifying  the  express  as  the  agent  to  re- 
ceive and  transport  them,  and  to  collect  the  bill,  and  the  order  was 
filled  to  the  letter.  Thereby,  the  offer  was  accepted,  the  property 
in  the  carpets  passed  to  the  defendant,  and  he  became  liable  for 
the  price,  as  for  goods  sold  and  delivered.  The  order  was  an 
offer,  the  filling  the  order  was  an  acceptance ;  and  an  offer  and 
acceptance  is  the  common  definition  of  a  contract. 

The  defense  is  put  upon  this  ground:  the  defendant's  letter  to 
plaintiff  was  only  an  offer,  there  was  no  contract  until  the  plaintiff 
accepted  it  and  notified  the  defendant;  and  the  notice  ought  to 
have  been  by  mail,  within  a  reasonable  time. 

The  plaintiff  says  that  he  did  accept  immediately  upon  receipt 
of  the  order,  and  forwarded  the  carpets  as  soon  as  he  could  have 
them  made  up,  which  was  within  a  reasonable  time — seven  days, 
and  that  this  was  all  he  had  to  do.  The  point  of  divergence  be- 
tween the  plaintiff  and  defendant  is,  that  the  defendant  says,  the 
plaintiff  ought  to  have  notified  him  by  mail  that  he  had  accepted 
the  offer,  and  forwarded  the  goods ;  that  merely  filling  the  order, 
although  in  the  exact  terms  thereof,  was  not  an  acceptance,  with- 
out notice.  The  propriety  of  giving  notice  by  mail  must  depend 
a  good  deal  upon  the  circumstances  of  each  particular  case,  as  if 
the  order  requires  it,  or,  if  the  order  is  not  sufficiently  specific, 
and  leaves  something  further  to  be  arranged,  or,  if  considerable 
time  must  pass  in  the  manufacture  of  the  article,  or,  if  the  route 
or  means  of  transportation  is  not  known,  or  the  voyage  long  and 
dangerous,  and  the  like.  But  if  an  offer  and  acceptance — an  un- 
conditional and  specific  order,  and  an  exact  fulfillment,  as  in  this 
case,  does  not  complete  the  contract,  how  would  it  be  possible  to 
complete  a  contract  by  mail?  A  sends  an  unconditional  order  to 
B,  and,  instead  of  B's  filling  the  order,  he  writes  back  that  he 
accepts  the  order  and  will  fill  it,  but  in  the  meantime  A  may  have 
changed  his  mind,  and  lest  he  has,  he  must  write  back  to  B  and  so 
on,  forever.  Adams  v.  Lindsell,  1  B.  &  Aid.,  681,  is  the  leading 
English  case,  illustrating  and  repudiating  this  circumlocution ;  and 
that  case  has  been  followed  ever  since  in  England  and  America, 
as  is  said  in  1  Parsons  on  Contracts,  note,  page  483.  In  that  case 
it  was  said,  speaking  of  the  above  rule,  "If  it  were  not  so,  no 
contract  could  ever  be  completed  by  post.  For  if  the  defendant 
was  not  bound  by  his  offer,  when  accepted  by  the  plaintiff,  until 
the  answer  was  received,  then  the  plaintiff  ought  not  to  be  bound 


50  FORMATION    OF    CONTRACT. 

until  after  he  had  received  the  notification  that  the  defendant  had 
received  his  answer  and  assented  to  it.  And  so  it  might  go  on 
ad  infinitum." 

We  admit  that  the  rule,  that  filling  an  order  completes  the  con- 
tract, is  confined  to  unconditional  and  specific  orders.  And,  if  the 
purchaser  thinks  proper,  he  can  make  his  order  as  guarded  as  he 
pleases.  He  may  say,  "I  want  such  goods;  can  you  furnish  them? 
If  so,  at  what  price,  and  within  what  time?  Inform  me  by  return 
mail.  I  will  pay  if  the  goods  arrive  safe, — otherwise  not"- — and 
the  like.  Then  he  will  not  be  liable  unless  the  terms  are  strictly 
complied  with. 

In  the  case  before  us  the  order  was  unconditional  and  specific, 
and  was  complied  with  to  the  letter.  The  defendant  did  not  ask 
the  plaintiff  to  inform  him  whether  he  would  fill  the  order.  He 
had  no  doubt  about  it.  It  was  the  plaintiff's  business  to  fill  such 
orders,  and  the  defendant  had  confidence  in  him.  So  far  from 
requiring  the  plaintiff  to  notify  him  by  mail,  he  impliedly  informed 
him  that  he  need  not  do  so:  Send  the  goods  by  Express,  C.  O. 
D.,  without  more  say  ;  and  send  the  bill  by  express  for  collection, 
or,  if  you  are  afraid  to  trust  me,  then,  in  that  case  only,  you  may 
write  to  me  and  I  will  send  the  money,  before  you  ship  the  goods, 
— is,  substantially,  what  the  defendant  said  in  his  order  to  the 
plaintiff.  There  was  no  use  in  informing  the  defendant  by  mail 
of  the  shipment  of  the  goods,  because  the  express  is  as  speedy 
as  the  mail ;  and  there  is  certainly  no  magic  in  sending  by  mail. 
And  sending  the  goods  is  the  best  notification. 

The  defendant  complains  also  that  the  plaintiff  did  not  answer 
his  telegram.  The  answer  is,  that  neither  the  mail  nor  the  tele- 
graph had  been  designated  as  the  means  of  communication,  but 
the  express.  And  it  was  the  defendant's  misfortune,  if  not  his 
fault,  to  go  elsewhere  than  to  the  place  designated,  for  informa- 
tion. The  plaintiff's  duty  ended  when  he  delivered  the  goods  to 
the  agent  designated  by  the  defendant,  the  express,  with  the  bill 
for  the  price  to  collect.  The  goods  were  at  their  destination — the 
express  office — when  the  defendant  sent  his  telegram.  He  did  not 
go  to  the  express  office  at  all,  and  offers  no  explanation  why  he 
did  not,  but  left  the  plaintiff  to  infer,  as  he  seems  to  have  done, 
that  his  purpose  was  to  avoid  the  contract. 

Per  Curiam.  Affirmed. 

Earlv  in  April  the  defendant  directed  the  plaintiff's  agent  to  -bin 
guano  to  him  at  Edward's  Ferry.  On  the  12th  of  April  the  plaintiff 
delivered  the  guano  to  the  steamboat  company  at  Raltimore,  consigned 
to  defendant  as  directed.  The  guano  failed  to  reach  defendant,  and  the 
first  notice  he  had  of  its  having  been  sent  was  when  the  price  was 
demanded  in  November.  TTe  had  paid  the  freight  with  other  freight 
bills,  but  received  nn  bill  of  lading.  The  defendant  was  held  liable  for 
the  price,  because  "as  soon  as  the  order  of  the  defendant  was  accepted, 


OFFER    AND    ACCEPTANCE. 


51 


the  contract  was  complete  without  further  notice,  and  it  was  fully  per- 
formed on  the  part  of  the  plaintiff  when  the  guano  was  delivered  to 
the  steamboat  company  in  good  condition."  Ober  v.  Smith,  78 — 313. 
For  another  view,  see  dissenting  opinion  of  Rodman,  J.,  in  this  case 
and  in   Crook  v.   Cowan. 

Where  the  offer  indicates  that  the  other  person  shall  promise  some- 
thing, communication  of  acceptance  is  necessary;  hut  where  it  indi- 
cates that  the  other  shall  do  some  act,  doing  the  act  may  be  an 
acceptance  without  further  communication.  White  v.  Corhes,  46  N.  Y., 
467;  New  v.  Ger.  Ins.  Co.,  171  Ind.,  33,  85  N.  E„  703,  131  A.  S.  R., 
245;  6  R.  C.  L.,  607.  Mere  silence  may,  under  exceptional  circum- 
stances, be  an  acceptance,  but  generally  there  must  be  something 
said  or  something  done  before  a  contract  is  established.  Prescott  v. 
Tones.  69  N.  H.,  305.  41  Ath,  352;  Royal  Ins.  Co.  v.  Realty.  119  Penn. 
St.,  6,  12  Ath,  607,  4  A.  S.  R.,  622;  retaining  goods  may  be  an  accept- 
ance Miller  v.  Lumber  Co.,  66—504;  Hobbs  v.  Massasoit  Whip  Co., 
158  Mass.,  194,  33  N.  E.,  495. 

Railroad  time  table  as  an  offer. — In  Coleman  v.  R.  R.,  138 — 351, 
plaintiff  sued  for  damages  for  loss  of  time,  etc  ,  caused  by  the  train's 
failing  to  come  on  schedule  time,  and  the  failure  of  the  agent  to  inform 
him,  etc.  The  court  says:  "The  printed  schedule  is  an  offer  which 
was'  accepted  by  the  plaintiff  when  he  asked  for  a  ticket,  and  1  e  had 
the  legal  right  to  be  transported  by  the  first  train  stopping  at  H. 
If  the  train  arrives  after  schedule  time  or  misses  connection,  or  de- 
livers a  passenger  at  his  destination  after  schedule  time,  unless  the 
delay  is  caused  by  no  fault  of  the  carrier,  the  passenger  has  a  right  to 
recover  for  loss  of  time  and  actual  expenses."  In  accord  with  this, 
see  Heirn  v.  McCaughan,  32  Miss.,  17,  66  A.  D.,  588,  603,  and  note; 
Sears  v.  R.  R.,  14  Allen,  433,  92  A.  D.,  780;  Denton  v.  Great  Northern 
R.  R.,  34  Eng.  L.  &  Eq.,  154.  Other  cases  hold  that  the  time  table 
only  holds  the  company  to  the  exercise  of  due  diligence  to  comply 
with  it,  and  the  liability  is  sometimes  restricted  by  a  notice  that  it  is 
only  for  information  and  is  subject  to  change.  Gordon  v.  R.  R.,  52 
N.  H.,  596,  13  A.  R.,  97;  Purcell  v.  R.  R.,  108 — 414;  Hansley  v.  R.  R., 
117 — 565,  32  L.  R.  A.,  544;  9  Cyc,  279;  5  A.  &  E.  Enc,  585;  Pollock 
Cont.,  16,  17;   Carriers,  Cent.   Dig.,  sees.   1037.   1046;  4  R.   C.   L.,   1069. 

3.    IT    MUST    BF    IDENTICAL    WITH    THE   OFFFR. 

(22)   MORRISON  v.  PARKS, 

164  N.   C,   197,  80  S.   E.,  85—1913.* 

Action  for  breach  of  contract  for  the  sale  of  lumber.  The  de- 
fendant wrote  to  the  plaintiff,  offering  80,000  feet  of  oak  at  $16 
per  M  "log-run,"  and  mill  culls  at  $8  per  M.  The  plaintiff  re- 
plied: "We  will  take  your  4/4  oak,  at  $16,  mill  culls  out.  We 
will  handle  all  your  mill  culls,  but  not  at  the  price  you  are  asking. 

We  are  buying  from    for  $4.50  on  board  the  cars.     We 

would  be  glad  to  handle  yours  at  this  price."     From  a  judgment 
of  nonsuit,  the  plaintiff  appealed. 

Clark,  C.  J.  .  .  .  The  alleged  contract  being  in  writing,  the  con- 
struction of  this  written  evidence  was  a  matter  for  the  court.  In 
order  to  make  the  offer  and  reply  a  contract,  "The  acceptance 
must  be  (a)  absolute  and  unconditional;  (b)  identical  with  the 
terms  of  the  offer;   (c)   in  the  mode,  at  the  place,  and  within  the 


52  FORMATION    OF    CONTRACT. 

time  expressly  or  impliedly  required  by  the  offer."  Clark  Cont., 
25 ;  Sumrell  v.  Salt  Co.,  148  N.  C,  552. 

The  plaintiff  Morrison  testified  that  "4/4"  means  lumber  "an 
inch  thick,  of  any  length  or  width,"  and  that  "log-run"  means 
"any  thickness,  with  culls  out."  He  further  testified  that  the 
market  price  of  4/4  lumber,  of  that  character,  at  that  place  and 
time,  was  $18.50.  It  is  apparent  that  the  reply  was  not  an  accept- 
ance of  the  terms  of  the  offer  of  the  defendant.  (1)  The  defend- 
ant offered  to  take  $8  per  M  for  mill  culls.  The  plaintiff  replied, 
offering  $4.50.  (2)  The  defendant  offered  80,000  feet  of  oak 
"log-run"  at  $16.  The  plaintiff  replied,  offering  $16  per  M  for 
4/4  oak,  an  entirely  different  article,  and  which  he  himself  testi- 
fied was  then  worth  in  the  market  $18.50  at  the  same  place. 

There  was  no  contract.  The  offer  of  the  defendant  was  not 
accepted,  but  a  counter-offer  of  an  entirely  different  nature  was 
made.  The  minds  of  the  parties  never  met.  The  judgment  of 
nonsuit  must  be  affirmed. 

The  owner  of  certain  vessels  then  on  the  way  from  New  York  to 
North  Carolina,  proposed  to  A  to  guarantee  a  certain  price  for  corn  if 
he  would  ship  it  in  these  vessels.  A  did  not  ship  the  corn  in  these 
vessels,  but  did  send  it  by  other  vessels  of  the  same  owner  a  month 
or  two  later,  and  failed  to  receive  the  guaranteed  price.  This  was  not 
an  acceptance  so  as  to  bind  the  owner  on  the  first  proposition.  Spruill 
v.  Trader,  50—39.  For  other  cases,  see  Mizell  v.  Burnett,  49—240; 
Gregory  v.  Bullock,  120—260;  Clark  v.  Lumber  Co.,  158—139;  Hall  v. 
Tones,  164 — 199;  Eliason  v.  Henshaw,  4  Wheaton,  382;  Weaver  v.  Burr, 
31  W.  Va.,  736,  3  L.  R.  A.,  94;  Jordan  v.  Norton,  4  M.  &  W.,  155,  6 
E.  R.  C,  142;  Carr  v.  Duval,  14  Peters,  77;  6  R.  C.  L.,  608;  Contracts, 
Cent.   Dig.,   sees.  88,   100;   Dec.   Dig.,  sec.   16. 

(23)  PRTIT  v.  WOODLIEF, 
115    N.    C,    120,    20    S.    E.,    208—1894. 

Avery,  J.  The  defendant  enclosed  in  a  letter  a  draft  to  the 
plaintiff  for  $300,  setting  forth  upon  its  face  that  it  was  to  op- 
erate as  a  payment  in  full  of  a  claim  for  repairing  an  engine.  The 
defendant  contended  that  only  $250  was  in  fact  due,  but  stated  in 
his  letter  that  he  had  concluded  to  send  $300.  The  letter  and 
draft  construed  together  constituted  a  proposal  of  compromise, 
and  even  though  in  reality  a  larger  sum  was  due,  as  the  jury 
found,  if  the  offer  was  accepted,  either  expressly  or  by  implica- 
tion arising  from  the  defendant's  conduct,  there  was  not  simply 
a  valid  executory  agreement,  but  an  executed  contract,  as  in  that 
event  the  payment  operated  to  discharge  the  whole  claim. 

The  defendant  Woodlief  not  only  stated  in  his  letter  that  the 
draft  for  $300  was  enclosed  "to  settle  with  you  (plaintiff)  in  full 
to  date,"  but,  according  to  the  undisputed  testimony,  the  same 
words,  or  the  equivalent  expression,  "settlement  in  full  to  date," 


OFFER    AND    ACCEPTANCE.  53 

were  incorporated  in  the  draft  itself,  which  was  drawn  on  Strud- 
wick  &  Royster,  and  was  afterwards  destroyed  by  tire.  When 
the  plaintiff  endorsed  this  draft  and  collected  the  money,  with  the 
proposal  staring  him  in  the  face  that  it  should,  if  received,  operate 
to  discharge  the  whole  debt,  instead  of  returning  it  to  the  drawer 
and  declining  the  offer,  we  think  that  his  conduct  amounted  to  an 
acceptance  of  it,  and  the  debt  was  therefore  discharged  in  full. 
Our  statute  (The  Code,  sec.  575),  having  been  declared  constitu- 
tional, the  offer  of  a  part  in  satisfaction  of  the  whole,  if  accepted, 
discharges  a  debt  as  fully  and  effectually  as  if  the  entire  sum  orig- 
inally due  is  paid  in  full.  When  the  amount  due  is  uncertain  or 
unliquidated,  if  an  offer  in  satisfaction  of  the  claim  is  accom- 
panied with  such  acts  and  declarations  as  amount  to  a  condition 
that  the  money  shall  be  accepted  only  as  a  payment  in  full  of  the 
claim,  and  the  party  to  whom  the  offer  is  made  must  of  necessity 
understand,  from  its  very  terms,  that  if  he  takes  the  money  he 
takes  it  subject  to  such  condition,  then,  in  law,  the  payment  op- 
erates to  discharge  the  whole  claim.  Preston  v.  Grant,  34  Vt., 
201;  Townslee  v.  Healee,  39  Vt.,  522;  Boston  Rubber  Co.  v. 
Peerless  Co.,  58  Vt.,  553.  Under  the  construction  placed  upon 
our  statute,  the  offer  of  a  less  sum  than  is  due,  when  the  amount 
of  the  debt  is  certain,  is  in  effect  the  same  as  the  offer  of  a  given 
sum  in  satisfaction  of  a  contingent  or  unliquidated  claim.  We 
can  not  rely  as  authority,  therefore,  upon  the  earlier  cases  decided 
by  the  court,  or  upon  the  authorities  in  other  States,  where  the 
principle  still  prevails  that  an  agreement  to  accept  a  payment  of 
a  part  of  an  unconditional  claim  for  a  sum  certain  in  satisfaction 
of  the  whole  is,  unless  there  is  an  actual  release,  but  a  nudum 
pactum.  We  must,  therefore,  be  governed  by  the  rule  adopted  in 
reference  to  offers  to  settle  contingent  claims,  because  they  are 
analogous  to  proposals  of  compromise  of  indebtedness  under  our 
statute.  The  plaintiff  knew,  from  the  face  of  the  draft,  that  the 
defendant  intended  it  to  be  accepted  upon  condition  that  it  should 
discharge  the  debt,  and  that  the  draft  itself  should  be  in  the  nature 
of  a  receipt  or  voucher  for  the  full  payment.  With  that  knowledge 
he  chose  to  use  the  draft  and  take  his  chances  to  collect  more. 
We  think  the  question  of  intent  was  no  more  an  open  one  for  the 
jury  to  determine  upon  the  testimony  than  would  be  the  question 
of  acceptance  where  the  drawee  writes  the  word  "Accepted"  on 
the  back  of  a  bill  of  exchange  and  signs  his  name  under  it.  There 
is  no  difference  in  principle  between  the  case  at  bar  and  that  of 
Boykin  v.  Buie,  107  N.  C,  501.  There  the  creditor  agreed  by 
letter  to  accept  an  offer  from  the  debtor  of  a  part  in  discharge  of 
his  whole  debt,  but  when  the  latter  forwarded  a  check  in  compli- 
ance with   the   agreement,   entered   the   amount   paid   as   a   credit. 


54  formation  of  contract. 

In  our  case  the  defendant  sent  a  draft  and  a  letter,  both  express- 
ing the  condition  upon  which  the  draft  was  to  be  accepted.  The 
terms  of  the  proposition  being  unmistakable,  we  think  that  the 
acceptance  of  the  money  was  'an  implied  assent  to  the  proposal, 
the  legal  effect  of  which  was  to  discharge  the  whole  debt. 
New  trial. 

Accord  King  v.  Phillips,  94—555;  Pruden  v.  R.  R.,  121—509;  Kerr  v. 
Saunders,  122—635;  Cline  v.  Rudisill,  126—523;  Ore  Co,  v  Powers, 
130—152;  Armstrong  v.  Lonon,  149-434;  Drewry  v.  Davis,  151—334; 
Lumber  Co.  v.  Lumber  Co.,  164—359;  Rosser  v.  Bynum  (N.  C.J,  84  b.  h., 
393;  Fuller  v.  Kemp,  138  N.  Y.,  231,  20  L.  R.  A.,  785. 

6.  Revocation    of   offer. 

1.    IN    GENERAL,    AN    OFFER    MAY    BE    REVOKED    AT    ANY    TIME    BEFORE 

ACCEPTANCE. 

(24)    PADDOCK  v.  DAVENPORT, 
107  N.  C,  710,  12  S.  E.,  464—1890. 

This  was  a  civil  action  based  upon  the  following  writing: 
"Know  all  men  by  these  presents,  that  for  and  in  consideration 
of  fifty  cents  per  tree,  on  the  stump,  I,  R.  W.  Davenport,  of  Clay 
County,  N.  C,  have  this  day  given  to  T.  S.  Arthur  the  exclusive 
privilege  for  sixty  days  of  buying  all  of  the  merchantable  poplar 
and  ash,  and  $1  for  cherry  trees ;  that  he,  his  agents  or  successors, 
may  select  and  mark  on  my  tract  of  300  acres  of  land,  No.  13  and 
2456,  in  district  18,  on  the  waters  of  Shooting  Creek,  Towns  and 
Clay'  County,    Georgia,    and    North    Carolina ;   the    said   timber   to 
be  paid  for  when  it  is  marked  up.     I  further  give  said  T.  S.  Ar- 
thur or  his  successors  the  right-of-way,   free  of  charge,  over  my 
lands  by  a  practicable  route  to  get  their  timber  out,  and  the  use 
of  small  timbers  to  build  roads  and  load  timber,  and  when  said 
timber  is  paid   for,  as   provided   for  above,   I,   R.   W.   Davenport, 
herein  bind  myself,  my  heirs  and  lawful  assigns,  to  make  said  T. 
S.  Arthur  or  his  legal'  representatives  a  good  and  lawful  deed  to 
said  timber.     This  October  23,   1889. 

"(Signed)  R.  W.  Davenport.  (Seal.)" 

'I'.  S.  Arthur,  for  a  valuable  consideration,  assigned  his  interest 
in  the  contract  to  the  plaintiff,  and  the  plaintiff,  before  the  sixty 
days  expired,  went  to  the  defendant  and  offered  to  mark  and  pay 
for  the  trees.  The  defendant  refused  to  allow  him  to  do  so,  but 
sold   the  timber  to  a  third  person   with   notice. 

The  plaintiff  brought  suit  for  specific  performance,  to  have  the 
purchaser  declared  a  trustee,  and  for  damages  for  breach  of  con- 
tract. Demurrer  by  the  defendant  was  sustained,  and  the  plaintiff 
appealed. 


OFFER    AND    ACCEPTANCE.  JO 

Shepherd,  J.  Two  causes  of  action  are  set  out  in  the  com- 
plaint— one  for  damages  for  breach  of  contract,  and  the  other  for 
its  specific  performance.  The  court  held,  upon  demurrer,  that 
neither  of  said  causes  of  action  could  be  maintained. 

1.  As  to  the  cause  of  action  against  the  defendant,  Davenport, 
we  think  there  was  error  in  the  ruling  that  the  contract  for  the 
sale  of  the  trees  was  void  for  want  of  consideration. 

The  paper-writing  sued  upon  is  substantially  an  offer  to  sell  the 
trees  at  a  certain  price  within  sixty  days.  There  being  no  con- 
sideration for  the  offer,  it  could  have  been  withdrawn  at  any  time 
within  the  period  mentioned  before  acceptance  by  the  plaintiff. 
The  offer,  however,  was  not  so  withdrawn,  and  the  plaintiff  having 
accepted  it  within  the  stipulated  time,  it  became  a  binding  con- 
tract, for  the  breach  of  which  the  said  defendant  is  answerable  in 
damages.  1  Benjamin  on  Sales,  50,  and  the  numerous  cases  cited 
in  the  notes. 

The  offer  of  the  plaintiff  to  pay  the  price  and  mark  the  trees 
was  sufficient,  in  our  opinion,  to  constitute  a  valid  acceptance. 
There  was,  therefore,  error  in  the  ruling  as  to  this  cause  of  action. 

See  Cozart  v.  Hernclon,  supra  (17);  Tayloe  v.  Ins.  Co.,  9  How.,  3%; 
Travis  v.  Ins.  Co.,  104  Fed.,  486;  Lunstrass  v.  Ins.  Co.,  48  Mo.,  201,  8 
A  R.,  100;  Page  Cont.,  sec.  33;  Clark  Com.,  31;  9  Cyc,  283;  7  A.  & 
E.  Enc.  128;  6  R.  C.  L.,  603;   Contracts,  Cent.   Dig.,  sec.  57;   Dec.   Dig., 

sec.  19.  .      . 

It  is  said  that  an  offer  under  seal  is  irrevocable,  since  it  is  in  the 
nature  of  a  deed,  complete  by  delivery,  requiring  only  the  assent  of 
the  other  party,  and  this  is  presumed  until  a  rejection  is  shown. 
Willard  v.  Tayloe,  8  Wall.,  557;  Xenos  v.  Wickham,  6  E.  R.  C,  422; 
O'Brien  v.  Boland,  166  Mass.,  481,  44  N.  E.,  602;  Pollock  Cont.,  6;  Clark 
Cont.,  32;  Page  Cont.,  sec.  35;  9  Cyc,  287.  In  Paddock  v.  Davenport, 
supra,  the  writing  was  under  seal,  but  the  court  said  it  could  have 
been  revoked  at  any  time  before  acceptance.  See  also  Alston  v.  Con- 
nell,   140—485;   State  v.  Pool,  27—105. 

2.    OPTIONS. 

(25)   BLALOCK  v.  CLARK, 

133  N.  C,  306,  45  S.  E.,  642—1903. 

This  was  a  civil  action  on  contract.  From  a  judgment  for  the 
defendant  the  plaintiff  appealed. 

Clark,  C.  J.  This  is  an  action  to  recover  damages  for  non- 
delivery of  200  bales  of  cotton.  A  witness,  one  of  the  plaintiffs, 
went  to  see  the  defendants  7th  February.  They  had  200  bales 
for  sale,  which  the  witness  sampled  and  asked  an  option  upon  them, 
to  see  if  he  could  place  them.  The  defendants  on  that  day  gave 
him  this  option,  dated  7th  February  and  signed  by  them:     "We 


56  FORMATION    OF    CONTRACT. 

offer  you  160  to  200  bales  of  cotton,  grades  as  you  have  seen,  at 
eight  cents  per  pound,  F.  O.  B.,  provided  we  do  not  receive  better 
price  by  mail  to-day.  This  offer  closes  by  8th  February."  Later, 
on  that  day  (7th  February),  the  plaintiffs  wired  the  defendants: 
"Wire  me  at  Mount  Gilead,  at  once,  if  my  offer  is  bettered."  The 
next  day,  8th  February,  the  witness  wired  the  defendants :  "Have 
written  once,  wired  twice,  no  reply ;  we  claim  cotton  on  your  offer. 
Shipping  instructions  will  follow."  He  testified  further  that  on 
9th  or  10th  February,  he  went  to  Troy,  where  the  defendants  re- 
sided, twenty  miles  through  the  country,  to  weigh  up,  pay  for  and 
ship,  but  did  not  do  so  because  of  rain,  cotton  not  under  shelter 
and  wet.  As  soon  as  it  was  dry  and  the  rain  and  the  condition  of 
the  river  would  permit  him  to  get  there,  he  says  he  went  back,  on 
15th  February,  and  told  the  defendants  he  had  come  "to  weigh, 
pay  for  and  ship  cotton ;"  whereupon  they  told  him  they  would 
not  let  him  have  it ;  that  cotton  had  gone  up  to  eight  and  a  half 
cents  and  they  could  not  afford  to  let  him  have  it  at  eight  cents. 
The  witness  further  says  he  demanded  the  cotton  and  the  defend- 
ants refused;  that  he  was  able  and  ready  to  pay;  that  he  did  not 
tender  the  cash  ;  that  he  did  not  have  enough  cash  in  hand,  but 
had  money  in  bank  and  credit  in  bank,  and  "could  have  paid  cash 
that  day."  That  he  had  resold  part  of  the  cotton  to  others  at  an 
advance,  and  that  it  was  a  cash  transaction. 

Upon  this  evidence  it  was  error  to  nonsuit  the  plaintiff.  The 
option  "to  close  by  8th  February,"  included  February  8th,  till  mid- 
night. "By  8th  February"  means  "not  later  than  February  8th." 
Cotton  Mills  v.  Dunston,  121  N.  C,  16,  and  cases  there  cited.  Be- 
sides, by  the  terms  of  this  option  it  could  operate  only  on  8th 
February,  for  it  was  given  on  7th  February,  and  the  defendants 
reserved  the  right  to  accept  a  higher  bid  if  they  received  it  by 
mail  on  that  day. 

The  peremptory  refusal  of  the  defendants  to  deliver  the  cotton 
"because  the  price  had  gone  up"  made  it  unnecessary  to  make  any 
tender  of  the  actual  cash,  for  on  this  motion  the  witness's  testi- 
mony must  be  taken  as  true,  that  he  offered  to  pay  and  was  ready 
and  able  to  pay.  Smith  v.  B.  &  L.  Asso.,  119  N.  C,  260,  and 
cases  there  cited;  Grandy  v.  Small,  50  N.  C,  50.  Whether  there 
was  unreasonable  delay  in  going  for  the  cotton  is  a  matter  for  the 
jury,  under  instructions  from  the  court,  and  upon  which  the  de- 
fendants may  wish  to  offer  evidence.  The  acceptance  of  the  offer 
was,  8th  February,  in  time.  The  execution  of  the  contract,  the 
payment  and  delivery  must  be  in  a  reasonable  time.     .     .     . 

Error. 

An  option  is  defined  to  be  "the  obligation  by  which  one  binds  himself 
to  sell,  and  leaves  it  discretionary  with  the  other  party  to  buy,  which 
is    simply    a    contract    by    which    the    owner    of    property    agrees    with 


OFFER    AND    ACCEPTANCE.  57 

another  person  that  he  shall  have  the  right  to  buy  the  property  at  a 
fixed  price  within  a  certain  time."  "If  not  based  on  a  valuable  con- 
sideration, the  right  to  buy  may  be  withdrawn  at  any  time  before 
acceptance;  but  if  there  is  a  valuable  consideration  to  support 
it,  the  right  continues  during  the  period  fixed  in  the  op- 
tion." Winders  v.  Kenan,  161  p.  632,  citing  Black  v.  Maddox, 
104  Ga  157;  Trogden  v.  Williams,  144—199;  Cummins  v.  Beaver,  103 
Va.,  230;  Hardy  v.  Ward,  150—393;  Weaver  v.  Burr,  31  W.  Va.,  201. 
For  other  cases,  see  Davis  v.  Martin,  146 — 281;  Timber  Co.  v.  Wilson, 
151 — 154;  Clark  v.  Lumber  Co.,  158—139;  Ward  v.  Albertson,  165— 
218;  Stitt  v.  Huidekoper,  17  Wall.,  384;  Eskridge  v.  Glover,  5  St.  & 
P  (Ala.),  264,  26  A.  D.,  344;  Litz  v.  Goosling,  93  Ky.,  185;  21  L.  R.  A., 
127;  Coleman  v.  Applegarth,  68  Md.,  21,  11  Atl.,  284,  6  A.  S.  R.,  417; 
6  R.  C.  L.,  604;  9  Cyc,  285;  20  A.  &  E.  Enc,  924;  Contracts,  Cent. 
Dig.,   sec.  69;    Dec.   Dig.,   sec.    19. 

Timber  contracts  as  options. — When  the  timber  on  land  is  sold,  to 
be  removed  within  a  certain  time,  it  is  in  the  nature  of  an  option, 
and  the  vendee  can  not  remove  it  after  the  specified  time,  nor  can 
he  recover  the  money  paid  for  such  right.  Bunch  v.  Lumber  Co., 
134 — 116;  Trogden  v.  Williams,  144 — 192;  Lumber  Co.  v.  Smith,  146 — 
158;  Bateman  v.  Lumber  Co.,  154 — 248;  Lumber  Co.  v.  Whitley,  163—47. 

In  a  lease  with  an  option  to  purchase. — The  lessee  has  the  time 
specified  to  exercise  his  right,  the  lease  being  a  sufficient  consideration, 
and  his  failure  to  exercise  the  right  will  discharge  the  lessor.  Product 
Co  v  Dunn,  142 — 471;  Pearson  v.  Millard,  150—303;  Hayes  v.  O'Brien, 
149  111.,  403,  37  N.  E.,  73,  23  L.  R.  A.,  555. 

3.  broker's  contract. 

(26)   ABBOTT  v.  HUNT, 
129    N.    C,    403,    40    S.    E.,    119—1901. 

Clark,  J.  In  March,  1899,  the  defendant,  who  was  the  owner 
of  certain  real  estate  in  Charlotte,  agreed  orally  with  the  plaintiffs, 
who  were  real  estate  agents  and  at  that  time  in  charge  of  said 
property  as  his  rental  agents,  that  they  might  sell  it  if  they  could 
secure  a  price  that  would  net  the  defendant  the  sum  of  $33,000. 
The  plaintiffs  made  effort  to  sell  the  property,  and  on  April  4 
telegraphed  defendant  an  "offer  of  $32,000,  subject  to  a  commis- 
sion of  2  percent."  This  offer  the  defendant  declined  by  letter, 
and  added :  "I  prefer  you  do  not  offer  it  again,  even  at  the  price 
named,  unless  I  can  sell  my  residence.  Sell  the  residence,  then  I 
will  sell  the  business  property."  On  April  10  the  plaintiffs  wrote 
defendant  they  had  sold  the  property  at  $33,000  net,  and  he  de- 
clined to  ratify  their  action.  His  Honor  below  correctly  held  that 
the  defendant's  letter  of  April  4  terminated  the  agency. 

An  agency  can  be  revoked  at  any  time  before  a  valid  and  bind- 
ing contract,  within  the  scope  of  the  agency,  has  been  made  with 
a  third  party.  The  only  exception  is  an  agency  coupled  with  an 
interest,  and  that  must  be  an  interest  in  the  subject  of  the  agency, 
and  not  merely  something  collateral,  as  commissions  or  compensa- 
tion for  making  sale.  Hartley's  Appeal,  53  Pa.  St.,  212,  91  A.  D., 
207,  which  holds  that  a  power  of  attorney  by  which  the  attorney 


58  FORMATION    OF    CONTRACT. 

is  to  receive  as  compensation  "one-half  of  the  net  proceeds"  is  not 
a  power  coupled  with  an  interest,  and  is  revocable.     .     .     . 

In  Sibbald  v.  Iron  Co.,  S3  N.  Y.,  378,  22  A.  R.,  441,  the  Court 
of  Appeals  of  New  York  reviews  the  cases  and  states  the  law 
thus:  "It  follows  as  a  necessary  deduction  from  the  established 
rule,  that  a  broker  is  never  entitled  to  a  commission  for  unsuc- 
cessful efforts.  The  risk  of  failure  is  wholly  his.  The  reward 
comes  only  with  his  success.  That  is  the  plain  contract  and  con- 
templation of  the  parties.  The  broker  may  devote  his  time  and 
labor,  and  expend  his  money  with  ever  so  much  of  devotion  to 
the  interest  of  his  employer,  and  yet  if  he  fails,  if  without  effect- 
ing an  agreement  or  accomplishing  a  bargain,  he  abandons  the 
effort,  or  his  authority  is  fairly  and  in  good  faith  terminated,  he 
gains  no  right  to  commissions.  He  loses  the  labor  and  effort  which 
were  staked  upon  success.  And  in  such  event  it  matters  not  that 
after  his  failure,  and  the  termination  of  his  agency,  what  he  has 
done  proves  of  use  and  benefit  to  the  principal.  In  a  multitude 
of  cases  that  must  necessarily  result.  He  may  have  introduced 
to  each  other  parties  who  otherwise  would  have  never  met ;  he 
may  have  created  impressions,  which  under  later  and  more  favor- 
able circumstances  naturally  lead  to  and  materially  assist  in  the 
consummation  of  a  sale;  he  may  have  planted  the  very  seed  from 
which  others  reap  the  harvest ;  but  all  that  gives  him  no  claim. 
It  was  part  of  his  risk  that,  failing  himself,  not  successful  in  ful- 
filling his  obligation,  others  might  be  left  to  some  extent  to  avail 
themselves  of  the  fruit  of  his  labors." 

In  Atkinson  v.  Pack,  114  N.  C,  597,  and  Martin  v.  Holley,  104 
X.  C,  36,  the  broker  had  procured  a  purchaser  at  the  stipulated 
price  before  the  revocation  of  the  power,  and,  of  course,  being  an 
executed  contract,  the  agent  was  entitled  to  his  commission,  and 
the  same  might  be  true  where  the  revocation  was  in  bad  faith,  just 
as  the  contract  was  about  being  consummated,  the  revocation  being 
for  the  purpose  of  depriving  the  agent  of  his  commissions.  But 
such  is  not  the  case  here.     There  is  no  evidence  to  show  it. 

No  error. 

When   a   broker,  authorized  to   sell,  has  commenced   negotiations,   tie 

owner  can  not  take  it  into  his  own  hands  and  complete  the  sale,  ami 
then  refuse  to  pay  the  commissions.  When  the  broker  has  procured  a 
purchaser  before  the  authority  is  withdrawn,  or  the  contract  fails 
because  of  defects  in  the  owner's  title,  he  is  entitled  to  commissions. 
Martin  v.  Holley,  104 — 36;  Mallonee  v.  Young,  119—549;  Satterthwaite 
v  Goodyear,  137—302;  Trust  Co.  v.  Adams,  145—161;  Clark  v.  Lumber 
Co  1 SS — 139;  Trust  Co.  v.  Goode,  164 — 19;  167—338;  Stensgaard  v. 
Smith  43  Minn..  11,  19  A.  S.  R.,  205;  Cloe  v.  Rogers,  121  Pac.  201,  38 
I  R  A  (N.  S.),  366;  Alexander  v.  Sherwood.  72  W.  Va.,  195,  77  S.  E., 
\0V  49  L  R.  A.  (N.  S.),  985;  Hartford  v.  McGillicuddy,  103  Me.,  224,  68 
\tl..'  860,    12   Ann.   Cas.,   1083;  4   R.    C.   L.,  252. 


OFFER    AND    ACCEPTANCE.  59 

4.    REVOCATION    MUST    BE   COMMUNICATED. 

WHEAT  v.  CROSS, 

Ante  (19;. 

The  revocation  of  an  offer  must  be  communicated,  if  express  revo- 
cation is  required,  and  this  may  be  either  directly  in  the  way  in  which 
the  offer  was  made,  or  by  any  notice  to  the  offeree  before  acceptance. 
Clark  on  Cont.,  33;  1  Page  Cont.,  sec.  36;  9  Cyc,  288.  289,  and  notes, 
discussing  Cook  v.  Oxley,  3  T.  R.,  653;  Stevenson  v.  Mclean,  6  E.  R. 
C,  82;  P'ollock  Cont.,  30,  32.  Whether  an  acceptance  once  mailed 
can  be  afterwards  revoked  by  notice  to  the  other  party  before  he 
receives  the  acceptance,  is  not  clearly  settled.  A  strict  application 
of  the  rule  would  make  such  acceptance  irrevocable.  Stevenson  v. 
McLean,  6  E.  R.  C,  82;  Household  Ins.  Co.  v.  Grant,  6 
E.  R.  C,  115;  Satterthwaite  v.  Goodyear,  137,  p.  304. 

5.    REVOCATION    BY    LAPSE    OF    TIME. 

BANK  v.  MILLER, 

Ante    (20). 

See  also  Mizell  v.  Burnett,  49—249;  1  Page  Cont.,  sees.  38,  39;  Clark 
Cont.,  36;  9  Cyc,  291;  7  Am.  &  Eng.  Encyc,  133;  Atlee  v.  Bartholomew, 
69  Wis.,  43,  5  A.  S.   R.,  103. 

6.    REVOCATION    BY    REJECTION    OR    CONDITIONAL    ACCEPTANCE. 

COZART  v.  HERNDON, 

Ante    (17). 

See  also  Gregory  v.  Bullock,  120—260;  Spruill  v.  Trader,  50—39; 
Egger  v.  Nesbitt,  122  Mo.,  667,  43  A.  S.  R.,  596;  Hyde  v.  Wrench,  3 
Beav.,  334,  6  E.  R.  C,  139;  Jordan  v.  Norton,  6  E.  R.  C,  141;  6  R.  C.  L., 
608;  Page  Cont.,  sec.  37;  Clark  Cont.,  36;  9  Cyc,  290;  7  A.  &  E.  Enc, 
128;    Contracts,    Cent.    Dig.,    sees.   96-103;    Dec    Dig.,    sees.   21.    23. 

7.    REVOCATION    BY    DEATH    OR    INSANITY. 

(27)    PRATT  v.  TRUSTEES, 

93  111.,  475,  34  A.  R.,  187—1879. 

This  was  an  action  by  the  trustees  of  the  Baptist  Society  against 
Mary  L.  Pratt,  admrx.,  upon  two  promissory  notes  executed  by 
her  intestate  to  said  trustees,  to  enable  them  to  buy  a  bell  for  the 
church.  Nothing  was  done  with  the  notes,  and  no  expense  was 
incurred  about  the  bell  until  after  the  death  of  the  intestate. 
Judgment   for  the  plaintiff.  Reversed. 

ScholField,  J.  In  the  absence  of  anyone  claiming  as  a 
bona  fide  assignee  before  maturity,  it  is  not  perceived  that  prom- 


60  FORMATION    OF   CONTRACT. 

issory  notes,  executed  as  these  were,  are,  in  any  material  respect, 
different  from  an  ordinary  subscription  whereby  the  subscriber 
agrees  under  his  hand,  to  pay  so  much  in  aid  of  a  church,  school, 
etc.,  where  there  is  no  corresponding  undertaking  by  the  payee. 
The  promise  stands  as  a  mere  offer,  and  may,  by  necessary  con- 
sequence, be  revoked  at  any  time  before  it  is  acted  upon.  It  is 
the  expending  of  money,  etc.,  or  incurring  of  legal  liability,  on  the 
faith  of  the  promise,  which  gives  the  right  of  action,  and  without 
this  there  is  no  right  of  action.  McClure  v.  Wilson,  43  111.,  356; 
Trustees  v.  Garvey,  53  111.,  401,  5  A.  R.,  51 ;  Bapt.  Ed.  Soc.  v. 
Carter,  72  111.,  247. 

Being  but  an  offer,  and  susceptible  of  revocation  at  any  time 
before  being  acted  upon,  it  must  follow  that  the  death  of  the 
promisor,  before  the  offer  is  acted  upon,  is  a  revocation  of  the 
offer.  This  is  clearly  so  upon  principle.  The  subscription  or  note 
is  held  to  be  a  mere  offer,  until  acted  upon,  because  until  then 
there  is  no  mutuality.  The  continuance  of  an  offer  is  in  the  nature 
of  its  constant  repetition,  which  necessarily  requires  someone  ca- 
pable of  making  a  repetition.  Obviously  this  can  no  more  be  done 
by  a  dead  man  than  a  contract  can,  in  the  first  instance,  be  made 
by  a  dead  man.     .     .     . 

An  analogous  case  is  Mich.  St.  Bank  v.  Leavenworth,  2  Wil- 
liams (Vt.),  209,  where  it  was  held  that  the  operation  of  a  letter 
of  credit  was  confined  to  the  life  of  the  writer,  and  that  no  re- 
covery can  be  had  upon  it  for  goods  sold  or  advances  made  after 
his  death.  The  question  has  been  raised,  in  some  cases,  whether 
a  party  acting  in  good  faith  upon  the  belief  that  the  principal  is 
alive,  may  recover,  does  not  arise  here,  as  there  is  nothing  in  the 
evidence  to  authorize  the  inference  that  the  bell  here  was  pur- 
chased under  the  belief  that  Pratt  was  still  alive. 

Judgment  reversed. 

If  the  contract  was  in  progress  of  execution,  and  there  remained 
a  single  act  to  be  done  to  complete  it,  the  death  of  one  of  the  parties 
before  that  act  was  done  would  prevent  the  making  of  the  contract. 
Mactier  v.  Frith,  6  Wend.,  103,  21  A.  D.,  262;  if  the  contract  is  by 
correspondence,  the  mailing  of  the  acceptance  completes  it,  and  the 
death  of  either  party  after  such  mailing  would  not  affect  it.  Ibid.;  N. 
W.  Mut.  L.  Ins.  Co.  v.  Joseph,  31  Ky..  714,  103  S.  W.,  317,  12  L.  R.  A., 
(N.  S.),  439.  If  the  party  who  makes  the  offer  dies  or  becomes  insane 
before  it  is  received  and  accepted,  the  offer  is  then  a  nullity,  though 
accepted  before  the  death  is  known.  The  Palo  Alto,  Fed.  Cas.,  10,700; 
see  also  Phipps  v.  Jones,  20  Pa.  St.,  260,  59  A.  D..  708;  Wallace  v. 
Townsend,  43  Ohio  St.,  537,  54  A.  R.  829;  Contracts,  Cent.  Dig.,  sec.  58; 
Clark  Cont..  37;  Page  Cont.,  sec.  40;  9  Cyc,  293;  7  A.  &  E.  Enc,  136;  6 
R.    C.    L.,   613. 


OFFER    AND    ACCEPTANCE.  61 

7.  Offers  to  the  public. 
1.   REWARDS. 

(28)   BROADNAX  v.  LEDBETTER, 
100  Tex.,  375,  99  S.  W.,  1111,  9  L.  R.  A.  (N.  S.),  1057—1907. 

This  was  an  action  to  recover  a  reward,  and  presented  the  fol- 
lowing question :  Was  notice  or  knowledge  to  plaintiff  of  the  ex- 
istence of  the  reward  when  the  recapture  was  made  essential  to 
his  right  to  recover? 

WiEEiAMS,  J.  .  .  .  Upon  the  question  stated,  there  is  a  conflict  of 
authorities  in  other  States.     All  that  have  been  cited  or  found  by 
us   have   received   due  consideration,   and   our   conclusion   is   that 
those  holding  the  affirmative  are  correct.     The  liability  for  a  re- 
ward of  this  kind  must  be  created,  if  at  all,  by  contract.     There 
is  no  rule  of  law  which  imposes   it  except  that  which  enforces 
contracts  voluntarily  entered  into.    A  mere  offer  or  promise  to  pay 
does  not  give  rise  to  a  contract.    That  requires  the  assent  or  meet- 
ing of  two  minds,  and  therefore  is  not  complete  until  the  offer  is  ac- 
cepted.    Such  an  offer  as  that  alleged  may  be  accepted  by  anyone 
who  performs  the  service  called  for  when  the  acceptor  knows  that 
it  has  been  made  and  acts  in  performance  of  it,  but  not  otherwise. 
He  may  do  such  things  as  are  specified  in  the  offer,  but  in  so  do- 
ing,  does  not  act  in  performance  of   it,  and  therefore   does   not 
accept  it,  when  he  is  ignorant  of  its  having  been  made.     There  is 
no  such  mutual  agreement  of  minds  as  is  essential  to  a  contract. 
The  offer  is  made  to  anyone  who  will  accept  it  by  performing  the 
specified   acts,   and   it   only   becomes   binding   when   another   mind 
has  embraced  and  accepted  it.     The  mere  doing  of  the  specified 
things  without  reference  to  the  offer  is  not  the  consideration   for 
which  it  calls.     This  is  the  theory  of  the  authorities  which  we  re- 
gard as  sound.      Pollock   Cont,  20;  Anson,   Cont.,   41;  Wharton, 
Cont.,  sees.  24,  507;   Story,  Cont.,  493;   Page,   Cont.,  sec.  32;  9 
Cyc,  254;  29  A.   &  E.  Enc,  956.     The  decisions  of  the  courts 
upon  the  question  are  cited  by  the  authors  referred  to. 

Some  of  the  authorities  taking  the  opposite  view  seem  to  think 
that  the  principles  of  contracts  do  not  control  the  question,  and 
in  one  of  them,  at  least,  it  is  said  that  "the  sum  offered  is  but  a 
boon,  gratuity,  or  bounty,  generally  offered  in  a  spirit  of  liberality, 
and  not  as  mere  price,  or  a  just  equivalent  simply  for  the  favor 
or  service  requested,  to  be  agreed  or  assented  to  by  the  person 
afterward  performing  it,  but,  when  performed  by  him,  as  justly 
and  legally  entitling  him  to  a  fulfillment  of  the  promise,  without 


62  FORMATION    OF    CONTRACT. 

any  regard  whatever  to  the  motive  or  inducement  which  prompted 
him  to  perform  it."  Eagle  v.  Smith,  4  Houst.  (Del.),  293.  But  the 
law  does  not  force  persons  to  hestow  hoons,  gratuities,  or  hounties 
merely  hecause  they  have  promised  to  do  so.  They  must  he  legally 
hound  he  fore  that  can  he  done.  It  may  be  true  that  the  motive 
of  the  performer  in  rendering  service  is  not  of  controlling  effect, 
as  is  said  in  some  of  the  authorities  above  cited  in  pointing  out 
the  misapprehension  of  the  case  of  Williams  v.  Carwardine,  4  B. 
&  Ad.,  621,  6  E.  R.  C,  133,  into  which  some  of  the  courts  have 
fallen;  but  this  does  not  reach  the  question  whether  or  not  a  con- 
tractual obligation  is  essential. 

Other  authorities  say  that  it  is  immaterial  to  the  offerer  that  the 
person  doing  that  which  the  offer  calls  for  did  not  know  of  its 
existence ;  that  the  services  are  as  valuable  to  him  when  rendered 
without,  as  when  rendered  with,  knowledge.  Dawkins  v.  Sap- 
pington,  26  Ind.,  199;  Auditor  v.  Ballard,  9  Bush.,  572,  15  A.  R., 
728.  But  the  value  to  the  offerer  of  the  acts  done  by  the  other 
party  is  not  the  test.  .  .  .  He  is  responsible,  if  at  all,  because 
by  his  promise  he  has  induced  the  other  to  do  the  specified  things. 
Without  the  legal  obligation  thus  arising  from  contract, 
there  is  nothing  which  the  law  enforces. 

Reasons  have  also  been  put  forward  of  a  supposed  public  pol- 
icy, assuming  that  persons  will  be  stimulated  by  the  enforcement 
of  offers  of  "rewards  in  such  cases  to  aid  in  the  detection  of  crime 
and  the  arrest  and  punishment  of  criminals.  .  .  .  Courts  can  en- 
force only  liabilities  which  have  in  some  way  been  fixed  by  law. 
While  we  have  seen  no  such  distinction  suggested,  it  may  well  be 
supposed  that  a  person  might  become  legally  entitled  to  a  reward 
for  arresting  a  criminal,  although  he  knew  nothing  of  its  having 
been  offered,  where  it  is  or  was  offered  in  accordance  with  law 
by  the  government.  A  legal  right  might  in  such  a  case  be  given 
by  law  without  the  aid  of  contract.  But  the  liability  of  the  indi- 
vidual citizen  must  arise  from  a  contract  binding  him  to  pay.  The 
question  is  answered  in  the  affirmative. 

For  further  discussion,  see  Comrs.  v.  Davis,  162  Ind.,  60,  1  Ann. 
Cas.,  282,  and  note;  Smith  v.  Vernon  Co.,  188  Mo.,  501.  /0  L.  R.A., 
59-  the  service  must  he  performed  by  the  claimant.  Curne  v.  bwindall, 
33l_331;  McGraughry  v.  King,  147  Fed.,  463.  7  I..  R.  A  (X.  S.),  216, 
8  \nn  Cas.,  856.  It  is  not  necessary  to  give  notice  of  the  acceptance, 
s:nce  performance  is  acceptance.     Rief  v.  Paige,  55  \\  is.,  496,  4_  A.    K., 

731.  ,  .         ,  .  ■ 

\  person  acting  as  an  officer  in  making  the  arrest  can  not  claim 
the  reward.  Malpass  v.  The  Governor  70— 130;  Hayden  v.  Songer, 
56  Ind  42  26  A.  R..  1;  Bank  v.  Edmund  76  Ohio  St.,  306,  81  N.  E.  641, 
11  L  R  A.  (N.  S.),  1170.  10  Ann.  Cas..  726:  7  A.  &  E.  Enc.  136;  24 
[bid  °41-  9  Cyc  225;  34  Cyc.  1730;  Rewards,  Cent.  Dig.,  sees.  4-14; 
Dec  Dig  sees.  7.  11.  In  X.'  C.  hv  the  Act-  of  1"13,  ch.  132,  an  officer 
is  entitled  to  the  reward,  if  the  crime  for  which  the  arrest  was  made 
was   not   committed   within   his   county. 


OFFER    AND    ACCEPTANCE.  63 

Offers  of  reward,  like  other  offers,  may  be  revoked  before  accept- 
ance, and  such  revocation  may  be  in  the  same  way  in  which  the  offer 
was  made,  or  bv  lapse  of  time.  Mitchell  v.  Abbott.  86  Me..  338.  29 
Atl.J  1118,41  A.  S.  R..  559,  25  L.  R.  A.,  503;  Shuey  v.  U.  S.,  92  U.  S..  73. 

2.    AUCTIONS. 

(29)  TILLMAN  v.  DUX  MAX. 
114  Ga,  406,  40  S.  E.,  244,  88  A.  S.  R.,  28.  57  L.  R.  A..  784—1901. 

The  plaintiff  claimed  certain  land  under  an  auction  sale  by  the 
defendant,  in  which  the  plaintiff  had  the  highest  bid,  but  the  de- 
fendant refused  to  accept  it  and  withdrew  the  land  from  sale. 

Little,  J.  .  .  .  The  questions  to  be  determined  in  this  case  are, 
whether  an  executor  has  the  right  to  withdraw  property  from  sale, 
after  it  has  been  duly  advertised  and  offered  for  sale  at  public 
outcry  by  an  auctioneer  employed  by  the  executor,  and  bids  are 
received  and  cried,  before  the  same  is  knocked  off  to  the  highest 
bidder;  and  whether  the  highest  bidder  in  such  a  case  acquires  any 
right,  by  reason  of  his  bid,  to  compel  the  executor  to  accept  the 
same  and  make  him  a  deed  upon  tender  of  the  amount  so  bid. 
As  a  decision  of  these  two  questions  is  controlled  bv  the  same 
principle  of  law.  they  will  be  considered  together.  It  is  well-rec- 
ognized law  that  a  bidder  at  an  auction  sale  may  withdraw  his 
bid  even  after  it  has  been  cried,  at  any  time  before  the  hammer 
falls  or  the  property  is  knocked  off  to  him.  Payne  v.  Cave.  3 
T.  R..  148;  3  A.  &  E.  Enc,  501,  and  cases  there  cited.  In  Payne 
v.  Cave,  the  principle  underlying  this  rule  is  thus  stated:  "The 
auctioneer  is  the  agent  of  the  vendor,  and  the  assent  of  both  par- 
ties is  necessary  to  make  the  contract ;  that  is  signified  on  the  part 
of  the  seller  by  knocking  down  the  hammer.  .  .  .  Every  bidding  is 
nothing  more  than  an  offer  on  one  side,  which  is  not  binding  on 
either  side  till  it  is  assented  to."  For  the  same  reason  the  seller 
has  the  right  to  withdraw  the  property  before  it  is  knocked  off  to 
the  bidder.  Air.  Story,  in  his  treatise  on  the  Law  of  Sales,  sec. 
461,  states  the  rule  thus:  "In  a  sale  by  auction  the  seller  may 
withdraw  the  goods,  or  the  bidder  may  retract  his  bid,  at  any  time 
before  they  are  knocked  off ;  for  so  long  as  the  final  consent  of 
both  parties  is  not  signified  by  the  blow  of  the  hammer,  there  are 
only  mutual  propositions,  but  no  mutual  agreement  to  one  definite 
proposition."  Kent.  Com..  537:  Carryolles  v.  Mossy,  2  La.,  504. 
But  it  is  claimed  that  this  rule  of  auction  sales  does  not  apply  to 
sales  by  administrators  and  executors,  as  they  are  regulated  by 
statute,  which  must  be  strictly  complied  with.  .  .  .  There  is  a  close 
resemblance  between  an  executor's  or  administrator's  sale,  when 
made  under  an  order  of  court,  to  one  made  under  an  execution 


64  FORMATION    OF    CONTRACT. 

or  decree,  or  other  compulsory  process.  .  .  .  But  granting,  for  the 
sake  of  argument,  that  the  sale  in  question  rested  upon  the  same 
footing  with  judicial  sales,  we  find  that  it  has  been  determined 
that  an  officer  of  court  has  a  right  to  withdraw  property,  even 
when  offered  for  sale  under  compulsory  process,  and  bids  have 
been  received  and  cried ;  and  that  the  bidder  at  such  a  sale  acquires 
no  right  to  compel  the  officer  to  convey  the  property,  even  where 
his  bid  is  the  best  and  highest,  unless  the  property  is  knocked  off 
to  him  or  the  hammer  falls,  and  the  sale  is  thus  completed.  [Cit- 
ing Freeman  on  Executions,  sec.  288,  p.  1665;  Miller  v.  Law,  10 
Rich.  Eq.,  320,  73  A.  D.,  92 ;  Blossom  v.  R.  R.  Co.,  3  Wall.,  196 ; 
Scales  v.  Chambers,  113  Ga.,  920,  39  S.  E.,  396.]  ...  It  would, 
therefore,  seem  that  even  if  the  rule  governing  judicial  sales  is  to 
be  applied  to  the  sale  by  the  executors  in  the  present  case,  they 
had  the  right  to  withdraw  the  property  from  sale;  and  that  Till- 
man, by  reason  of  being  the  highest  and  best  bidder  at  such  sale, 
acquired  no  right  to  compel  a  conveyance  by  the  executors,  as  the 
property  was  withdrawn  before  the  same  was  knocked  off  to  him 
by  the  auctioneer,  for  the  reason  that  there  was  no  acceptance  of 
his  offer,  and  no  contract.     .     .     . 

See  Anderson  v.  Wis.  Cent.  R.  R.,  107  Minn.,  296,  120  N.  W.,  39  20 
L  R  A.  (N.  S.),  1133;  131  A.  S.  R.,  462,  16  Ann.  Cas.,  379;  4  Cyc,  1044; 
1  Parsons  Cont.,  517;  2  R.  C.  L.,  1122;  Auctions,  Cent.  Dig.,  sees.  20, 
24"  Dec.  Dig.    sec.  7. 

A  having  the  hiring  of  certain  slaves,  appointed  B  as  auctioneer  to 
make  such  hiring  publicly  to  the  highest  bidder.  A  did  not  intend  to 
accept  any  bid  from  C,  because  of  his  character  as  a  master,  but  failed 
to  notify  B.  C  became  the  highest  bidder,  and  upon  his  complying 
with   the  terms   of  hiring  the   contract  was   complete.     Ricks   v.    Battle, 

29—269.  ..    -     , 

The  auctioneer  is  an  agent  with  sufficient  power  to  bind  the  parties 
under  the  Statute  of  Frauds.  Proctor  v.  Finley,  119—536.  But  m  a 
sale  under  order  of  court,  the  bid  is  only  an  offer  to  buy,  and  confers 
no  rights  until  accepted  and  sanctioned  by  the  court.  Mebane  v. 
Mebane,  80—34;  Dula  v.  Seagle,  98—458.  If  the  bidder  fails  to  comply 
with  his  bid,  and  there  is  another  sale,  he  is  not  released,  but  may 
be  held  for  the  difference  in  price  and  the  expense.  Petillo,  ex  parte, 
80—50;  Love  v.  Harris,  156—88. 

Sec.  5.    The  agreement  must  be  intended  to  affect  legal  rela- 
tions. 

1.      Gratuitous    service. 

(30)  EVERITT  v.  WALKER. 

109  N.   C,   129,   13  S.   E.,  860—1891. 

This  was  a  civil  action  to  recover  for  services  rendered  under 
the  following  circumstances  alleged  in  the  complaint:  The  plain- 
tiff is  the  sister  of  Mary  C.  Walker,  who  died  in  1880,  leaving  a 


OFFER    AND    ACCEPTANCE.  65 

child  of  tender  years.  The  father,  C.  C.  Walker,  was  insane.  On 
her  deathbed  Mary  C.  Walker  requested  the  plaintiff  to  care  for 
and  support  the  child ;  plaintiff  told  her  that  she  would  do  so,  and 
she  has  supported  the  child  since  the  mother's  death.  She  tried 
to  get  other  relatives  to  help,  but  failed,  and  but  for  her  assistance 
the  child  would  have  become  a  county  charge.  Afterwards  the 
father,  C.  C.  Walker,  became  in  some  way  entitled  to  property 
worth  about  $6,000,  and  a  Trust  Company  was  appointed  his  guar- 
dian and  took  charge  of  the  property.  The  plaintiff  sues  the 
father  and  the  Trust  Company  for  about  $1,300  for  taking  care 
of  the  child. 

The  defendants  demurred  to  the  complaint,  on  the  ground  that 
it  did  not  state  a  cause  of  action:  1.  Because  it  appears  that 
there  was  no  contract,  express  or  implied,  on  the  part  of  de- 
fendant. 2.  Because  it  appears  that  plaintiff  took  care  of  the  child 
out  of  pure  benevolence. 

The  demurrer  was  overruled,  and  the  defendants  appealed. 

Merrimon,   C.   J.     We  think   the  court   should  have   sustained 
the  demurrer,  upon  the  general  ground  that  the  complaint  fails  to 
state    facts   sufficient   to   constitute   a   cause   of   action.      It   is   not 
alleged  that  defendant,  Walker,   employed  the  plaintiff  to   do  the 
service  for  his  child   for  which  she  claims  compensation,  or  that 
he  promised  expressly,  or  by  implication,  to  pay  her  for  the  same; 
nor   are    facts   alleged   upon   which   the   law   implies   this    liability 
and  obligation  to  pay  therefor.     It  is  not  alleged  that  the  father 
abandoned  or  neglected  his  child ;  that  he  would  not,  or  could  not, 
protect  and  provide  for  and  support  her;  or  that  he  knew  of,  rec- 
ognized,  approved  of   and  accepted  the  services   of  the  plaintiff; 
that  he  was  so  in  default,  or  promised  to  pay  for  the  plaintiff's 
services,  is  left  to  mere  inference  and  remote  implication.     If  it  be 
granted  that  a  father  is  legally  bound  to  provide  for,  protect  and 
support  his  child,  it  must  be  alleged,  in  a  case  like  this,  that  he 
failed  to  do  so,  or  that  he  promised  expressly,  or  by  clear  implica- 
tion, to  pay  for  the  services  for  which  compensation  is  demanded. 
The   facts   stated  in  the   fourth   paragraph   of   complaint  are  too 
indefinite,  indirect  and  inconclusive  to  constitute  or  be  treated  as 
a  substitute  for  a  material  part  of  the  allegation  of  a  cause  of 
action.     (This  refers  to  the  allegation  that  she  could  not  get  help, 
etc.)      Moreover,  it  appears   from  the  complaint  that  at  the  time 
the  services  were  rendered,  the  father  was  insane  and  an  inmate 
of    the    insane   asylum,    and,    at    least,    prima   facie,    incapable    of 
promising  to  pay  the  plaintiff  for  her  services. 

Besides,  it  appears  from  the  complaint  that  the  plaintiff  cared 
for  and  supported  the  child  of  her  sister  at  the  latter's  request, 
made  shortly  before  she  died,  as  a  work  of  benevolence  and  char- 


66  FORMATION    OF    CONTRACT. 

ity,  for  which  she  made  no  charge  and  expected  no  pecuniary  com- 
pensation. She  promised  her  sister  not  simply  to  care  for,  but  to 
care  for  and  support  her  child ;  she  said  nothing  of  compensation 
at  the  time  she  made  the  promise,  or  at  any  time  afterwards,  until 
she  brought  this  action,  so  far  as  appears.  She  does  not  allege  or 
intimate  that  she  charged  the  father  for  her  services,  or  that  she 
expected  compensation  from  him.  It  seems  that,  at  first,  the 
father  was  poor  and  insane ;  that  afterwards,  in  some  way,  he 
came  to  have  property,  and  the  plaintiff  then,  and  not  until  then, 
determined  to  ask  for  the  compensation  she  seeks  to  recover  by 
this  action.  This  she  can  not  do.  She  could  not  support  the 
child  from  motives  of  charity  and  love  for  her  departed  sister 
without  any  intention  of  charging  the  father  for  the  same,  and 
afterwards,  when  he  came  to  be  the  owner  of  property,  compel 
him  to  pay  her  for  her  good  work  of  love  and  charity.  She  had, 
in  such  case,  no  valid  claim  at  law  or  in  equity.  Univ.  v.  Mc- 
Nair,  37  N.  C,  605;  Hedrick  v.  Wagoner,  53  N.  C,  360;  Miller 
v.  Lash,  85  N.  C,  54 ;  Young  v.  Herman,  97  N.  C,  280. 

There  is  error.  The  order  overruling  the  demurrer  must  be 
reversed,  and  the  case  disposed  of  according  to  law.  To  that  end 
let  this  opinion  be  certified,  etc. 

AvERY,  J.,  dissented. 

If  the  agreement  refers  only  to  social  relations,  it  is  no  contact.  Clark 
Cont.,  40;  1  Page  Cont.,  sec.  24;  9  Cyc,  273. 

2.  Pretended    consent. 

(31)   DEVRIES  v.  HAYWOOD, 

64  N.  C,  83—1870. 

This  was  an  attachment  levied  on  goods,  and  an  interplea  by  the 
defendant. 

The  plaintiff  levied  on  certain  goods  as  the  property  of  one 
Phillips,  and  the  defendant  claimed  the  goods  by  virtue  of  a  bill 
of  sale  from  Phillips.  The  plaintiff  resisted  the  right  of  the  de- 
fendant to  interplead,  on  two  grounds:  1.  That  the  bill  of  sale 
was  fraudulent.  2.  If  not  fraudulent,  that  Haywood  had  parted 
with  his  title  to  one  Jernigan,  before  the  levy.  Haywood  denied 
that  there  was  any  sale  to  Jernigan,  but  alleged  that  it  was  only 
a  sham  to  keep  the  sheriff  from  seizing  the  goods.  There  was  a 
verdict  and  judgment  for  the  defendant,  and  plaintiff  appealed. 

Reade,  J.  It  is  not  controverted  that  the  goods  levied  on  as  the 
property  of  the  debtor,  Phillips,  were  his  property  a  short  time 
before  the  levy ;  nor  is  it  controverted  that,  before  the  levy,  Phil- 
lips had  sold  the  goods  to  the  party  interpleading,  Haywood ;  nor 


OFFER    AND    ACCEPTANCE.  67 

that  Haywood  had  the  right  to  interplead,  provided  the  property 
in  the  goods  remained  in  him.  But  the  plaintiff  alleges  that  Hay- 
wood had  sold  the  goods  to  one  Jernigan,  and  thereby  lost  his  right 
to  be  heard.  If  this  were  the  state  of  facts,  the  present  is  a  fruit- 
less controversy;  for  whoever  succeeds,  the  property  will  remain 
Jernigan's,  and  the  costs  are  the  only  matter  of  interest.  The 
question  is,  did  Haywood  sell  to  Jernigan?  and  in  this  issue  the 
burden  of  proof  is  on  the  plaintiff. 

The  plaintiff  offered  evidence  tending  to  show  a  sale  from  Hay- 
wood to  Jernigan,  i.  e.,  that  Haywood  said  he  had  sold  them,  and 
Jernigan  said  he  had  bought  them ;  and  there  was  evidence  tending 
to  show  a  delivery.  Haywood  offered  evidence  tending  to  show 
that  there  was  no  sale,  and  that  whatever  was  said  or  done  which 
had  the  appearance  of  a  sale,  was  a  mere  contrivance  between  him- 
self and  Jernigan  to  "save  the  goods,"  and  to  keep  the  sheriff  from 
seizing  his  goods  as  the  property  of  Phillips.  Under  this  con- 
flicting evidence,  His  Honor  left  it  with  the  jury  to  say  what  was 
the  true  character  of  the  transaction  between  Haywood  and  Jerni- 
gan ;  explaining  to  them  that  if  the  parties  intended  a  sale,  it  was 
a  sale,  and  passed  the  title  to  Jernigan ;  but  if  it  was  only  a  sham 
or  contrivance  to  deceive  the  sheriff,  and  prevent  him  from  taking 
Haywood's  property  for  Phillips's  debt,  it  could  not  be  a  sale.  We 
think  that  instruction  was  right. 

The  plaintiff  then  asked  for  special  instructions  to  the  effect 
that  if  the  testimony  of  the  plaintiff's  witnesses  was  believed,  there 
was  a  sale  from  Haywood  to  Jernigan,  without  regard  to  the  in- 
tention of  the  parties.  His  Honor  gave  the  instructions  with  the 
qualification,  that  the  facts  were  sufficient  in  form  to  constitute  a 
sale,  if  it  was  the  intention  of  the  parties  that  they  should ;  other- 
wise, there  was  no  sale.  The  question  intended  to  be  presented 
is,  whether,  when  the  words  and  acts  of  the  parties  are  sufficient 
in  form  to  make  a  contract,  if  so  intended,  the  intention  can  be 
shown  to  be  variant  from  the  ordinary  meaning  of  the  zvords  and 
acts.  A  contract  is  the  agreement  of  two  minds ;  the  understand- 
ing and  intention  of  the  parties  are  the  very  gist  of  the  matter. 
What  was  the  agreement,  the  understanding,  the  intention,  is  al- 
ways a  question  for  the  jury — whilst  the  legal  effect  of  the  agree- 
ment is  a  question  for  the  court.  In  other  words,  the  terms  must 
be  agreed  upon  by  the  parties  or  found  by  the  jury,  and  then  they 
are  to  be  construed  by  the  court.  In  our  case  the  terms  were  not 
agreed  upon;  (indeed,  it  was  not  agreed  that  there  was  any  con- 
tract at  all)  ;  and  therefore  it  was  properly  left  to  the  jury.  This 
would  be  true  even  if  Jernigan  were  attempting  to  set  up  the  con- 
tract.    But  he  is  not.     The  plaintiff  is  in  the  predicament  of  try- 


68  FORMATION    OF    CONTRACT. 

ing  to  set  up  a  contract  between  other  parties,  when  both  parties 
deny  that  there  was  any  contract  between  them. 

It  was  also  contended  by  the  plaintiff,  that  inasmuch  as  Hay- 
wood had  told  the  sheriff  that  he  had  sold  the  goods  to  Jernigan, 
and  had  deceived  the  sheriff,  he  was  now  estopped  to  deny  it.  It 
may  be  that  if  Haywood  had  told  the  sheriff  that  the  goods  were 
the  property  of  Phillips,  and  the  sheriff  had  been  deceived  thereby, 
and  levied  on  them  as  the  property  of  Phillips,  Haywood  would 
have  been  estopped  to  deny  the  title  of  Phillips,  to  the  injury  of 
the  sheriff  or  the  plaintiff,  whom  he  had  deceived.  But  the  sheriff 
was  pursuing  the  goods  as  the  property  of  Phillips,  and  was  not 
prevented  or  deceived  by  Haywood  in  that  regard ;  and  the  fact 
that  he  told  a  falsehood,  if  he  did,  in  regard  to  his  transaction 
with  Jernigan,  in  no  way  affected  the  sheriff  or  the  plaintiff.  Wal- 
lis  v.  Truesdell,  6  Pick.,  455. 

Again,  it  was  insisted  by  the  plaintiff,  that  Haywood  could  not 
claim  the  property,  because,  according  to  his  own  showing,  the 
transaction  between  him  and  Jernigan  was  a  sham,  a  fraud,  and 
that  the  maxim  applies,  ex  turpi  causa  non  oritur  actio. 

The  answer  is  that  Haywood  claims  nothing  under  that  transac- 
tion, but  claims  against  it,  whatever  it  was,  and  under  his  pur- 
chase from  the  debtor,  Phillips,  which  was  found  to  be  fair. 

Again,  it  was  contended  by  the  plaintiff,  that  the  effect  of  the 
fraudulent  transaction  between  Haywood  and  Jernigan  was  to  pass 
the  title  to  Jernigan  as  against  Haywood,  whatever  might  have 
been  its  effect  as  to  others.  Waiving  whatever  objection  there  may 
be  to  the  right  of  the  plaintiff  to  avail  himself  of  a  transaction  like 
the  one  in  question,  in  which  he  has  no  interest,  when  neither  of 
the  parties  seeks  to  set  it  up,  the  answer  is  that  the  jury  have 
found  that  there  was  no  transaction,  fraudulent  or  other,  by  which 
the  parties  intended  to  pass  the  title  out  of  Haywood  to  Jernigan. 
If  so,  of  course,  there  was  no  sale,  as  there  can  be  no  contract 
against  the  intention  of  the  parties.  The  admission  of  evidence 
to  show  title,  does  not  contravene  the  rule  that  words  and  acts, 
nothing  else  appearing,  are  to  be  understood  in  their  ordinary  ac- 
ceptation, or  the  rule  that  when  the  terms  are  ascertained,  the 
legal  effect  is  a  question  for  the  court. 

There  is  no  error.  Judgment  affirmed. 

If  the  whole  transaction  was  in  the  nature  of  a  joke  or  banter,  no 
contract  exists.  Keller  v.  Holderman,  11  Mich.,  248,  83  A.  D.,  737; 
Theiss  v.  Weiss,  166  Pa.  St.,  9,  31  Atl.,  63,  45  A.  S.  R..  638;  McClurg 
v.  Terry,  21  N.  J.  Eq.,  225;  Lutz  v.  Yount,  61—367;  9  Cyc,  276;  Page 
Cont,  sec.  24. 


OFFER    AND    ACCEPTANCE.  69 


Sec.  6.    The  agreement  must  be  complete. 

1.  Invitation  to  deal. 

(32)  CHEROKEE  TANNING  CO.  v.  TELEGRAPH  CO., 
143  N.  C,  376,  55  S.  E.,  777,  118  A.  S.  R.,  806—1906. 

This  was  a  civil  action  for  damages  alleged  to  have  been  sus- 
tained by  the  plaintiff  through  negligence  of  the  defendant  in  fail- 
ing to  transmit  and  deliver  promptly  a  certain  telegram.  From  a 
judgment  for  the  plaintiff,  the  defendant  appealed. 

Brown,  J.  There  is  no  dispute  as  to  the  material  facts.  The 
evidence  shows  that  on  November  7,  1903,  an  agent  of  the  Stand- 
ard Oil  Company  at  Wilmington,  N.  C,  wrote  to  the  plaintiff,  at 
Andrews,  N.  C,  a  letter  containing,  among  other  things,  this  re- 
quest: "Kindly  advise  us  by  wire  Monday  if  you  can  use  about 
1,500  creosote  barrels  between  now  and  January  1st,  at  95  cents 
each,  delivered  in  car-load  lots."  That  the  plaintiff  received  this 
letter  on  Monday,  November  9,  and  at  7 :30  p.  m.  of  that  day  filed 
with  the  defendant,  at  its  Andrews  office,  a  message  addressed  to 
the  Standard  Oil  Company,  Wilmington,  N.  C,  and  reading  as 
follows:  "We  accept  your  offer  1,500  barrels  as  per  yours  of  the 
7th."  This  message  was  delivered  to  the  sendee  at  10:36  a.  m., 
November  10.  At  the  same  time  it  wrote  to  plaintiff,  the  Oil 
Company  addressed  a  similar  letter  to  the  Brevard  Tanning  Com- 
pany and  others.  The  latter  company  purchased  the  barrels  by 
telegram  received  by  the  Oil  Company  shortly  before  plaintiff's 
message.  The  plaintiff  claims  substantial  damages.  Defendant 
requested  the  court  to  charge  that  plaintiff  was  entitled  to  recover 
nominal  damages  only,  to  wit,  the  price  paid  for  the  telegram. 
We  think  this  instruction  should  have  been  given. 

Damages  are  measured  in  matters  of  contract  not  only  by  the 
well-known  rule  laid  down  in  Hadley  v.  Baxendale,  9  Exch..  341, 
but  they  must  not  be  the  remote,  but  the  proximate  consequence 
of  a  breach  of  contract,  and  must  not  be  speculative  or  contingent. 
Unless  the  reply  of  plaintiff  by  wire  to  the  letter  of  the  Oil  Com- 
pany created  a  contract  between  the  two  for  the  sale  and  delivery 
of  1,500  barrels  at  95  cents  each,  the  plaintiff  can  recover  only 
nominal  damages,  for  any  other  damages  would  be  necessarily 
purely  speculative  or  contingent.  The  language  of  Brannon,  J., 
in  a  similar  case  in  West  Virginia  is  appropriate  to  this :  "But 
the  trouble  facing  the  plaintiff  in  this  case  is  that  there  was  no 
final  contract  between  the  parties,  but  only  a  proposal  for  a  con- 
tract, and  there  can  be  no  contract  without  both  a  proposal  and 
its    acceptance.      The    failure    of   the   telegraph    company    did   not 


70  FORMATION    OF    CONTRACT. 

cause  the  breach  of  a  consummate  contract ;  it  only  prevented  one 
that  might  or  might  not  have  been  made."  Beatty  v.  Telegraph 
Co.,  44  S.  E.  Rep.,  309.  See  also  Hosiery  Co.  v.  Telegraph  Co., 
51  S.  E.  R.,  290,  and  Wilson  v.  Telegraph  Co.,  52  S.  E.  R.,  153. 
The  offer  must  be  distinct  as  such  and  not  merely  an  invitation  to 
enter  into  negotiations  upon  a  certain  basis.  Wire  Works  v.  Sor- 
rell,  142  Mass.,  442;  Beaupre  v.  Telegraph  Co.,  21  Minn.,  155; 
24  Am.  &  Eng.  Encyc,  1029,  and  cases  cited. 

Again,  the  offer  must  specify  the  specific  quantity  to  be  fur- 
nished, as  a  mere  acceptance  of  an  indefinite  offer  will  not  create 
a  binding  contract.  McCaw  Mfg.  Co.  v.  Felder,  115  Ga.,  408;  24 
Am.  &  Eng.  Encyc,  1030,  note  1,  and  cases  cited.  "The  offer 
must  be  one  which  is  intended  of  itself  to  create  legal  relations  on 
acceptance.  It  must  not  be  an  offer  merely  to  open  negotiations 
which  will  ultimately  result  in  a  contract."  1  Page  on  Cont,  sec. 
26,  and  cases  cited ;  Clark  on  Cont.,  sec.  26. 

In  Moulton  v.  Kershaw,  59  Wis.,  316,  the  defendants  wrote  to 
the  plaintiffs  as  follows:  "In  consequence  of  a  rupture  in  the  salt 
trade,  we  are  authorized  to  offer  Michigan  fine  salt  in  full  car-load 
lots  of  80  to  75  barrels,  delivered  at  your  city  at  85  cents  per 
barrel  to  be  shipped  per  C.  &  N.  W.  R.  R.  Co.  only.  At  this 
price  it  is  a  bargain,  as  the  price  in  general  remains  unchanged. 
Shall  be  pleased  to  receive  your  order."  The  plaintiff  at  once 
telegraphed  the  defendant :  "Your  letter  of  yesterday  received  and 
noted.  You  may  ship  me  two  thousand  barrels  Michigan  fine  salt 
as  offered  in  your  letter."  The  defendant  declined  to  deliver  the 
salt,  and  plaintiff  sued  for  damages.  The  Supreme  Court  of  Wis- 
consin, sustaining  a  demurrer  to  the  complaint,  held  that  the  com- 
munications between  the  parties  did  not  show  a  contract;  that  the 
letter  of  the  defendant  was  not  such  an  offer  as  plaintiff  could  by 
an  acceptance  change  into  a  binding  agreement.  See  also  Smith 
v.  Gowdy,  90  Mass.,  566. 

The  letter  from  the  Oil  Company  to  the  plaintiff  was  a  mere 
inquiry.  Walser  v.  Telegraph  Co.,  114  N.  C,  440.  It  was  evi- 
dently a  "trade  inquiry"  sent  out  by  the  Oil  Company  to  cus- 
tomers, and  did  not  purport  and  was  not  intended  to  be  a  legal 
offer  binding  on  acceptance.  "Care  should  be  taken  always  not  to 
construe  as  an  agreement  letters  which  the  parties  intended  only 
as  preliminary  negotiations."  Lyman  v.  Robinson,  14  Allen 
(Mass.),  254. 

Again,  the  acceptance  by  the  plaintiff  was  not  in  the  terms  of 
the  offer.  The  acceptance  was  for  1,500  barrels.  The  Oil  Com- 
pany could  not  have  compelled  plaintiff  to  take  a  less  number.  If 
the  plaintiff  regarded  the  Oil  Company's  letter  as  a  valid  offer,  it 
should  have  replied  that  it  would  take  what  barrels  the  Oil  Com- 


OFFER    AND    ACCEPTANCE.  71 

pany  had,  not  exceeding  1,500,  as  that  company  had  offered  no 
exact  specific  number.  "The  acceptance  to  bind  the  other  party, 
must  be  unconditional  and  unqualified  and  must  correspond  ex- 
actly to  the  terms  of  the  offer."  24  Am.  &  Eng.  Encyc,  1031, 
1032,  and  cases  cited;  1  Parsons  Cont.,  476,  477.  As  the  plain- 
tiff's message  to  the  Oil  Company  seasonably  delivered  would  not 
of  itself  have  effected  a  legal  contract  between  the  plaintiff  and 
the  Oil  Company  for  the  delivery  of  1,500  barrels  at  95  cents  each, 
it  follows  that  any  other  than  nominal  damages  would  be  purely 
speculative.  The  Oil  Company  might  have  delivered  the  barrels, 
and  then  again  it  might  not  have  done  so.  It  might  have  deliv- 
ered 1,500,  and  again  it  might  have  delivered  a  much  less  number. 
Its  letter  specified  no  exact  number,  and  it  was  under  no  legal 
compulsion  to  deliver  any. 

As  the  defendant  manifests  its  willingness  to  pay  nominal  dam- 
ages, it  is  unnecessary  to  consider  the  exceptions  to  His  Honor's 
rulings  on  the  issue  of  negligence.  We  award  a  new  trial  upon 
the  second  issue  relating  to  the  damages. 

Partial  new  trial. 

What  may  constitute  an  offer  which  by  acceptance  may  be  con- 
verted into  a  contract,  and  not  a  mere  preliminary  step,  notice  or 
invitation,  is  not  easily  determined,  and  must  depend  upon  the  partic- 
ular circumstances  of  each  case.  Cedar  Rapids  Lumber  Co.  v.  Fisher, 
129  Iowa,  332,  105  N.  W.,  595,  4  L.  R.  A.  (N.  S.),  177;  6  R.  C.  L.,  601; 
Pollock  Cont.,  15,  16;  9  Cyc,  278;  7  A.  &  E.  Enc,  138. 

Public  contracts  to  the  lowest  bidder. — In  such  cases,  the  right  to 
reject  all  bids  is  usually  reserved;  but  when  this  is  not  done,  the  fact 
that  one  has  made  the  lowest  bid  does  not  entitle  him  to  the  contract. 
in  the  absence  of  statutory  requirements  or  other  circumstances  show- 
ing a  complete  contract.  Sanderlin  v.  Luken,  152 — 738;  Hardison 
v.  Reel,  154 — 273;  Printing  Co.  v.  Hoey,  124—767;  Anderson  v.  Bd.  of 
Pub.  Schools,  122  Mo.,  61,  27  S.  W.,  610.  26  L.  R.  A.,  707;  Erving  v. 
New  York,  131  N.  Y.,  133,  29  N.  E.,  1101;  Dillingham  v.  Spartanburg, 
75  S.  C,  549,  56  S.  E.,  381,  9  Ann.  Cas.,  829;  Butler  v.  Darst,  68  W.  Va., 
493,  70  S.  E.,  119.  38  L.  R.  A.  (N.  S.),  653;  28  Cyc,  661,  1030;  20  A.  & 
E.  Enc,  1169;  6  R.  C.  L.,  601;  Contracts,  Cent.  Dig.,  sees.  112-118; 
Dec.  Dig.,  sec.  17. 

2.   Incomplete   negotiations. 

(33)  EDMONDSON  v.  FORT, 
75    N.    C,    404—1876. 

This  was  a  civil  action  for  the  recovery  of  the  price  of  a  steam 
sawmill  which  was  destroyed  by  fire.  The  facts  appear  in  the 
opinion.  Judgment  was  rendered  for  the  plaintiff,  and  the  de- 
fendant appealed.  Reversed. 

Pearson,  C.  J.  .  .  .  The  jury  find  that  "the  steam  sawmill"  was 
not  "sold  and  delivered"  by  the  plaintiffs  to  defendant ;  in  other 
words,  there  was  no  executed  contract  and  no  delivery,  either  ac- 


72  FORMATION    OF    CONTRACT. 

tual  or  constructive,  by  which  the  ownership  of  the  mill  passed  to 
the  defendant.  But  they  find  that  there  was  a  contract  by  the 
plaintiffs  to  sell  the  mill  to  the  defendant  at  the  price  of  $779.42, 
and  a  time  and  place  for  completing  said  contract  was  designated 
by  the  parties. 

The  case  turns  upon  the  construction  of  this  finding.  Does  it 
mean  the  parties  came  to  a  positive  and  definite  agreement,  and 
"the  bargain  was  struck,"  which,  we  are  told  by  Blackstone,  was 
in  old  time  signified  by  shaking  hands,  a  deed  or  solemn  act  about 
which  there  could  be  no  mistake,  which  relieved  the  matter  from 
all  doubt,  so  that  a  time  and  place  was  designated  for  the  mere 
purpose  of  carrying  the  bargain  into  effect ;  or  does  it  mean  by  the 
words,  "completing  the  contract,"  the  parties  chaffered  about  the 
sale  of  the  mill  for  $779.42,  in  other  words,  talked  about  making 
a  trade  and  fixed  a  time  and  place  for  meeting  in  order  to  com- 
plete, that  is,  close  the  trade? 

If  the  former  was  the  meaning,  then  the  apt  and  proper  finding 
would  have  been,  the  parties  designated  a  time  and  place  for  meet- 
ing in  order  to  execute  the  contract,  and  His  Honor  would  have 
had  the  verdict  so  expressed,  but  the  finding  is,  a  time  and  place 
was  designated  for  the  parties  to  meet  and  complete  the  contract, 
that  is,  to  close  the  trade  and  agree  upon  what  was  then  left  open 
in  order  to  fix  the  terms  of  the  contract.  If  the  latter  is  the  true 
construction — and  we  think  it  is — then  both  of  the  parties  had 
locus  pcnitcntiac  until  the  day  fixed  upon,  and  might  elect  either  to 
close  the  trade  or  abandon  it. 

In  this  view  of  the  matter,  it  is  clear  that  had  the  defendant 
attended  at  the  time  and  place  designated  and  announced  his  elec- 
tion not  to  close  the  trade — that  is,  not  to  complete  the  contract — 
the  plaintiffs  would  have  had  no  cause  of  action  and  no  cause  to 
complain,  except  that  defendant  ought  to  have  saved  them  the 
trouble  of  coming  to  the  place  designated  by  giving  them  notice 
beforehand  of  his  election  not  to  complete  the  contract. 

The  fact  that  defendant  did  not  attend  at  the  time  and  place 
designated  was  just  as  distinct  notice  of  his  election  to  abandon 
the  incomplete  contract  as  if  he  had  kept  his  appointment  and 
made  such  announcement,  and  only  exposed  him  to  the  charge  of 
not  being  a  man  of  his  word  and  a  want  of  punctuality ;  but  it  was 
no  breach  of  contract,  for,  as  we  have  seen,  the  contemplated  con- 
tract had  not  been  completed  and  the  ownership  of  the  property 
was  still  in  the  plaintiffs,  and  the  risk  of  loss  by  fire  or  otherwise 
was  on  them. 

In  Willard  v.  Perkins,  44  N.  C.  253,  "the  bargain  was  struck," 
the  contract  was  completed.  "The  price  was  paid  down,"  and  the 
loss  is  put  on  the  vendee  because  he  was  in  default  in  not  taking 


OFFER    AND    ACCEPTANCE.  73 

away  the  rosin  in  the  time  agreed  on,  which  distinguishes  it  from 
Waldo  v.  Belcher,  33  N.  C,  609,  where  the  purchaser  of  the  corn 
was  in  no  default  for  not  taking  it  away  before  it  was  burnt. 
In  the  view  we  have  taken  of  the  case,  there  is  error.     .     .     . 

LUTZ  v.  THOMPSON, 

87  N.  C,  334,  post  (215). 

Defendant  gave  plaintiff's  agent  an  order  for  goods,  signed  by  one 
partner  but  not  to  be  valid  unless  approved  by  the  other  partner;  the 
other  partner  did  not  approve  it;  and  the  plaintiff  was  notified  not  to 
ship  the  goods;  the  contract  was  incomplete  and  the  plaintiff  could  not 
recover  for  the  goods  shipped.  Pratt  v.  Chaffin,  136 — 350;  Dunlap 
v.  Willett,  153 — 317;  Bowser  v.  Tarry,  156 — 35;  Mercantile  Co.  v. 
Parker,  163—274;  Naested  v.  Scott,  20—524;  Devane  v.  Fewall,  24 — 36; 
Blewitt  v.  Boorum,  142  N.  Y.,  357,  37  N.  E.,  119,  40  A.  S.  R.,  600. 

In  an  application  for  an  insurance  policy  was  this  clause:  "No  insur- 
ance shall  be  in  force  until  the  delivery  of  the  policy  to  and  the  payment 
of  the  first  premium  by  the  party  whose  life  is  insured  in  good  health"; 
the  contract  was  incomplete  until  delivery  and  payment.  Ray  v.  Ins. 
Co.,  126 — 166.  An  insurance  agent  agreed  to  insure  the  life  of  the 
intestate  for  a  premium  of  $50;  the  intestate  paid  $45,  but  no  appli- 
cation was  filled  or  policy  issued;  the  contract  was  incomplete.  Barnes 
v.  Ins.  Co.,  74 — 22;  Whitley  v.  Ins.  Co.,  71—480;  Ormond  v.  Ins.  Co., 
96—158;  Ross  v.  Ins.  Co.,  124—395;  Ray  v.  Ins.  Co.,  126—166;  Perry 
v.  Ins.  Co.,  150 — 143;  Manfg.  Co.  v.  Assurance  Co.,  161 — 88. 

(34)  RANKIN  v.  MITCHEM, 
141  N.  C,  277,  53  S.  E.,  854—1906. 
Action  for  damages  for  an  alleged  breach  of  contract  by  the 
defendant  in  the  purchase  of  100  bales  of  cotton.  The  defendant 
contended,  among  other  things,  that  the  contract  was  not  complete, 
in  that  it  was  to  have  been  put  in  writing  and  signed  by  the  par- 
ties, and  that  was  not  done.  Judgment  for  plaintiff,  and  defend- 
ant appealed.  Affirmed. 

Brown,  J.  .  .  .  The  evidence  for  the  plaintiffs  is  clear  that  a  parol 
contract  was  entered  into  by  the  plaintiffs  on  the  one  part  and  the 
defendant  on  the  other  part,  whereby  plaintiffs  contracted  to  sell 
and  deliver  to  defendant  at  Lowell,  on  February  20,  1905,  100 
bales  of  cotton  at  nine  cents  per  pound,  and  equally  clear  that 
defendant  contracted  to  take  and  pay  for  the  same.  The  proposi- 
tion to  sell  seems  to  have  been  made  by  Rankin,  who  took  Robin- 
son in  as  a  copartner  in  the  transaction,  with  the  consent  of  the 
defendant.  At  the  time  that  defendant  proposed  to  draw  up  the 
contract,  a  complete  verbal  agreement  had  been  made  between  the 
parties,  and  the  contract  was  reduced  to  writing  and  signed  by 
plaintiff  Rankin  and  the  defendant.  The  fact  that  Robinson  did 
not  sign  it  does  not  invalidate  the  oral  or  written  contract.  The 
contract  had  been  fully  completed  between  the  parties,  and  the 
reducing  it  to  writing  was  not  to  make  a  new  or  different  contract, 


74  FORMATION    OF    CONTRACT. 

but  evidently  to  preserve  the  written  evidence  of  what  had  already 
been  assented  to.  The  plaintiff  Robinson  affirmed  what  his  co- 
partner had  done,  for,  according  to  Rankin's  evidence,  Robinson 
was  en  route  to  Charlotte  and  left  Rankin  to  fix  up  the  writing, 
and  told  Rankin  after  he  "got  it  fixed  up  to  phone  him  at  Char- 
lotte and  he  would  buy  the  cotton."  It  seems  to  be  generally  held 
that  a  binding  contract  may  be  made  between  the  parties  although 
there  is  an  understanding  that  it  is  to  be  reduced  to  writing,  which 
writing  is  not  completed  by  the  signatures  of  all  the  parties.  In 
the  case  of  Sanders  v.  Fruit  Co.,  144  N.  Y.,  209,  the  Court  of 
Appeals  of  New  York  said:  "Letters  and  telegrams  which  con- 
stitute an  offer  and  acceptance  of  a  proposition,  complete  in  its 
terms,  may  constitute  a  binding  contract,  although  there  is  an 
understanding  that  the  agreement  must  be  expressed  in  a  formal 
writing,  and  one  of  the  parties  afterwards  refuses  to  sign  such 
agreement  without  material  modification."  Where  the  parties 
orally  agree  upon  the  terms  of  a  contract  and  there  is  complete 
assent  thereto,  the  suggestion  to  put  it  in  writing  at  a  subsequent 
time  is  not  of  itself  sufficient  to  show  that  they  did  not  mean  the 
parol  contract  to  be  complete  and  binding  without  being  put  in 
writing.  The  question  is  largely  one  of  intention.  From  the 
plaintiff's  evidence  it  is  plain  the  parties  intended  to  contract  and 
did  contract  before  the  written  evidence  of  it  was  drawn  up,  and 
that  defendant  afterwards  recognized  the  contract  by  asking  an 
extension  of  time.  The  subject  is  fully  discussed  in  29  L.  R.  A., 
431,  note.  The  court  very  properly  left  it  to  the  jury  to  determine 
whether  the  contract   was   made  between   the   parties   as   alleged. 


If  it  is  the  intention  of  the  parties  to  be  bound  by  the  terms  of  their 
agreement,  and  the  writing  is  only  a  means  of  preserving  or  showing 
it,  the  contract  is  complete;  but  if  they  do  not  intend  to  be  bound 
until  the  writing  is  executed,  the  contract  is  incomplete.  Teal  v.  Tem- 
pleton,  149—32;  Gooding  v.  Moore,  150—195;  Elks  v.  Ins.  Co.,  159—619; 
Steamship  Co.  v.  Swift,  86  Me.,  248,  29  Atl.,  1063,  41  A.  S.  R.,  545; 
Sanders  v.  Pottlitzer  Fruit  Co.,  144  N.  Y.,  209,  39  N.  E.,  75,  43  A.  S.  R., 
757,  29  L.  R.  A.,  431;  Rossiter  v.  Miller,  6  E.  R.  C,  174;  6  R.  C.  L„  618; 
9  Cyc,  280;  Contracts,  Cent.  Dig,  sees.  106-108,  156;  Dec.  Dig.,  sees. 
32,  39. 

Where  a  writing  is  signed  by  one  but  is  not  to  be  binding  until 
signed  by  another,  as  between  the  parties  it  is  not  complete,  but  it 
may  be  valid  in  the  hands  of  an  innocent  third  person.  Cowan  v. 
Roberts,  134 — 415;  Benton  Co.  Sav.  Bank  v.  Boddicker,  105  Iowa,  548,  75 
N.  W.,  632,  45  L.  R.  A.,  321;  Guild  v.  Thomas,  54  Ala.,  414,  25  A.  R., 
703.  Where  it  appears  upon  the  face  of  a  bond  that  it  was  intended 
to  be  signed  by  all  the  parties  whose  names  appear  in  it.  it  is  generally 
held  to  be  incomplete  until  all  sign  it,  unless  there  is  a  waiver  or 
estoppel.  Barnes  v.  Lewis,  73—138;  R.  R.  v.  Kitchin,  91—39;  Bank 
v.  Hunt,  124—171;  Gwyn  v.  Patterson,  72—189;  Sharp  v.  U.  S..  4  Watts 
(Pa.),  21,  28  A.  D.,  676;  Weir  v.  Mead,  101  Cab,  126,  40  A.  S.  R..  46; 
School  Dist.  v.  Lapping,  100  Minn.,  139,  110  N.  W.,  849,  12  L.  R.  A. 
(N.  S.),  1105;  6  R.  C.  L.,  616. 


OFFER    AND    ACCEPTANCE.  75 

3.  The  terms  must  be  certain  and  definite. 

(35)   SILVERTHORN  v.  FOWLE, 
49  N.   C,  362—1857. 

Action  of  assumpsit. — The  plaintiff  declared  on  a  special  con- 
tract made  with  the  defendant,  that  the  latter  was  to  "take  a  raft 
of  timber  at  $7.50  per  thousand,  which  was  to  be  prepared  by- 
plaintiff  in  Germanton  Bay,  and  thence  towed  by  defendant's 
steamer  to  the  town  of  Washington,  and  that  it  was  to  be  ready 
when  corn  was  done."  The  contract  was  made  in  the  month  of 
March.  It  was  proved  that  in  June,  that  is,  before  the  cultivation 
of  the  then  growing  crop  was  finished,  the  defendant  called  for 
the  timber,  but  it  was  not  ready.  It  was  further  proved  that 
about  the  1st  of  July,  as  soon  as  the  growing  crop  was  laid  by, 
the  raft  was  ready  in  the  place  designated.  The  defendant  con- 
tended that  the  meaning  of  the  contract  was,  that  the  raft  was  to 
be  delivered  and  taken,  when  the  planting  of  corn  was  finished. 
The  plaintiff,  on  the  other  hand,  insisted  that  the  true  meaning  of 
the  bargain  was,  that  it  was  to  be  delivered  and  received  as  soon 
as  the  working  of  the  crop  was  done. 

His  Honor  left  it  to  the  jury,  as  a  question  of  fact,  to  find  from 
the  evidence  what  the  sense  of  the  contract  was,  and  whether  the 
plaintiff  had  complied  with  it. 

There  was  a  verdict  and  judgment  for  the  plaintiff,  and  defend- 
ant appealed. 

Nash,  C.  J.  It  is  certainly  true,  that  the  construction  of  a 
contract,  whether  verbal  or  written,  is  a  matter  of  law,  to  be  de- 
cided by  the  court.  Where,  however,  technical,  or  unusual  words, 
are  used,  and  their  meaning  is  to  be  gathered  from  experts,  or 
persons  acquainted  with  the  particular  art  to  which  these  words 
refer,  or  from  authoritative  definitions,  as  there  may  be  conflict- 
ing evidence,  it  may  present  a  question  for  the  jury.  2  Parsons 
on  Cont,  5.  But  where  a  contract  presents  such  a  case  as  may 
require  the  aid  of  a  jury,  the  duty  of  the  jury  is  to  ascertain  the 
meaning  of  the  terms  used,  but  it  is  still  the  duty  of  the  court  to 
decide  the  meaning  of  the  contract.  Hutchison  v.  Banker,  5  Mee. 
and  Wells.  Rep.,  535.  And  if  a  contract  is  so  worded  that  no 
definite  meaning  can  be  attached  to  it,  it  is  the  duty  of  the  court 
so  to  instruct  the  jury.  The  court  is  no  more  at  liberty  to  guess 
what  was  the  meaning  of  the  parties  than  is  the  jury.  In  this  case 
the  jury  ought  to  have  been  instructed  that  the  contract  is  so 
obscurely  worded  that  it  could  not  form  the  basis  of  judicial  ac- 
tion.    It  is  utterly  impossible,  from  the  words  used,  to  say  when 


76  FORMATION    OF    CONTRACT. 

the  lumber  was  to  be  delivered.  The  word  "done"  has  no  specific 
meaning,  except  in  cookery.  Bread  is  said  to  be  done,  and  meat 
done,  when  they  are  sufficiently  cooked  for  use  as  food.  But  when 
is  corn  done?  The  lumber  was  to  be  delivered  "when  corn  was 
done."  "Done"  is  not  a  word  of  art  or  trade,  and  requires  no  ex- 
pert to  tell  us  its  meaning.  The  court  left  the  sense  of  the  con- 
tract to  the  jury  upon  the  words,  and  other  evidence,  as  a  matter 
of  fact.  We  have  seen  that,  in  a  proper  case  for  a  jury,  they  pass 
only  upon  the  meaning,  or  sense  of  the  words  used,  the  duty  of 
expounding  the  contract  still  being  the  duty  of  the  court.  But  the 
jury  were  no  more  competent  to  put  a  construction  upon  the  word 
"done,"  in  the  connection  in  which  it  stands,  than  the  court  was. 
Used  as  it  is  in  this  contract,  it  is  senseless,  and  not  susceptible 
of  explanation.  We  may  guess  at  its  meaning,  but  neither  a 
court  nor  a  jury  are  permitted  to  decide  controversies  by  guessing, 
and  no  man  can  guess,  to  his  own  satisfaction,  what  the  word  here 
means.     Judgment  reversed  and  a  venire  de  novo. 

The  degree  of  uncertainty  which  shall  vitiate  a  deed  (or  other  con- 
tract) must  be  such  that  the  meaning  can  not  be  ascertained, — who, 
for  example,  are  the  contracting  parties,  or  what  is  the  subject  of  the 
contract.  Kea  v.  Robeson,  40—373.  A  contract  which  is  so  uncertain 
in  respect  of  its  subject-matter  that  it  neither  identifies  the  thing  by 
describing  it  nor  furnishes  any  data  by  which  certainty  of  identification 
can  be  attained,  is  void  as  well  at  law  as  in  equity,  and  as  incapable 
of  supporting  an  action  for  damages  as  of  supporting  a  bill  for  specific 
performance.  Ala.  Min.  Land  Co.  v.  Jackson,  121  Ala.,  172,  77  A. 
S.  R.,  46. 

Uncertainty  in  the  sale  of  land.— A  contract  for  the  purchase  of  30  or 
35  acres  of  a  tract  containing  70  acres,  without  saying  where  it  is  to  be 
taken,  is  void  for  uncertainty.  Grier  v.  Rhyne,  69 — 346.  So  also  the 
sale  under  execution  of  3,000  acres  from  a  tract  of  5,000  is  too  indefinite. 
Femberton  v.  McKee,  75—497.  The  description,  "all  of  his  interest 
in  a  piece  of  land  adjoining  the  lands  of  J.  J..  J.  K.,  and  others,"  is 
void  for  uncertainty.  Harrell  v.  Butler,  92—20.  "One  tract  of  land 
lying  and  being  in  the  county  aforesaid,  adjoining  the  lands  of  A  and  B, 
containing  20  acres  more  or  less,"  was  held  to  be  too  indefinite. 
Dickens  v.  Barnes,  79 — 490.  See  also  Harrison  v.  Hahn,  95—28.  But 
in  Farmer  v.  Batts,  83—387,  the  description  "one  tract  containing  193 
acres  more  or  less,  it  being  the  interest  in  two  shares,  adjoining  the 
lands  of  J.  B.,  E.  R.,  and  others,"  was  held  to  be  definite  enough  to 
allow  parol  evidence  to  identify  the  land.  Other  cases  considered  suf- 
ficiently definite,  Reddick  v.  Leggat,  7-539;  Proctor  v.  Pool,  Id— 370; 
Stewart  v.  Salmonds,  79—518;  Cox  v.  Cox,  91—256.  Parol  evidence 
may  be  used  to  "fit  the  description  to  the  thing,"  Perry  v.  Scott,  109— 
374,  and  cases  cited;  Lowe  v.  Harris,  112 — 472;  upon  the  maxim, 
"Id  certnm  est  quod  certum  reddi  potest."  Hemphill  v.  Annis,  119— 
514,  and  cases  cited.  Revisal,  sec.  1605,  authorizing  parol  evidence  in 
such  cases,  if  it  adds  any  new  rule,  is  not  retroactive,  nor  does  it 
repeal  the  Statute  of  Frauds.  Moore  v.  Fowle,  139 — p.  53.  For  other 
instances,  see  Harris  v.  Woodard,  130 — 580;  Cathey  v.  Lumber  Co., 
151 — 592:   Higdon  v.  Howell,  167 — 455;   Patton  v.  Sluder,   167—500. 

Sale  of  trees. — "I  agree  to  sell  to  D.  any  of  my  black  walnut  trees,  not 
exceeding  15  in  number,"  describing  size  and  price,  is  sufficiently  definite 
unless  there  are  more  than  15  trees  filling  the  description.  Dunkart  v. 
Rhineheart,  89—354.     The   sale   of  "nine  walnut   trees"   on   certain  land 


OFFER    AND    ACCEPTANCE.  77 

conveys  no  title  if  there  are  more  than  nine,  unless  they  are  marked  or 
otherwise  separated.  Carpenter  v.  Medford,  99 — 495.  A  deed  conveying 
"portion  of  my  cypress  timber,"  is  void  for  uncertainty.  Mizell  v.  Rufiin, 
113 — 20.  A  sale  of  standing  timber  which  allows  the  purchaser  an  indefi- 
nite time  to  cut  and  remove  the  same  is  void  for  uncertainty.  Mfg.  Co. 
v.  Hobbs,  128 — 46;  Bunch  v.  Lumber  Co.,  134 — 116;  Woody  v.  Timber 
Co.,    141—471. 

Personal  property. — A  mortgage  on  "ten  new  buggies"  out  of  a  larger 
number  on  hand,  is  indefinite  and  conveys  no  title.  Blakeley  v.  Patrick, 
67 — 40.  A  mortgage  on  "a  one-horse  wagon"  where  the  mortgagor  has 
four,  is  void.  Holman  v.  Whitaker,  119 — 113.  A  mortgage  on  "one  bale 
of  good  middling  cotton  that  I  may  make  or  cause  to  be  made  or  grown 
this  year,"  is  void  for  uncertainty  in  that  it  fails  to  designate  the  land 
where  it  is  to  be  grown,  or  to  identify  the  property  so  it  could  be  sep- 
arated. Atkinson  v.  Graves,  91 — 99.  A  mortgage  conveying  "my  entire 
crop  of  every  description,"  is  too  vague  and  indefinite.  Rountree  v.  Vin- 
son, 94 — 104.  So  also,  "all  the  crop  of  corn  and  cotton  raised  by  me  the 
present  year."  State  v.  Garris,  98 — 733;  or  an  agreement  to  release 
"three  bales  of  cotton"  to  be  grown.  McDaniel  v.  Allen,  99—135.  But 
otherwise  in  these  cases,  if  the  land  is  described  on  which  the  crop  is  to 
be  grown.  Woodlief  v.  Harris,  95 — 211;  Harris  v.  Jones,  83 — 317.  A 
mortgage  conveying  "two  horses"  when  the  mortgagor  has  three,  or 
"one  yoke  of  oxen"  when  he  has  more  than  one,  is  too  indefinite.  Spivey 
v.  Grant,  96—214;  otherwise  where  the  mortgagor  has  only  the  number 
mentioned.  Sharp  v.  Pearce,  74 — 600;  Goff  v.  Pope,  83—127;  Lupton  v. 
Lupton,  117 — 30.  Where  the  description  is  sufficient,  but  different  from 
the  actual  condition,  parol  evidence  may  be  used  to  identify  the  property, 
— as  "a  black  horse"  in  a  mortgage  may  be  shown  to  be  "a  dark  chestnut 
horse,"  Hall  v.  Younts,  87 — 291;  or  "one  bay  mule"  to  be  a  black  mule, 
Harris  v.  Woodard,  96 — 232. 

Other  agreements. — "Whereas,  J   and  A  have  purchased   of   C  goods 

amounting  to  $ ,  and  have  executed  their  note,  etc. ;  now,  if  the  said 

J  and  A  fail  to  pay  said  note  at  maturity,  I  pledge  myself  to  be  responsi- 
ble for  the  same."  The  payee  is  sufficiently  designated.  Leach  v.  Flem- 
ming,  85 — 447.  That  the  seller  would  not  engage  in  the  same  business  in 
any  territory  where  he  had  secured  patronage,  was  too  indefinite.  Shute 
v.  Heath,  131 — 281.  An  agreement  between  two  physicians  that  one  of 
them  shall  locate  elsewhere  upon  a  certain  contingency,  "if  the  field  is 
not  large  then  than  now,"  is  too  indefinite.  Teague  v.  Schaub,  133 — 458. 
Defendant  asked  plaintiff  to  build  a  barn  on  his  (plaintiff's)  own  land 
and  agreed  to  furnish  part  of  the  money,  and  afterwards  refused  to  do 
so;  plaintiff  spent  about  $75  in  preparing  to  build  the  barn,  and  did  not 
complete  it  because  he  did  not  need  it  except  for  defendant's  use.  The 
court  held  the  terms  too  indefinite  to  constitute  a  contract.  Thomas  v. 
Shooting  Club,  123—285.  See  also  Nash  v.  Ferrabow,  115—303,  for  in- 
definite "agreement.  In  the  case  of  Kent  v.  Edmondston,  49 — 530,  a  con- 
tract of  warranty  in  the  sale  of  a  jack,  the  writing  was  held  to  be  too 
indefinite,  but  the  defendant  was  bound  by  the  parol  warranty. 

See  generally  Clark  Cont.,  pp.  43,  44;  1  Page  Cont.,  sec.  28;  9  Cyc,  248 
to  251;  6  R.  C.  L.,  643. 


78  FORMATION    OF    CONTRACT. 


CHAPTER  III. 

Form  of  Agreement. 

Sec.  1.     Contracts  of  record. 

1.  Judgments. 

(36)  MOORE  v.  NOWELL, 
94  N.  C,  265—1886. 

This  was  a  civil  action  heard  on  demurrer  to  the  complaint. 

On  the  9th  day  of  June,  1879,  one  W.  K.  Davis  obtained  three 
judgments  against  J.  J.  Nowell  and  others,  in  a  court  of  a  Justice 
of  the  Peace;  one  for  $79.32,  one  for  $155.62,  and  one  for  $80.34, 
all  of  which  were  duly  docketed.  On  the  9th  day  of  February, 
1885,  he  transferred  these  judgments  to  the  plaintiff  for  value  and 
in  writing.  J.  J.  Nowell  died  and  M.  A.  Nowell  was  appointed 
his  administratrix.  The  plaintiff  brought  his  action  in  the  Supe- 
rior Court  on  the  three  judgments  together. 

The  defendant  demurred  to  the  complaint  on  the  following 
grounds:  1.  That  the  judgments  sued  on  are  not  negotiable  or 
assignable  at  law,  so  as  to  give  the  plaintiff  the  right  of  action  at 
law  thereon  in  his  own  name. 

His  Honor  overruled  the  demurrer,  and  gave  judgment  final 
against  the  defendant,  from  which  an  appeal  was  taken. 

Merrimon,  J.  Judgments,  whether  they  be  granted  by  a  Justice 
of  the  Peace,  or  a  court  of  record,  are  assignable  either  in  writ- 
ing or  by  merely  verbal  transfer,  so  as  to  pass  the  equitable  title 
to  them  to  the  purchaser.     Winberry  v.  Koonce,  83  N.  C,  351. 

The  judgments  mentioned  and  described  in  the  complaint  were 
assigned  to  the  plaintiff  in  writing,  for  value,  and  he  became  the 
complete  equitable  owner  of  them,  and  "the  real  party  in  interest." 
The  person  in  whose  name  they  were  taken  has  only  the  naked 
legal  title  to  them,  and  he  holds  that  for  the  plaintiff. 

It  is  insisted,  however,  that  the  statute  (The  Code,  sec.  177), 
provides  that,  "Every  action  must  be  prosecuted  in  the  name  of 
the  real  party  in  interest,  except  as  otherwise  provided,  but  this 
section  shall  not  be  deemed  to  authorize  the  assignment  of  a  thing 
in  action  not  arising  out  of  contract,"  and  that  the  judgments  are 
things  in  action  "not  arising  out  of  contract." 

We  can  not  concur  in  this  view.     Judgments  are,  it  is  true,  not 


CONTRACTS   OF    RECORD. 


79 


ordinarily  and  always  and  for  all  purposes  treated  as  contracts,  as 
was  decided  in  McDonald  v.  Dickson,  87  N.  C,  404;  but  in  the 
sense  of  distinguishing  them  from  causes  of  action  arising  ex 
delicto,  they  are  contracts,  and  are  classed  in  the  law  as  contracts 
of  record,  and  of  the  highest  dignity.  They  possess  the  quality 
of  engagement,  by  implication  and  force  of  the  law,  on  the  part 
of  the  judgment  debtor,  to  pay  the  sum  of  money  adjudged  to  be 
due  the  judgment  creditor.  It  is  said  that  contracts  or  obligations 
ex  contractu  are  of  three  descriptions,  and  they  may  be  classed, 
with  reference  to  their  respective  order  or  degrees  of  superiority, 
as  follows:  1.  Contracts  of  Record;  2.  Specialties;  3.  Simple 
Contracts. 

Contracts  of  Record  consist  of  judgments,  recognisances,  etc. 
Chitty  on  Cont.,  3.  See  also  the  dissenting  opinion  of  Justice 
Ruffin,  in  McDonald  v.  Dickson,  supra. 

The  term  "contract,"  as  employed  in  the  statute  just  cited,  is 
used  in  its  broadest  legal  sense — in  a  fundamental  sense — and  im- 
plies and  embraces  all  things  in  action,  that  have  the  nature  or 
legal  quality  of  a  contract  as  defined  by  law.  It  is  employed  in  a 
leading  and  distinguishing  sense,  in  the  formation  of  a  system  of 
procedure. 

Therefore,  the  judgments  sued  upon  in  this  action  do  arise  out 
of  contract,  and  the  plaintiff,  as  assignee,  may  maintain  an  action 
upon  them  in  his  own  name.     .     .     .  Affirmed. 

A  judgment  is  not  a  contract  in  the  sense  contemplated  by  the  statute, 
The  Code,  sec.  172,  so  that  a  promise  in  writing  or  a  partial  payment 
will  prevent  the  bar  of  the  Statute  of  Limitations.  Clark's  Code,  sec. 
172:  McDonald  v.  Dickson,  87—404;  Hughes  v.  Boone,  114 — 54;  Mc- 
Caskill  v.  McKinnon,  121—192;  Alson  v.  Dahl,  99  Minn.,  433,  109  N.  W.. 
1001,  116  A.  S.  R.,  435;  Rockwell  v.  Butler,  17  Colo.,  290,  17  L.  R.  A., 
611;  Wadsworth  v.  Henderson,  16  Fed.,  447;  Gutta-Percha,  etc.,  Co.  v. 
Mayor,  108  N.  Y.,  276,  15  N.  E.,  402,  2  A.  S.  R.,  412.  A  judgment  is  not 
such  a  contract  as  comes  within  the  provision  of  the  constitution 
against  impairing  the  obligation  of  a  contract.  Louisiana  v.  Mayor  of 
New  Orleans,  109  U.  S.,  285;  Morley  v.  Lake  Sh.  &  Mich.  R.  R.,  146 
U.  S.,  162.  ,  T    j 

For  discussion  of  Judgment  as  Contract,  see  1  Black  on  Judgments, 
sees.  7-11;  2  Page  on  Cont.,  sees.  544-552;  2  Parsons  on  Cont.,  887;  Clark 
on  Cont.,  p.  49;  23  Cyc,  673;  7  Am.  &  Eng.  Encyc.  p.  93  and  vol.  17, 
pp.  763.  764. 

For  kinds  of  judgments  and  manner  of  entering,  see  Clark  s  Code,  sees. 
384-390,  and  cases  cited;  sees.  424-436,  and  cases  cited.  Controversy 
without  action,  sees.  567,  568;  confession  of  judgment,  sees.  570 — 572; 
executions,  sec.  437  et  seq.     Rev.,  555-579,  580-582,  615-627,  803-805. 

An  erroneous  judgment  is  one  rendered  according  to  the  course  and 
practice  of  the  court  but  contrary  to  law;  that  is,  based  upon  an  errone- 
ous application  of  legal  principles,  as  where  the  judgment  exceeds  the 
amount  mentioned  in  the  writ,  or  the  required  notice  has  not  been  given. 
An  irregular  judgment  is  one  contrary  to  the  course  and  practice  of  the 
court,  as  one  against  an  infant  with  no  guardian  to  represent  him.  A 
void  judgment  is  one  which  has  only  the  semblance  of  a  judgment,  as 
where  the  court  has  no  jurisdiction   or  the  party  has  not  been  served 


80  FORMATION    OF    CONTRACT. 

with  summons.  An  erroneous  or  an  irregular  judgment  is  valid  until 
vacated  or  reversed,  while  a  void  judgment  is  a  nullity.  Stafford  v. 
Gallops,  123—19;  McKee  v.  Angel,  90—60;  Card  v.  Finch,  142—140; 
Skinner  v  Moore,  19—138;  Newsom  v.  Newsom,  26 — 381;  Currie  v. 
Mining  Co.,    157—209. 

A  consent  judgment  is  the  agreement  of  the  parties  put  on  hie  with 
the  sanction  and  permission  of  the  court,  and  neither  party  can  change 
it  or  have  the  court  to  do  so  without  the  consent  of  the  other  party. 
Edney  v  Edney,  81—1;  Vaughn  v.  Gooch,  92—524;  Bank  v.  Commis- 
sioners, 119— p.  226;  Massey  v.  Barbee,  138—84;  Bank  v.  McEwen,  160— 
415  It  is  valid  though  entered  in  vacation  or  out  of  the  district.  West- 
hall  v.  High,  141—337;  Bank  v.  Gilmer,  118—668.  A  judgment  entered 
by  consent  of  counsel  of  record  is  binding  on  the  client.  Hairston  v. 
Garwood,  123—345;  Stump  v.  Long,  84—616;  Henry  v.  Hilliard,  120^79; 
Bradford  v.    Coit,  77—72. 

A  foreign  judgment  is  given  the  same  faith  and  credit  as  a  domestic 
judgment,  but  may  be  attacked  for  fraud.  Levi  v.  Gladstein,  142 — 482; 
Marsh  v.   R.   R.,  151—160;   Mottu  v.  Davis,  151—237. 

For  the  effect  of  a  judgment  as  res  judicata,  estoppel,  merger,  etc., 
see  Discharge  by  Judgment.  Tyler  v.  Capehart,  125—64;  Shakespeare  v. 
Land  Co.,  144—516. 

2.  Recognizances. 

(37)  STATE  v.  WHITE, 

164  N.  C,  408,  79  S.  E.,  297—1913. 

The  defendant  was  recognized  by  a  Justice  of  the  Peace  to  ap- 
pear at  the  next  term  of  the  Superior  Court.  In  lieu  of  bond,  a 
certified  check  of  $200  was  deposited  by  his  surety,  the  Old  Do- 
minion Distributing  Company.  The  defendant  appeared  before  the 
Superior  Court  and  pleaded  guilty.  The  judge  did  not  immedi- 
ately dispose  of  the  case,  but  a  day  or  two  later  the  defendant  was 
called  for  the  purpose  of  being  sentenced,  when  it  appeared  that 
he  had  left  the  court  and  the  State.  Judgment  nisi  was  entered, 
and  a  sci.  fa.  issued  against  the  defendant  and  the  surety.  Upon 
the  return  of  the  sci.  fa.,  a  judgment  was  rendered  condemning 
the  deposit,  and  the  surety  appealed. 

Allen,  J.  A  recognizance  is  a  debt  of  record  acknowledged 
before  a  court  of  competent  jurisdiction,  with  condition  to  do  some 
particular  act.  S.  v.  Smith,  66  N.  C,  620.  It  need  not  be  ex- 
ecuted by  the  parties,  but  is  simply  acknowledged  by  them,  and  a 
minute  of  the  acknowledgment  is  entered  by  the  court.  S.  v.  Ed- 
ney, 60  N.  C,  471. 

It  binds  the  defendant  to  three  things:  1.  To  appear  and  an- 
swer either  to  a  specified  charge  or  to  such  matters  as  may  be 
objected  to.  2.  To  stand  and  abide  the  judgment  of  the  court. 
3.  Not  to  depart  without  leave  of  the  court.  S.  v.  Schenck,  138 
N.  C,  562. 

It  follows,  therefore,  upon  these  well  settled  principles,  that  the 
judgment  nisi  is  regular  and  valid,  as  the  defendant  and  his  surety 


CONTRACTS    UNDER    SEAL. 


81 


entered  into  the  recognizance,  and  the  defendant  departed  without 
leave  of  court.     .     .     .  Affirmed. 

A  recognizance  is  an  obligation  acknowledged  of  record  before  a  court 
or  some  judicial  officer,  by  whom  it  is  drawn  out  and  certified.  It  is 
not  executed  by  the  parties,  but  acknowledged  by  them.  The  official 
character  of  the  person  before  whom  it  is  taken  must  appear,  as  that  it 
was  done  in  court  or  before  some  one  authorized  by  law  to  take  it,  so 
that  it  may  appear  to  be  a  record.  State  v.  Mills,  13—558.  The  taking 
cf  recognizance  consists  in  making  and  attesting  a  memorandum  of  the 
acknowledgment  of  a  debt  due  the  State,  and  of  the  conditions  on  which 
it  is  to  be  defeated.  State  v.  Houston,  74 — 549.  An  obligation  taken  in 
the  form  of  a  bond,  signed  and  sealed  by  the  defendants,  is  valid  as  a 
recognizance.     State  v.  Jones,  88—683;  State  v.  Edney,  60-^164 

The  defendant  was  recognized  to  appear,  and  having  appeared  and  the 
cause  being  continued,  he  was  required  to  give  security  for  his  .appear- 
ance again;  by  leaving  the  court  without  doing  this  he  forfeited  his 
recognizance;  and  this  would  be  so  even  after  judgment.  State  v.  Smith, 
66—620;  State  v.  Morgan,  136—593.  A  defendant  recognized  to  appear 
at  a  regular  term  which  is  not  held  on  account  of  sickness  of  the  judge, 
is  required  to  appear  at  the  next  regular  or  special  term.  State  v.  Hor- 
ton,   123—695.  .  . 

The  principal  in  a  recognizance  is  presumed  to  be  in  the  possession  ot 
his  bail.  "They  have  him  on  a  string  and  can  pull  it  at  any  time."  They 
may  arrest  him  without  process  at  any  time  or  place,  or  depute  someone 
else  to  take  him.  A  forfeiture  and  conditional  judgment  does  not  deprive 
them  of  this  right.  State  v.  Lingerfelt,  107—775;  State  v.  Schenck,  138 — 
560.  Money  left  in  the  hands  of  a  surety  on  a  recognizance  as  indemnity, 
may  be  applied  to  the  payment  of  the  amount  adjudged  by  the  court. 
Smith  v.  Kiser,  98—379.  .  . 

Statutory  regulations. — Witnesses  recognized.  Revisal,  sees.  3203,  32U4. 
Prisoner  recognized.  Revisal,  3207-3213.  Proceedings  on  forfeiture. 
Rev.   3214-3229. 

For  further  discussion  of  recognizance,  see,  State  v.  Dorr,  59  W.  Va., 
188,  53  S.  E.,  120,  115  A.  S.  R.,  915,  5  L.  R.  A.  (N.  S.),  402;  34  Cyc, 
540;  3  A.  &  E.  Enc,  686;  Recognizance,  Cent.  Dig.,  sees.  1-5;  Dec. 
Dig-.,   sees.   1-3. 


i-~ .. 


Sec.  2.     Contracts  under  seal. 

Smith  v.  Williams,  5  N.  C,  426 — 1810.  The  solemnity  of  sealed 
instruments  has  been,  from  the  earliest  periods  of  the  law,  highly 
regarded;  because  the  forms  and  ceremonies,  which  accompany 
them,  bespeak  deliberation  in  the  parties,  and  afford  a  safe  ground 
for  courts  and  juries  to  ascertain  and  settle  contested  rights.  This 
deliberation  is  inferred,  not  from  any  one  circumstance  attending 
the  transaction,  but  as  the  general  effect  of  the  whole.  Thus  in 
Plowd.,  308,  B,  "It  is  said  that  deeds  are  received  as  a  lien  final 
to  the  party  making  them,  although  he  received  no  consideration, 
in  respect  of  the  deliberate  mode  in  which  they  are  supposed  to 
be  made  and  executed ;  for,  first,  the  deed  is  prepared  and  drawn ; 
then  the  seal  is  affixed;  and  lastly,  the  contracting  party  delivers 
it,  which  is  the  consummation  of  his  resolution."  Hence  it  ap- 
pears that  the  law  gives  to  deeds  a  respect  and  importance  which 
it  denies  to  any  other  contracts ;  not  an  empty  and  unmeaning  re- 


82  FORMATION    OF   CONTRACT. 

spect,  but  such  as  properly  arises  from  the  existence  of  all  those 
circumstances  which  are  calculated  to  fix  and  make  authentic  the 
contracts  of  men.  A  contract  can  not  be  a  deed,  if  either  it  is  not 
prepared  and  drawn;  if  the  seal  be  not  affixed,  or  if  it  be  not  de- 
livered. 

1.  Essentials  of  such  contracts. 

(38)   STRAIN  v.  FITZGERALD, 
128  N.  C,  396,  38  S.  E.,  929—1901. 

This  was  an  action  for  the  possession  of  land  held  by  the  de- 
fendant under  a  sheriff's  sale  for  taxes.  It  was  admitted  that  the 
plaintiff  was  entitled  to  recover,  unless  the  defendant  acquired 
title  by  the  sheriff's  deed  under  the  tax  sale.  The  defendant  of- 
fered in  evidence  the  record  of  deeds  of  Durham  County,  which 
contained  the  form  of  a  deed,  signed  by  the  sheriff,  but  without  a 
seal.  This  was  excluded.  Judgment  for  the  plaintiff,  and  defend- 
ant appealed.  Affirmed. 

Furches,  C.  J.  ...  A  deed  is  an  instrument  of  writing  signed, 
sealed  and  delivered.  2  Blk.  Com.,  star  page  395.  The  seal  is 
what  distinguishes  it  from  a  parol  or  simple  contract.  Land  can 
only  be  conveyed  by  deed,  that  is,  an  instrument  of  writing  signed, 
sealed  and  delivered.  A  paper,  in  form  a  deed,  is  not  a  deed  with- 
out a  seal.  And  to  presume  a  seal  is  to  presume  the  very  matter 
at  issue.  There  can  be  no  presumption  of  a  fact,  unless  other 
facts  are  proved  or  admitted,  that  form  what  is  called  in  law  a 
chain,  that  necessarily  leads  the  mind  from  the  facts  proved  or 
admitted  to  the  fact  to  be  proved — "a  chain"  of  facts.  One  fact, 
if  proved,  does  not  form  a  "chain"  of  facts.  In  this  case  there 
is  but  one  fact,  as  we  understand  it,  that  the  defendants  rely  on 
to  prove  a  seal,  that  is  to  prove  a  deed,  and  that  is,  that  the  paper 
on  the  registration  books  says,  "Given  under  my  hand  and  seal." 
But  for  this  they  would  have  nothing.  And  when  it  is  considered 
that  the  paper  they  offer  is  in  the  exact  words  of  the  form  pre- 
scribed by  the  Legislature  for  sheriff's  deeds  in  sales  for  taxes, 
which  has  no  seal,  this  fact  loses  any  force  it  might  be  supposed 
to  have.  The  error  was  originally  committed  by  the  Legislature 
and  then  by  the  sheriff,  in  following  the  form  prescribed  by  the 
Legislature.  But  defendants  want  the  court  to  presume  that  the 
sheriff  of  Durham  County  knew  more  than  the  Legislature.  This, 
we  think,  may  be  called  a  violent  presumption,  in  the  sense  that  it 
violates  the  rule  of  presumptions  and  of  common  sense. 

To  adopt  the  reasoning  of  defendants  would  lead  us  into  the 
adoption  of  a  logic  that  can  not  be  sustained — that  the  inferior  is 
greater  than  the  superior,  that  a  part  is  greater  than  the  whole. 


CONTRACTS   UNDER   SEAL.  83 

We  have  said   in   Patterson   v.   Galliher,   that   the   original   is   not 
good.     Shall  we  say  now  that  a  copy  is?     We  can  not  do  so. 

In  the  same  case,  130 — 600,  it  was  held  that  evidence  might  be 
introduced  to  show  that  there  was  a  seal.  This  defect  in  the  tax 
deeds  was  remedied  by  Rev.  949a.  See  also,  Patterson  v.  Galliher,  122 
—511;  Floyd  v.  Ricks,  14  Ark.,  286,  58  A.  D.,  374;  Sterling  v.  Park,  129 
Ga.,  309,  58  S.  E.,  828,  121  A.  S.  R.,  224,  13  L.  R.  A.  (N.  S.),  298. 

(39)   GRAHAM  v.  HOLT, 
25   N.   C.,  300,  40  A.   D.,  408—1843. 

This  was  an  action  of  debt  on  a  bond  for  $265,  executed  in  the 
following  manner:  The  plaintiff's  intestate,  the  defendant  and  J. 
H.  having  been  partners  in  a  store,  when  they  came  to  dispose  of 
the  goods,  the  defendant  agreed  to  take  the  stock  and  pay  the 
plaintiff  and  J.  H.  for  their  shares  in  nine  months  time ;  later 
when  they  met  to  complete  the  arrangement,  the  inventory  was  not 
present  to  fix  the  amount  due  each ;  the  defendant  signed  and 
sealed  the  bond  in  question,  leaving  the  amount  blank,  and  deliv- 
ered it  to  J.  H.,  with  instructions  to  examine  the  inventory,  fill 
up  the  bond  with  the  proper  amount  and  deliver  it  to  the  plain- 
tiff; this  was  done,  and  the  defendant  refused  to  pay  the  bond. 
Upon  this  evidence  the  court,  being  of  opinion  that  the  plaintiff 
could  not  recover,  gave  judgment  for  the  defendant,  and  the  plain- 
tiff appealed.  Affirmed. 

DaniEE,  J.  A  bond  is  the  acknowledgment  of  a  debt  under  seal, 
the  debt  being  therein  particularly  specified.  In  every  good  bond 
there  must  be  an  obligor  and  an  obligee,  and  a  sum  in  which  the 
former  is  bound.  Shep.  Touch.,  56;  Com.  Dig.  Obligation  A.; 
Hurleston,  2.  In  New  York  ex  parte  Therwin,  8  Cowen,  118,  and 
some  other  American  cases,  the  nisi  prius  decision  before  Lord 
Mansfield  of  Traxira  v.  Evans,  1  Anst.,  229,  in  nota  has  been  fol- 
lowed. That  case  was  where  a  party  executed  a  bond  with  blank 
spaces  for  the  name  and  sum,  and  sent  an  agent,  without  power 
of  attorney  under  seal,  to  raise  money  on  it,  the  agent  accordingly 
filled  up  the  blanks  with  the  sum  and  the  obligee's  name,  and  de- 
livered the  bond  to  him.  On  the  plea  of  non  est  factum  the  bond 
was  considered  well  executed.  But  the  case  of  Traxira  v.  Evans 
has  been  by  this  court  twice  overruled,  as  attempting  to  establish 
a  distinction  in  the  mode  of  executing  deeds  by  attorney,  where 
the  object  was  to  raise  or  secure  money,  and  when  it  was  to  op- 
erate as  a  conveyance — the  first,  by  a  power  of  attorney  not  sealed, 
the  other  with  a  power  of  attorney  under  seal.  The  notion  with 
us  has  always  been,  what  we  learned  from  Co.  Litt.,  52  (a),  and 
the  Touchstone,  57,  that  he  who  executes  a  deed  as  agent  for  an- 


84  FORMATION    OF    CONTRACT. 

other,  be  it  for  money  or  other  property,  must  be  armed  with 
authority  under  seal.  McKee  v.  Hicks,  13 — 379;  Davenport  v. 
Speight,  19 — 382.  The  insertion  of  the  sum  in  the  blank  space 
was  intended  to  consummate  the  deed;  it  was  done  without  legal 
authority,  and  the  instrument  is  void  as  a  bond.     .     .     . 

To  the  same  effect  see  Blackwell  v.  Lane,  20—245;  Marsh  v.  Brooks, 
33^409;  Phelps  v.  Call,  29—262;  Kent  v.  Edmondston,  49—530;  Barden 
v.  Sutherland,  70—528;  Bland  v.  O'Hagan,  64 — 471;  McKee  v.  Hicks,  13 
—377;  Davenport  v.  Sleight,  19—382,  31  A.  D.,  420;  Williams  v.  Crutcher, 
5  How.  (Miss.)  71,  35  A.  D.,  422.  That  a  deed  or  bond  executed  in 
blank  may  be  filled  up  by  a  third  person  duly  authorized  is  recog- 
nized, but  the  cases  differ  as  to  what  is  sufficient  authority,  some 
requiring  authority  under  seal,  the  strict  rule  of  the  common  law,  and 
others  recognizing  parol  authority.  Stahl  v.  Berger,  10  Serg.  &  R.,  170, 
13  A.  D.,  666;  Upton  v.  Archer,  41  Cal.,  85,  10  A.  R..  266;  Cribben  v. 
Deal,  21  Ore.,  211,  28  A.  S.  R.,  746;  Richards  v.  Day,  137  N.  Y.,  183,  33 
A.  S.  R.,  704;  Mahoney  v.  Salsbury,  83  Neb.,  488,  119  N.  W.,  144,  131 
A.  S.  R.,  647;  McCleerey  v.  Wakefield,  76  Iowa,  529,  41  N.  W.,  210,  2 
L.  R.  A.,  529;  Van  Dyke  v.  Van  Dyke,  119  Ga.,  830,  47  S.  E.,  192. 

In  Blacknall  v.  Parrish,  59 — 70,  the  instrument  was  invalid  as  a  deed, 
but  was  valid  as  a  contract  to  convey.  In  Humphreys  v.  Finch,  97 — 
303,  the  amount  was  left  blank  and  then  filled  by  the  principal  for 
more  than  the  surety  intended,  and  the  surety  was  held  liable  on  the 
ground  of  estoppel.  In  Rollins  v.  Ebbs,  137 — 355  and  138 — 140,  a 
guardian  bond  was  signed  by  the  sureties,  with  the  penalty  blank,  and 
this  was  afterwards  filled  in  by  the  guardian;  the  bond  was  held  to  be 
valid. 

(40)  WALKER,  Admr.,  v.  ROBERT  WALKER, 
35  N.   C,  335—1852. 
This  was  an  action  of  debt  on  a  single  bill   for  $40,  and  was 
tried  on  non  est  factum,  payment  at  and  after  the  day.     From  a 
verdict  and  judgment  for  the  plaintiff,  the  defendant  appealed. 

Pearson,  J.  His  Honor  charged,  "That  where  the  execution  of 
a  sealed  instrument  was  proved,  the  law  inferred  that  it  was  just, 
and   founded  upon  a  just  consideration."     In  this  there  is   error. 

We  are  not  aware  of  any  rule  of  law  by  which  a  consideration 
is  inferred  from  the  fact  of  the  execution  of  a  sealed  instrument. 
No  consideration  is  necessary  in  order  to  give  validity  to  a  deed. 
It  derives  its  efficiency  from  the  solemnity  of  its  execution — the 
acts  of  sealing  and  delivery,  not  upon  the  idea  that  the  seal  im- 
ports a  consideration,  but  because  it  is  his  solemn  act  and  deed, 
and  is  therefore  obligatory.  No  consideration  being  necessary  to 
give  validity  to  a  deed,  it  follows  that  the  law  does  not,  from  the 
fact  of  execution,  make  any  inference  one  way  or  the  other  in  ref- 
erence to  a  consideration.  A  misapprehension  of  this  subject  may 
have  arisen  from  the  fact  that  in  deeds  of  conveyance,  operating 
under  the  statute  of  uses,  either  a  valuable  or  a  good  consideration 
is  necessary  in  order  to  raise  the  use.  But  the  general  rule  is,  a 
deed    is    valid    without    a    consideration.      A    voluntary    bond    for 


CONTRACTS    UNDER    SEAL.  85 

money,  executed  to  a  stranger,  and  professing  on  its   face  to  be 
without  consideration,  and  for  mere  friendship,  is  binding.     .     .     . 

That  no  consideration  is  necessary,  see  also  Woodall  v.  Prevatt,  45 — 
199-  Harrell  v.  Watson,  63 — 454;  Angier  v.  Howard,  94 — 27;  Howard 
v  Turner,  125—107;  Webster  v.  Bailey,  118— p.  194;  Ducker  v.  Whitson, 
112—44;   Littlejohn  v.  Patillo,  9—302. 

By  reason  of  the  efficacy  which  the  statute  gives  to  registration,  all 
deeds  are  put  upon  the  footing  of  feoffments,  which  take  effect  from 
livery  of  seisin,  and  need  no  consideration.  Love  v.  Harbin,  87 — 249; 
Mosely  v.  Mosely,  87—69;  Ivey  v.  Granberry,  66 — 223;  Hogan  v.  Stray- 
horn,  65—279.  .  ,     ,       ,  ■     • 

Where  the  action  on  a  contract  under  seal  is  purely  legal  in  its  nature, 
the  consideration  is  not  necessary  and  can  not  be  inquired  into;  but 
where  equitable  relief  is  sought,  the  consideration  is  necessary  and  may 
be  inquired  into.  Jennings  v.  Hinton,  128— p.  217;  Flaum  v.  Wallace. 
103— p.  313;  Woodall  v.  Prevatt,  45—199;  Buxly  v.  Buxton,  92-^79. 
Bryan  v.  Foy,  69 — 45;  Hurdle  v.  Richardson,  52 — 16. 

An  endorsement  under  seal  on  the  back  of  a  deed  is  not  a  conveyance 
of  the  land  described  in  the  deed,  but  may  be  a  contract  to  convey. 
Joines  v.  Johnson,  133 — 487;  Tunstall  v.  Cobb,  109—316;  Linker  v.  Long, 
64 — 296;  as  to  an  entry  on  the  record  of  a  deed,  see  Brown  v.  Davis, 
109 — 23;  Woodcock  v.  Merrimon,  122 — 731. 

The  consideration  of  a  contract  under  seal  may  also  be  inquired  into 
to  see  whether  or  not  it  is  illegal.  Brown  v.  Kinsey,  81 — 245;  Harrell  v. 
Watson,  63—454. 

2.  Signing. 

(41)  DEVEREUX  v.  McMAHON, 
108  N.  C,  134,  12  S.   E.,  902,  12  L.  R.  A.,  205—1891. 

This  was  a  civil  action  for  the  possession  of  land,  and  the  facts 
appear  sufficiently  in  the  opinion.  The  defendant  claimed,  1. 
That  there  was  no  sufficient  signing  of  the  deed;  2.  That  it  was 
not  properly  registered;  3.  That  there  was  no  evidence  of  delivery. 
There  was  a  verdict  and  judgment  for  the  plaintiff,  and  defendant 
appealed. 

Avery,  J.  .  .  .  The  last  clause  of  the  original  deed  and  the 
attestation  clause,  with  the  signatures,  were  as  follows: 

"In  witness  whereof,  the  said  Thomas  Alexander  hath  hereunto 
signed  his  name  and  affixed  his  seal,  the  day  and  date  above  writ- 
ten. X  (Seal.) 

"Signed,  sealed  and  delivered  in  presence  of  X  John  Cobb,  wit- 
ness towards  of  what  was  sed,  Thomas  Alexander  did  agree  to  the 
deed.     D.  S.  C." 

The  same  portion  of  the  deed  was  recorded  in  the  Register's 

office  as  follows : 

"In  witness  whereof,  the  said  Thomas  Alexander  hath  hereunto 

signed  his  name  and  fixed  his  seal,  the  day  and  date  above  written. 
"Witness:  X    (Seal.) 

"Signed,  sealed  and  delivered  in  the  presence  of  X  John  Cobb, 


86  FORMATION    OF    CONTRACT. 

witness  towards  of  what  was  sed  Thomas  Alexander  did  agree  to 
the  deed.     Solomon  Davis." 

The  defendant  contended  that  the  deed  was  not  signed  in  ac- 
cordance with  the  requirements  of  our  statute  of  frauds  (The 
Code,  sec.  1554),  and  that  the  judge  below  should  have  instructed 
the  jury  that  the  plaintiff  had  failed  to  adduce  any  evidence  tend- 
ing to  show  title  in  himself,  and  could  not  therefore  recover. 

Under  the  Saxon  rule  in  England,  it  was  only  required  that 
deeds  should  be  subscribed  with  the  sign  of  the  cross.  It  was  not 
necessary  that  a  seal  should  be  attached.  After  the  Norman  con- 
quest sealing  became  a  requisite,  but  signing  of  all  kinds  ceased  to 
be  required.  3  Wash.  R.  P.,  242;  Coke  Lit.,  171,  b;  2  Blac.  Com., 
309.  After  the  statute  of  frauds  was  enacted  it  became  essential 
that  every  deed  purporting  to  convey  land,  and  every  other  instru- 
ment required  under  its  provisions  to  be  in  writing,  should  be 
signed  by  the  party  to  be  charged  therewith. 

It  is  now  an  established  rule  that  the  name  of  the  party  to  be 
charged  may  be  written  by  an  agent  in  his  presence  and  under  his 
direction,  the  act  of  the  authorized  agent  being  theoretically  the 
act  of  the  principal.  Tiedman  on  R.  P.,  sec.  807 ;  Pierce  v.  Hakes, 
23  Pa.  State,  231;  Insurance  Co.  v.  Brown,  30  N.  J.  Eq.,  193; 
Browne  on  Stat,  of  Frauds,  12;  Kime  v.  Brooks,  9  Ired.,  218; 
Frost  v.  Deering,  21  Me.,  156;  Gardner  v.  Gardner,  6  Cush.,  483. 

Under  the  provisions  of  our  statute  (The  Code,  sec.  1554),  all 
of  the  instruments  enumerated  are  required  to  be  in  writing  and 
signed  by  the  party,  etc.,  while  in  the  statutes  of  some  of  the  other 
States  the  word  "subscribed"  is  substituted  for  signed.  Modern 
text  writers  generally  concur  in  the  opinion  that  it  is  not  essential 
that  the  signature  should  be  placed  at  the  end  of  the  deed  or  other 
instrument,  where  the  law  requires  signing  only.  Martindale  on 
Conveyancing,  sec.  6;  5  Am.  &  Eng.  Enc,  441;  Tiedman  Real 
Prop.,  sec.  807. 

In  the  construction  of  statutes  in  reference  to  wills  a  similar 
rule  has  been  generally  adopted.  Signatures  in  the  body  of  the 
will  have  been  declared  to  constitute  a  sufficient  compliance  with 
the  requirement  that  there  should  be  a  signing,  and  the  courts 
have  gone  so  far  as  to  sustain  the  validity  of  the  execution  of  a 
will,  where  the  name  of  the  testator  was  written  under  the  names 
of  the  witnesses  to  the  attestation  clause  after  having  been  written 
also  as  a  part  of  that  clause  by  him.  7  Mews  Jacobs  Dig.,  879; 
1  Williams  on  Executors,  60.  It  is  conceded  that  where  another 
person  has  already  written  the  signature  of  one  who  is  illiterate, 
the  latter  may  adopt  the  signing  subsequently  by  attaching  a  cross 
or  other  mark  used  by  him  as  a  substitute  for  an  actual  signature, 
though  he  could  not  so  ratify  the  act  of  an  agent  who  signed  his 


CONTRACTS    UNDER    SEAL.  87 

name  not  in  his  presence  except  by  attaching  such  mark.  The 
grantor  in  this  case  inquired  who  had  written  the  deed,  and  was 
told  that  it  was  written  by  Mr.  Thorpe,  a  lawyer,  and  in  substance 
what  were  its  contents.  It  was  insisted  with  much  force  by  the 
learned  counsel  on  the  argument,  that  when  Thomas  Alexander 
made  the  cross  mark  opposite  to  the  seal  and  beneath  the  clause 
reciting  his  name,  he  adopted  the  signing  of  his  name  in  that 
clause,  the  name  being  in  close  proximity  to  the  cross  and  seal. 
It  is  well  established  that  any  number  of  grantors  may  by  delivery 
adopt  a  seal  opposite  to  the  name  of  the  first  of  the  number  who 
signs  the  deed,  there  being  a  recital  in  it  that  they  had  attached 
their  seals ;  while  on  the  other  hand  where  there  is  no  such  recital, 
a  seal  attached  to  the  name  will  be  deemed  sufficient  to  constitute 
the  instrument  a  deed.  3  Wash.  Real  Prop.,  244,  245 ;  Tiedman, 
supra,  808;  Yarborough  v.  Monday,  2  Dev.,  493. 

It  seems  not  unreasonable  to  be  guided  by  the  principle,  so  often 
invoked  in  the  construction  of  deeds  and  wills,  that  the  law  will 
favor  those  who  are  inops  consilii  and  illiterate,  and  attempt  to 
arrive  at  and  carry  out  their  true  intent  by  a  liberal  application  of 
technical  rules.     Washburn,  supra,  at  page  244,  says:     "Affixing 
a  mark  by  the  grantor  against  his  name,  though  written  by  another, 
is  a  signing,  although  it  do  not  appear  that  he  could  not  write  his 
own  name."     It  being  settled,  then,  that  our  statute  does  not  re- 
quire that  the  name  should  be  subscribed  at  the  end  of  the  instru- 
ment, when  written  by  the  party  to  be  charged  in  his  own  hand- 
writing,   it    would    seem    to    be    an    unreasonable    discrimination 
against,  instead  of  in  favor  of,  an  illiterate  person  to  declare  his 
conveyance  null  and  void  because  he  attempted  by  a  mark  placed 
in  proximity  to  the  seal  at  the  end  of  the  deed  to  adopt  a  signing 
of   his   name   in   the   last   clause   of   the   instrument.      The  courts, 
since  the  enactment  of  the  statute  of  frauds  (29  Charles  II),  have 
used  the  maxim  quod  facit  per  alium  facit  per  se  with  great  liber- 
ality, especially  in  making  auctioneers  by  implication  of  law,  the 
agents  of  those  who  bid  for  land  at  sales.     In  construing  the  act 
of  making  the  mark  in  this  case  as  an  adoption  of  the  signature 
just  above  it  in  the  body  of  the  deed,  we  can  foresee  no  greater 
danger  of  opening  the  door  for  the  evasion  of  the  statute  of  frauds 
than   in   any   other  case  where   the   mark   is   used   and   placed   in 
juxtaposition  to  the  written  name.     In  either  case  the  execution  of 
the  instrument  must  be  ordinarily  shown  by  the  acknowledgment 
of  the  maker,  or  the  testimony  of  a  witness  who  saw  it  made,  and 
even  where  both  the  maker  and  the  subscribing  witness  may  have 
died,  the  necessity  for  proving  the  genuineness  of  the  signature  of 
the  witness  or  some  distinguishing  feature  in  the  mark  made  t>y 
the  grantor,  is  an  ample  guaranty  that  the  opportunity  or  incentive 


88  FORMATION    OF    CONTRACT. 

to  evade  the  statute  of  frauds  will  not  be  enhanced  by  sustaining 
the  validity  of  the  signing  of  Thomas  Alexander.  Davis  v.  Hig- 
gins,  91  N.  C,  382.  If  there  had  been  no  witness  to  the  deed, 
then  it  could  not  have  been  admitted  to  probate  without  proof  that 
the  mark  was  habitually  used  by  Alexander  as  a  substitute  for 
signing  his  name,  and  that  there  was  some  peculiarity  in  its  ap- 
pearance which  distinguished  it  from  other  marks  and  enabled  the 
witness  to  recognize  it  as  he  would  the  peculiarities  of  handwrit- 
ing. Sellers  v.  Sellers,  98  N.  C,  16;  State  v.  Byrd,  93  N.  C,  624; 
Howell  v.  Ray,  92  N.  C,  510.  In  support  of  this  view,  Justice 
Merrimon,  delivering  the  opinion  of  the  court  in  State  v.  Byrd, 
supra,  said :  "While  generally  a  mere  cross-mark  employed  by  a 
person  who  can  not  write,  as  evidence  that  he  executed  a  paper- 
writing  to  which  it  is  affixed,  can  not  be  proven,  yet  a  person  may 
have  a  mark  so  peculiar  and  so  uniformly  used  by  him  for  such 
purpose  as  that  it  may  become  well  known  as  his  mark,  and  may 
be  proven  just  as  the  signature  of  one  who  writes  may  be  proven 
to  be  in  his  own  handwriting.  A  mark,  like  the  signature  of  a 
party,  is  intended  to  be  evidence  of  the  fact  that  the  party  making 
it  made  it,  and  identifies  himself  with  the  paper-writing  signed  in 
the  way  and  for  the  purpose  indicated  in  it,  and  it  is  just  as  bind- 
ing ordinarily  without  a  subscribing  witness  as  with  one,  but  it 
may  be  proven  as  a  signature  may  be  by  one  who  saw  it  made,  or 
who  heard  the  maker  acknowledge  it  to  be  his,  and  the  maker  him- 
self is  generally  a  competent  witness  to  prove  that  he  made  it." 
Howell  v.  Ray,  92  N.  C.,  510.  We  have  reproduced  this  extract 
to  make  it  clear  that  we  are  sustained  by  an  adjudication  of  this 
court,  in  which  it  is  laid  down  as  a  principle,  in  the  most  explicit 
way,  that  an  instrument  purporting  to  be  a  deed  and  required  to 
be  in  writing  and  signed  by  the  party  charged  thereby,  is  not  void 
upon  its  face  because  the  maker  or  grantor  has  signed  by  making 
a  simple  cross,  nor  even  if  there  is  no  witness  to  such  signing. 
The  law  still  leaves  the  way  open  for  proof  of  its  execution  by 
showing  it  to  be  a  peculiar  substitute  habitually  used  by  the  gran- 
tor, instead  of  an  ordinary  signature,  or  for  evidence  from  an  eye 
witness  that  he  saw  the  mark  attached,  just  as  he  could  testify  to 
the  act  of  subscribing  the  name.  Our  view  of  the  subject  is  sus- 
tained by  reason  and  the  current  of  authority.  While  it  is  not 
probable  that  any  case  precisely  similar  in  all  respects  to  that  un- 
der consideration  has  ever  arisen,  the  principle  announced  finds 
abundant  support  in  the  adjudications  of  other  courts  and  the  con- 
clusions deduced  from  them  by  leading  writers  upon  the  subject 
of  deeds  and  conveyances.  Lawson  Rights  &  Rem.,  vol.  5,  sec. 
2270,  says  a  person  physically  unable,  or  too  illiterate,  to  write  his 
name,  may  sign  by  making  a  cross,  a  straight  or  crooked  line,  a 


CONTRACTS   UNDER   SEAL.  89 

dot  or  any  other  symbol.  In  Martindale  on  Conveyancing,  sec. 
190,  the  rule  is  stated  as  follows :  "As  to  what  will  constitute  a 
sufficient  signing,  it  may  be  observed  that  it  is  not  necessary  that 
the  party  should  write  his  own  name ;  his  mark  is  sufficient,  though 
he  be  able  to  write."  In  section  6  the  same  author  says:  ''It 
seems  that  putting  initials  to  a  document,  the  name  appearing  else- 
where, is  a  sufficient  signing  to  satisfy  the  requirements  of  the 
statute."  If  the  initial  letters  of  one's  name  be  allowed  to  serve 
as  a  substitute  for  a  formal  signature  because  the  name  is  signed 
in  full  in  the  body  of  the  deed,  why  should  we  hold  that  a  mark, 
the  making  or  distinctive  character  of  which  is  susceptible  of 
proof,  is  insufficient  under  similar  circumstances? 

The  second  ground  of  exception  was  that  the  deed  was  not  law- 
fully and  properly  registered.  The  certificate  of  probate  and  fiat 
are  as  follows :  "State  of  North  Carolina — Nash  County.  I,  John 
T.  Morgan,  Clerk  of  the  Superior  Court,  do  hereby  certify  that  the 
execution  of  the  annexed  deed  was  this  day  proven  before  me  by 
the  oath  and  examination  of  Solomon  Davis,  the  subscribing  wit- 
ness thereto,  who  says  that  the  deed  was  signed  and  delivered  in 
his  presence  January  13,  1888,  to  the  grantee  for  the  purposes 
therein  expressed.  Witness  my  hand  and  official  seal,  this  20th 
day  of  January,  1888."     (Signed  and  sealed  by  the  Clerk.) 

"State  of  North  Carolina — Halifax  County.  In  the  Superior 
Court,  February  9th,  1888.  The  foregoing  certificate  of  John  T. 
Morgan,  Clerk  of  the  Superior  Court  of  Nash  County,  duly  at- 
tested by  his  official  seal,  is  adjudged  to  be  correct.  Let  the  in- 
strument, with  the  certificate,  be  registered."  (Signed  John  T. 
Gregory,  Clerk  Superior  Court.) 

"Filed  for  registration  February  9th,  1888."  (Signed  L.  Vin- 
son, Register  of  Deeds.) 

If  the  objection  to  the  probate  is  based  upon  the  ground  that  the 
original  deed  shows  that  Solomon  Davis,  instead  of  signing  his  full 
name  to  the  attestation,  wrote  the  letters  "D.  S.  C,"  and  the  Reg- 
ister recorded  the  signature  "Solomon  Davis,"  we  think  it  is  clearly 
untenable.  Registration  is  not  rendered  void  by  reason  of  a  mis- 
take by  the  officer  in  recording  deeds,  but  the  registration  is  pre- 
sumptively correct,  and  the  remedy  for  such  defective  record  is  to 
demand  the  original,  which,  if  legible,  is  the  highest  evidence  of 
the  form  of  the  deed  and  the  probate.  Davis  v.  Inscoe,  84  N.  C, 
396;  Love's  Extrs.  v.  Harbin,  87  N.  C,  249.  When  this  case  was 
brought  to  this  court  by  a  former  appeal  (102  N.  C,  284),  we 
held  that  the  fact  that  a  witness  had  made  a  cross-mark  in  attest- 
ing a  deed,  did  not  affect  his  competency  to  prove  its  execution. 
See  also  5  Lawson,  sec.  2271 ;  Nelins  v.  Brickell,  1  Haywood,  19. 
Upon  the  principle  already  announced  in  discussing  the  signature 


90  FORMATION    OF    CONTRACT. 

of  the  grantor,  there  can  be  no  further  controversy  as  to  his  eligi- 
bility, when  it  appears  that  he  used  characters  so  peculiar  as  a  sub- 
stitute for  signing  his  name.  Tatom  v.  White,  95  N.  C,  453 ; 
State  v.  Byrd,  supra;  Sellers  v.  Sellers,  supra;  Martindale,  sec.  6. 

His  testimony  was  as  follows:  "I  witnessed  the  deed;  I  saw 
Tom  sign  the  deed,  and  he  handed  it  to  me  and  asked  me  to  wit- 
ness it;  that  is  my  name,  D.  S.  for  Davis,  C.  for  Solomon;  that  is 
the  way  I  sign  it ;  the  rest  was  put  there  merely  to  fill  in ;  I 
thought  the  old  man  was  in  his  right  mind ;  I  did  not  hear  any  one 
read  the  deed  to  Tom;  Tom  asked  Basil  if  he  had  got  the  deed 
fixed  up ;  he  said  yes ;  Tom  asked  who  fixed  it ;  he  said  Mr. 
Thorpe,  a  lawyer,  and  told  him  what  was  in  it ;  Tom  signed  the 
deed  about  twelve  o'clock  in  the  day,  and  died  about  twelve  o'clock 
that  night.  I  handed  the  deed  either  to  Basil  in  Tom's  presence, 
or  back  to  Tom,  and  he  handed  it  to  Basil." 

We  think  that  though  there  was  a  mistake  in  recording  the  deed, 
it  did  not  affect  the  right  of  the  plaintiff  given  by  statute  to  read 
the  record,  as  already  stated,  subject  to  the  right  of  defendant,  if 
the   original   could   be   produced,   to   correct   such   mistakes   by   its 
introduction.     The  deed  was  properly  proven  by   Solomon  Davis, 
who  was  a  competent  witness.     The  effect  of  showing  the  mistake 
of  the  Register  of  Deeds  was  not  to  annul  the  probate,  not  even  to 
destroy  the  competency  of  the  copy  upon  the  book  as  evidence,  but 
simply  to   rebut  the  presumption  that  the  copy  was  correct,   and 
open  the  way  for  the  consideration  and  discussion  of  the  question, 
whether  the  paper-writing,  in  its  original  shape,  was  upon  its  face 
an  instrument  that,  under  our  statute,  might  be  probated  and  ad- 
mitted to  registration.     Defendant's  counsel  insisted  that  there  was 
no  evidence  of   delivery.     Though  neither  proof  of  possession  of 
the  deed  by  the  grantee  alone,  nor  evidence  of  the  handwriting  of 
the  bargainor,  unconnected  with  the   facts,  will  raise  a  presump- 
tion of  delivery  so  as  to  dispense  with  actual  proof  of  it,  yet  when 
both  the  signing  by  the  grantor  and  possession  of  the  grantee  are 
shown,   there   is   prima   facie   evidence   of    delivery.      Williams    v. 
Springs,  7  Ired.,  384;  Whitsell  v.  Mebane,  64  N.  C,  345;  Ingram 
v.   Hall,   1    Haywood,    193.     But  the  witness,   Davis,  testified  that 
when  the  deed  was  handed  to  him  by  the  grantor,  he  either  handed 
it  in  his  presence  and  with  his  acquiescence  to  the  grantee,  Basil 
Devereux,  or  he  returned  it  to  Alexander,  who  handed  it  to  Dev- 
ereux.     That  was  evidence,  if  believed,  of  an  actual  delivery.  The 
failure  to  read  a  deed,  or  the  misrecital,  of  its  contents  to  an  il- 
literate grantor  who  asks  to  know  what  it  contains,  constitutes  a 
fraud  in  the  factum,  and  on  proof  of  these   facts  the  instrument 
was  formerly  treated  as  void  in  a  court  of  law,  and  can  now  be 
attacked  without  initiating  a  direct  proceeding  to  impeach  it.     But 


CONTRACTS    UNDER    SEAL.  91 

where  a  grantee,  though  an  illiterate  man,  does  not  demand  that 
the  deed  shall  be  read,  and  all  of  the  testimony  tends  to  show  that 
a  witness  told  him  in  substance  what  its  provisions  were,  there  is 
no  evidence  of  fraud  to  be  submitted  to  the  jury.  School  Com.  v. 
Kesler,  67  N.  C,  443;  Nicholls  v.  Holmes,  1  Jones,  360;  Canoy 
v.  Troutman,  7  Ired.,  155. 

There  is  no  error,  and  the  judgment  must  be  affirmed. 

Affirmed. 

Making  mark  is  a  sufficient  signing  when  proven.  State  v.  Byrd,  93 — 
624;  and  the  words  "his  mark"  need  not  be  used.  Sellers  v.  Sellers, 
98—13;   Tatom  v.   White,  95— 453;    Hinsman   v.    Hinsman,  52—511. 

The  signature  may  be  in  the  body  of  the  deed  instead  of  at  the  end. 
"It  is,  as  a  matter  of  law,  immaterial  where  the  signature  be;  it  is  as 
binding  when  found  anywhere  else  in  the  paper  as  it  is  when  appearing 
at  the  end,  the  question  being  always  open  to  the  jury  whether  the 
party,  by  not  signing  it  regularly  at  the  foot,  meant  to  be  bound  by 
it  as  it  then  stood,  or  whether  he  left  it  so  unsigned  because'  he  re- 
fused to  complete  it."  Kenck  v.  Parchen.  22  Mont.,  519,  57  Pac,  94, 
74  A.  S.  R.,  625;  Richards  v.  Lumber  Co.,  158,  p.  156;  Boger  v.  Lumber 
Co.,  165—557;  6  R.  C.  L.,  640;  Deeds,  Cent.  Dig.,  sec.  89. 

Instruments  under  seal  signed  by  one  whose  name  does  not  appear 
in  the  body  of  the  writing  are  not  properly  executed  and  binding, 
unless  there  is  enough  in  the  instrument  to  indicate  its  character  and 
effect  as  to  such  obligor.  Kerns  v.  Peeler,  49 — 226;  Gray  v.  Mathis, 
52—502;  Estes  v.  Jackson,  111—145;  King  v.  Rhew,  108—696,  28  A.  S. 
R.,  76;  Carson  v.  Ins.  Co.,  161^441;  Payne  v.  Parker,  10  Me.,  178,  25 
A.  D.,  221;  Stone  v.  Sledge,  87  Tex.,  49,  47  A.  S.  R.,  65;  Jason  v.  John- 
son, 74  N.  J.  L.,  529,  67  Atl.,  42,  122  A.  S.  R.,  402;  Cordano  v.  Wright, 
159  Cal,  610,  115  Pac,  227,  24  Ann.  Cas.,  1044;  Sterling  v.  Park,  129 
Ga..  309,  58  S.  E.,  828,  121  A.  S.  R.,  224,  13  L.  R.  A.  (N.  S.),  298;  9 
Cyc,  301;  so  a  bail  bond  signed  by  the  defendant  as  surety  but  his 
name  was  not  inserted  in  the  bond,  was  held  to  be  invalid.  Adams  v. 
Hedgepeth,  50 — 237;  but  an  administration  bond  signed  in  the  same  way 
was  held  to  be  valid,  Vanhook  v.  Barnett,  15 — 268,  and  also  a  bond 
of  the  clerk  of  superior  court,  Howell  v.  Parsons,  89 — 230.  In  the  latter 
cases,  the  nature  of  the  bond  and  the  office  of  the  principal  were  suffi- 
cient  to  show  the  nature   of  the   obligation. 

An  indenture  was  a  deed  made  by  two  or  more  parties,  in  as  many 
parts  as  there  were  parties,  and  these  parts  were  separated  by  cutting  or 
indenting  so  as  to  correspond  with  each  other.  A  deed  poll  was  a  deed 
executed  by  one  party,  2  Blk.,  295;  that  is,  it  was  signed  by  the  grantor 
and  made  binding  upon  the  grantee  by  acceptance.  Maynard  v.  Moore, 
76 — 158;  Harshaw  v.  McKesson,  65 — 688;  Herring  v.  Lumber  Co.,  163 — 
481;    Mordecai's    Lectures,   818. 

(42)  KIME  v.  BROOKS, 
31   N.   C,  218—1848. 

This  was  an  action  of  debt  on  a  bond.  The  maker  of  the  bond 
could  not  write,  by  reason  of  age  and  infirmity,  and  he  directed 
his  daughter  to  sign  the  paper  for  him  ;  for  that  purpose  he  laid 
the  paper  down  on  the  table,  turned  away  and  went  out  into  the 
yard ;  the  daughter  signed  the  paper  and  delivered  it ;  she  said  that 
when  she  signed  it  she  could  hear  her  father  talking  in  the  yard, 
but  that  she  did  not  see  him,  nor  think  that  he  could  see  her ;  the 


92  FORMATION    OF   CONTRACT. 

father  never  objected  afterward.  The  court  instructed  the  jury 
that  this  would  make  a  sufficient  signing  and  delivery.  There  was 
a  verdict  and  judgment  for  the  plaintiff,  and  the  defendant  ap- 
pealed. 

RuFFin,  C.  J.  The  court  does  not  concur  in  the  instructions  to 
the  jury.  The  Touchstone,  57,  states  the  rule  upon  which  the  case 
depends  in  a  short,  but  very  clear  manner.  "Where  one  person 
delivers  an  instrument  as  the  act  of  another  person,  who  is  present, 
no  deed  conferring  an  authority  is  requisite.  But  a  person  can 
not,  unless  authorized  by  deed,  execute  an  instrument  as  the  act 
of  a  person  who  is  absent;  and  every  letter  of  attorney  must  be 
by  deed."  The  plain  meaning  of  the  passage  is,  that  what  a  per- 
son does  in  the  presence  of  another,  in  his  name  and  by  his  di- 
rection, is  the  act  of  the  latter,  as  if  done  exclusively  in  his  own 
person;  but  that  what  is  done  out  of  his  presence,  though  by  his 
direction  and  in  his  name,  can  not  in  law  be  considered  an  act  in 
propria  persona,  but  one  done  by  authority ;  and  that  when  the  au- 
thority is  to  execute  a  deed  by  signing,  sealing  and  delivering  it 
for  the  party,  and  especially  the  delivering,  it  can  not  be  oral,  but 
must  be  by  deed.  There  are  some  instances  in  modern  times,  in 
which  judges  have  been  moved  by  the  hardship  and  justice  of  the 
case  to  depart  in  some  degree  from  this  rule,  though  so  precise  in 
its  terms  and  so  wholesome  in  its  general  application.  But  in  this 
State  it  has  been  scrupulously  adhered  to,  when  it  operated  to  the 
prejudice  of  claims  as  just  in  all  respects  as  the  present,  if  not 
more  so.  .  .  .  The  court  holds,  therefore,  that  it  was  indis- 
pensable to  the  validity  of  this  instrument,  as  a  bond,  that  the 
party  should  have  been  present  at  its  execution  and  delivery.    .    .    . 

Reversed. 

The  obligor  can  direct  another  in  his  presence  to  sign  his  name  to 
a  sealed  instrument,  and  it  is  sufficient;  but  if  the  obligor  is  not 
present,  the  agent  must  have  authority  under  seal.  Delius  v.  Caw- 
thorne,  13—90;  Harshaw  v.  McKesson,  65—688;  Bryson  v.  Lucas,  84 — 
680;  Boyd  v.  Turpin,  94 — 139;  Cadell  v.  Allen,  99—542;  Drumnght  v. 
Philpot,  16  Ga.,  424,  60  A.  D.,  738;  Lewis  v.  Watson,  98  Ala.,  479,  39 
A.  S.  R.,  82;  Blaisdell  v.  Leach,  101  Cal.,  405,  40  A.  S.  R.,  65;  Ford 
v.  Ford,  27  App.  Cas.  (D.  C),  401,  7  Ann.  Cas.,  245;  Gardner  v.  Gardner, 
5   Cush.,  483,   52  A.   D.,  740. 

3.  Sealing. 

What  is  a  seal. — "Seals  were  properly  emblems  impressed  on 
wax,  or  some  material  susceptible  of  receiving  and  retaining  an 
impression.  In  this  State,  from  necessity  or  from  some  accidental 
cause,  our  forefathers  early  adopted  as  a  seal,  or  in  lieu  of  one, 
a  scrawl ;  and  our  courts  have  for  a  long  period  given  to  it  all  the 
efficiency  of  a  seal — in  fact,  have  considered  it  as  a  seal.     In  Vir- 


CONTRACTS    UNDER    SEAL.  93 

ginia  it  is  considered  a  seal,  if  in  the  writing  it  appears  that  the 
parties  so  called  or  so  understood  it,  as,  'witness  my  hand  and 
seal.'  In  our  State  no  such  rule  has  been  established."  YaT- 
borough  v.  Monday,  13  N.  C,  493. 

A  square  piece  of  paper  with  a  wafer  is  as  much  a  seal  as  a  scrawl 
with  the  word  "seal"  written  in  it,  if  intended  by  the  parties  as  such; 
and  in  registration  the  register  could  only  make  a  symbolical  seal  to 
stand  as  a  copy.  Hughes  v.  Debnam,  53—127.  Whether  there  is  a 
scrawl  or  seal  is  a  question  for  the  jury;  whether  what  is  used  is  suffi- 
cient as  a  seal,  is  a  question  for  the  judge.  Baird  v.  Reynolds,  99—469; 
State  v.  Worley,  33—242.  See  also,  Cromwell  v.  Tate,  7  Leigh,  301,  30 
A.  D.,  506;  Hacker's  Appeal,  121  Penn.,  192,  15  Atl.,  500,  1  L.  R.  A.,  861; 
Seals,   Cent.   Dig.,  sec.  4;   Dec.  Dig.,   sec.  3. 

(43)    PICKENS   v.   RYMER, 

90  N.   C,  282—1884. 

This  action  was  brought  to  recover  the  amount  due  on  a  note  of 
which  the  following  is  a  copy :  "Twelve  months  after  date  we  or 
either  of  us  promise  to  pay  to  J.  T.  Pickens  ninety  dollars  for 
value  received  of  him,  as  witness  our  hands  and  seals,  with  interest 
from  date.     October  22,  1861." 

T.  B.  Rymer. 
(Signed)         F.  M.  Ballew.        (Seal.) 

On  this  note  two  credits  were  endorsed — one  November  1,  1869, 
and  the  other  January  3,  1871. 

Plaintiff  proved  the  execution  of  the  note,  and  defendant  pleaded 
payment  and  the  statute  of  limitations.  The  plaintiff's  counsel 
submitted  the  note  to  the  inspection  of  the  court  and  admitted, 
that  if  it  was  not  a  note  under  seal,  the  defendant's  plea  of  the 
statute  of  limitations  would  be  a  bar,  and  upon  an  intimation  from 
the  court  that  the  jury  would  be  instructed  that  it  was  not  a  note 
under  seal  as  to  the  defendant,  Rymer,  plaintiff  submitted  to  a 
judgment  of  nonsuit  and  appealed. 

Ashe,  J.  The  only  question  presented  for  the  consideration  of 
this  court  is  whether  there  was  error  in  the  instruction  His  Honor 
intimated  he  would  give  the  jury. 

Such  an  instruction  would  have  been  manifestly  erroneous.  A 
seal  is  an  essential  requisite  of  a  deed,  and  no  writing  without  a 
seal  can  be  a  deed.  Shep.  Touch.,  56.  Blackstone  also  lays  it 
down  as  an  indispensable  requisite  of  a  good  deed  (vol.  2,  304)  ; 
and  there  is  no  question  that  two  or  more  persons  may  adopt  the 
same  seal.  There  is  abundant  authority  on  this  point.  It  was  so 
held  in  Yarborough  v.  Monday,  3  Dev.,  420,  where  this  court  said: 
"Two  parties  may  adopt  the  same  seal,  and  in  that  event  it  is  the 
deed  of  both,  otherwise  it  is  the  deed  of  one  and  the  simple  con- 


94  FORMATION    OF    CONTRACT. 

tract  of  the  other."  To  the  same  effect  are  Hollis  v.  Pond,  7 
Hump.,  222;  Pequaket  Bridge  v.  Mathis,  7  N.  H.,  232;  Bonham 
v.  Lewis,  3  Monroe  (Ky.),  376;  4  Term  Rep.,  313,  and  3  Ves., 
578. 

These  authorities  not  only  establish  the  principle  that  two  or 
more  persons  may  adopt  one  seal,  but  they  establish  the  further 
principle  that,  whether  the  party  subscribing  a  deed,  opposite 
whose  name  there  is  no  seal,  intended  to  adopt  the  seal  of  another 
signer  who  has  made  his  seal,  is  a  question  of  fact  for  the  jury, 
and  the  Judge  can  not  upon  inspection  instruct  the  jury  that  it  is 
or  is  not  a  deed  of  one  of  the  parties,  as  that  would  be  deciding 
both  the  law  and  the  fact,  and  in  this  consisted  the  error  committed 
by  His  Honor  in  the  court  below  He  said  he  should  instruct  the 
jury  that  it  was  not  the  deed  of  the  defendant.  That  was  decid- 
ing both  the  law  and  the  fact  and  leaving  nothing  for  the  jury  to 
decide ;  whereas  he  should  have  told  the  jury  that  two  persons  may 
adopt  the  same  seal,  but  whether  it  was  the  sealed  or  unsealed  in- 
strument of  the  defendant  was  a  question  of  intention  which  was 
a  fact  to  be  determined  by  the  jury,  and  the  onus  lay  on  the  plain- 
tiff to  prove  that  the  defendant  adopted  the  seal  or  scroll.  Hollis 
v.  Pond,  supra.  And  in  the  case  of  Yarborough  v.  Monday,  supra, 
the  court  held  the  question  whether  both  parties  adopted  the  same 
seal  was  one  for  the  jury  and  not  for  the  Judge.  And  in  the 
Kentucky  case  Bonham  v.  Lewis,  supra,  which  was  an  action  upon 
a  note  signed  by  two  parties  with  only  one  seal  opposite  the  name 
of  the  first  signer,  there  was  a  demurrer  to  the  declaration,  and 
the  court  in  their  opinion  say:  "Where  an  instrument  with  one 
seal  and  two  or  more  signers  is  alleged  to  be  sealed  by  all,  the 
court  is  not  authorized  to  infer,  from  there  being  but  one  seal  and 
two  or  more  signers,  that  but  one  in  fact  sealed  the  instrument; 
and  the  party  who  contends  that  it  is  not  his  seal  must  reach  the 
fact  by  way  of  plea,  and  as  one  seal  may  be  the  seal  of  many 
signers,  the  court  from  bare  inspection  of  the  paper  and  declara- 
tion can  not  decide  that  it  is  the  seal  of  one  only." 

Error.  Venire  de  novo. 

Two  parties  may  adopt  the  same  seal,  and  the  instrument  become 
the  bond  of  both;  otherwise  it  is  the  deed  of  one  and  the  simple  con- 
tract of  the  other.  Yarborough  v.  Monday,  14 — 420;  Green  v.  Thornton, 
49—230;  Davis  v.  Goldston,  53—28.  In  Yarborough  v.  Monday,  13— 
493,  there  were  two  parties  and  one  seal.  The  court  says,  it  is 
ordinarily  taken  to  be  the  seal  of  the  one  whose  name  is  written  nearest, 
but  it  may  be  shown  by  other  evidence  that  it  was  adopted  by  both. 
Henderson,  C.  J.,  in  dissenting  as  to  the  necessity  for  further  evidence, 
contends  that  the  word  "indenture"  used  in  the  instrument  is  suffi- 
cient. That  the  seal  is  opposite  the  name  of  the  witness  instead  of 
the  grantor  does  not  destroy  the  validity  of  the  deed.  Harrell  v.  Butler, 
92—20.  See,  Davis  v.  Burton,  3  Scam.  (111.),  41,  36  A.  D.,  511;  Pequaw- 
hett  Bridge  v.  Mathes,  7  N.  H.,  230,  26  A.  D.,  737;  35  Cyc,  1173;  6 
R.  C.  L.,  642;  Seals,  Cent.  Dig.,  sec.  7;  Dec.  Dig.,  sec.  4. 


CONTRACTS    UNDER    SEAL,.  95 

Partners. — One  partner  can  not  bind  the  firm  by  seal  unless  he  has 
authority  under  seal,  but  the  obligation  may  be  his  sealed  contract  and 
the  simple  contract  of  the  firm.  Burwell  v.  Linthicum,  100 — 145;  Hol- 
land v.  Clark,  67—104;  Fisher  v.  Pender,  52 — 483;  Froneberger  v.  Henry, 
51 — 548;  Taylor  v.  School  Com.,  50—98;  Osborn  v.  Mfg.  Co.,  50—177. 
But  this  distinction  is  now  limited  to  such  contracts  as  must  be  executed 
under  seal;  in  all  others  the  seal  is  surplusage.  Pipe  and  Foundry  Co. 
v.   Woltman,    114—178. 

Tax  deeds. — Where  the  form  of  deed  prescribed  for  sheriffs  in  tax 
sales  did  not  contain  a  seal,  but  concluded  "given  under  my  hand  and 
seal,"  the  actual  use  of  the  seal  was  necessary,  and  the  conveyance  with- 
out it  was  void.  Patterson  v.  Galliher,  122 — 511;  Fisher  v.  Owens,  133 — 
686;  Strain  v.  Fitzgerald,  128—396.  But  in  Geer  v.  Geer,  109—679,  a  deed 
without  seal  was  held  to  be  an  equitable  title,  under  the  circumstances 
of  the  case.     See  also  Arnt  v.  Arrington,  105 — 377. 

Grants. — Grants  issued  by  the  State  are  proved  by  the  seal  and  the  fact 
that  it  does  not  appear  of  record  that  a  scroll  or  imitation  of  the  seal  was 
copied  thereon  does  not  invalidate  the  registry.  Broadwell  v.  Morgan, 
142-475;  Aycock  v.  R.  R.,  89—323. 

Mistake. — A  seal  attached  by  mistake  may  be  corrected  in  equity, 
Lynam  v.  Califer,  64 — 572;  or  one  omitted  by  mistake  may  be  supplied. 
McCown  v.  Sims,  69 — 159. 

See  discussion  of  the  origin  and  manner  of  signing,  sealing  and  de- 
livery, by  Haywood,  J.,  in  Ingram  v.  Hall,  2 — 193.  Mordecai's  Lec- 
tures, 807. 

In  some  states  it  is  necessary  that  there  should  be  a  recognition 
of  the  seal  by  words  used  in  the  body  of  the  instrument.  Bradley  Salt 
Co.  v.  Norfolk  Imp.  &  Exp.  Co.,  95  Va.,  461,  28  S.  E.,  567;  Grimsley 
v.  Riley,  5  Mo.,  280,  32  A.  D.,  319.  The  use  of  the  words  "given  under 
my  hand  and  seal"  will  not  make  it  a  deed,  if  in  fact  no  seal  is  used; 
nor  will  a  seal  generally  be  presumed  from  the  use  of  such  words. 
Strain  v.  Fitzgerald,  128—396;  Fisher  v.  Owens,  132 — 686;  Dunlap  v. 
Willett.  158—317;  Burnett  v.  Young,  107  Va.,  184,  57  S.  E.,  641,  12 
Ann.  Cas.,  982;  35  Cyc,  1172;  Hubbard  v.  Swofford  Bros.  Co.,  209 
Mo.,  495,  108  S.  W.,  15,  123  A.  S.  R.,  488. 

In  many  States  the  necessity  and  effect  of  a  seal  have  been  modified 
or  abolished  by  statute.  Sauger  v.  Warren,  91  Tex.,  472,  66  A.  S.  R., 
913;  35  Cyc,   1168. 

4.    Delivery. 

1.   IN   GENERAL. 

(44)   PHILLIPS  v.  HOUSTON,  Admr., 
50   N.    C,   302—1858. 

This  was  an  action  of  detinue  for  a  slave.  Frances  Phillips, 
the  plaintiff's  mother  and  the  defendant's  intestate,  asked  one 
Kinnair  to  draw  a  deed  of  gift  to  the  plaintiff  for  a  slave.  There- 
upon Kinnair  wrote  the  deed  of  gift  to  the  plaintiff,  and  it  was 
signed  and  sealed  by  the  mother,  and  witnessed  by  Kinnair  and 
one  Holland.  She  delivered  the  deed  to  Holland,  and  requested 
him  to  take  it  to  the  courthouse  and  have  it  recorded.  Holland 
failed  to  do  this,  but  returned  the  deed  to  the  donor.  She  then 
gave  it  to  one  Kennedy,  with  directions  to  deliver  it  to  one  Moore, 
with  a  request  that  he  should  take  it  to  court  and  have  it  recorded. 


96  FORMATION    OF    CONTRACT. 

Kennedy  placed  the  deed  among  his  papers,  and  forgot  it  until 
after  the  death  of  the  donor,  Mrs.  Phillips;  then  he  gave  it  to 
Moore,  who  had  it  proved  and  registered.  The  jury  returned  a 
verdict  in  favor  of  the  plaintiff,  subject  to  the  opinion  of  the 
court,  upon  the  question  whether  the  deed  was  duly  delivered, 
under  the  circumstances  above  stated.  His  Honor  being  of  opin- 
ion with  the  plaintiff,  gave  judgment  on  the  verdict,  and  defendant 
appealed. 

Battle;,  J.  In  the  case  of  Hall  v.  Harris,  40  N.  C,  303,  it 
was  said  by  the  court,  that  the  delivery  of  a  deed  "depends  upon 
the  fact  that  a  paper,  signed  and  sealed,  is  put  out  of  the  posses- 
sion of  the  maker."  That,  we  think,  is  the  true  test,  and  if  it 
appear  that  the  grantor,  or  donor,  has  parted  with  the  possession 
of  the  instrument  to  the  grantee  or  donee,  or  to  any  other  person 
for  him,  the  delivery  is  complete,  and  the  title  of  the  property 
granted,  or  given  thereby,  passes.  But  it  will  be  otherwise,  if  the 
grantor  or  donor  retain  any  control  over  the  deed;  as  if  he,  when 
he  hands  it  to  a  third  person,  request  him  to  keep  it  and  deliver 
it  to  the  person  for  whom  it  is  intended,  unless  he  shall  call  for  it 
again.  These  principles  will  be  found  to  govern  all  the  cases  be- 
ginning with  Tate  v.  Tate,  21  N.  C,  22,  running  through  Baldwin 
v.  Maultsby,  27  N.  C,  505;  Snider  v.  Lockenour,  37  N.  C,  360; 
Ellington  v.  Currie,  40  N.  C,  21;  Roe  v.  Lovick,  43  N.  C,  88; 
Gaskill  v.  King,  34  N.  C,  211,  and  Newlin  v.  Osborne,  49  N.  C, 
157,  down  to^Airey  v.  Holmes,  50  N.  C,  142.  Tried  by  the 
above-mentioned  test,  the  delivery  of  the  deed,  in  the  present  case, 
must  be  declared  to  be  complete.  The  donor  handed  the  paper, 
signed  and  sealed,  to  a  third  person,  for  the  use  of  the  donee, 
without  any  reservation  whatever,  and  when  it  was  returned  to 
her,  she  immediately  handed  it  to  another  person,  for  the  donee, 
without  the  slightest  intimation  that  she  was  to  have  any  control 
over  it.  The  delivery,  however,  was  perfect,  when  the  instrument 
was  handed  to  the  first  person,  and  it  made  no  difference  whether 
it  was  registered  before  or  after  the  donor's  death.  His  Honor 
was  right  in  giving  judgment  for  the  plaintiff,  and  the  judgment 
must  be  affirmed. 

Per  Curiam.  Judgment  affirmed. 

(45)   PARKER  to  the  use  of  RESPASS  v.  LATHAM, 

44  N.   C,  138—1852. 

This  was  an  action  of  debt  on  a  bond.  Pleas,  non  est  factum, 
and  that  plaintiff  never  acquired  title  to  the  bond  by  endorsement. 
The  following  is  a  copy  of  the  bond  and  the  endorsement : 

"One  day  after  date  we  promise  to  pay  Martha  A.  Parker,  guar- 


CONTRACTS    UNDER    SEAL.  97 

dian  of  the  minor  heirs  of  James  Parker,  dee.,  the  sum  of  three 
hundred  and  forty  dollars  for  value  received.  Witness  our  hands 
and  seals,  this  26  May,  1848. 

William  Ellison.  (Seal.) 
D.  H.  Latham.  (Seal.) 
W.  A.  Lanier.         (Seal.) 

Witness : 

D.  H.  Farrow. 
On   which   was  endorsed — 

"Pay  the  within  to  Isaiah  Respass,  without  recourse  on  .  me, 
June  3,   1848.        (Signed)      Martha  A.   Parker." 

Upon  the  facts,  His  Honor  was  of  opinion  with  the  plaintiff, 
and  rendered  judgment  accordingly,  from  which  defendant  ap- 
pealed. 

Nash,  C.  J.  The  action  is  on  a  sealed  instrument  called  a 
single  bill,  not  assignable  at  common  law,  but  made  so  by  statute. 
A  man  by  the  name  of  Ellison  is  the  principal,  and  it  is  admitted 
that  the  present  defendants  were  his  sureties.  The  bond  is  made 
payable  to  the  plaintiff  as  guardian,  and  intended  to  raise  money 
for  the  use  of  Ellison.  It  was  executed  by  the  defendants  and 
Ellison,  and  sent  by  an  agent  to  the  plaintiff,  who  refused  to  accept 
it.  Subsequently  it  was  sent  back  to  her  by  Ellison,  with  the  en- 
dorsement as  it  now  appears,  written  by  him,  with  the  request  to 
her  to  sign  it,  for  that  Respass,  for  whose  benefit  the  action  was 
brought,  would  then  advance  the  money  upon  it.  She  did  so,  and 
the  sole  inquiry  presented  to  us,  is  as  to  the  legal  validity  of  the 
instrument. 

Delivery  is  an  essential  part  of  every  deed,  and  as  there  is  no 
set  form  of  words  or  of  acts  by  which  it  may  be  done,  any  words 
or  acts  on  the  part  of  the  obligor  or  grantor,  which  show  the 
animus  disponendi,  will  be  sufficient.  As  if  a  deed  be  sealed  and 
lying  on  a  window,  and  the  grantor  say  "there  it  is,  take  it  as  my 
deed,"  or,  "this  will  serve" — these  are  good  deliveries.  (Shep. 
Touch.,  124,  Thomas  Coke  2,  vol.  276.)  It  is  not  pretended  that 
when  first  presented  to  Mrs.  Parker  there  was  any  delivery,  for 
she  expressly  refused  to  accept  it;  and  acceptance  by  the  grantee 
or  obligee  is  as  necessary  to  valid  delivery  as  the  transfer  on  the 
part  of  the  obligor  or  grantor.  Woodman  v.  Coolbroth,  7  Greenl. 
Rep.,  181.  But  it  is  agreed  that  the  second  delivery  was  com- 
pleted by  the  endorsement  of  the  obligee.  Without  inquiring 
whether,  under  the  special  circumstances  of  this  case,  her  endorse- 
ment was  an  acceptance  or  not,  we  think  it  was  not  such  accept- 
ance as  bound  these  defendants.  We  have  seen  that  the  consent 
of  the  maker  of  a  deed  is  essential  to  a  delivery.     If  the  circum- 


98  FORMATION    OF    CONTRACT. 

stances  go  to  show  that  he  did  not  consent,  it  is  not  his  deed,  even 
though  he  signed  and  sealed  it,  and  was  hound  by  a  previous  con- 
tract to  deliver  it.     Coolbroth's  case,  supra.     If  a  man  throws  a 
deed  on  the  table,  and  says  nothing,  and  the  other  party  takes  it, 
this  does  not  amount  to  a  delivery,  unless  the  jury  find  it  was  put 
there  with  an  intent  to  deliver.     Owen,  95;  1  Leon.,  140;  1  Touch., 
124,  n.  28.     If  a  patron  draws  a  presentation  in  writing  and  puts 
his  seal  to  it,  and  leaves  it  in  his  study,  and  the  party  for  whom 
it  is  prepared  gets  it  without  the  license  or  privity  of  the  patron, 
and  brings  it  to  the   Bishop,  and  is  thereupon  instituted  and  in- 
ducted, it  is  all  void.     (Yelverton,  7.)     Where  the  first  delivery  of 
a  deed   fails   for  want  of  acceptance  by  the  grantee,  then  a  new 
delivery  must  be  made  ;  otherwise  the  deed  is  void.     13  Vin.  Abrid. 
Title  Deeds,  n.  2,  p.  27.     What  are  the  circumstances  of  this  case? 
The  instrument  declared  on  was  signed  and  sealed  by  Ellison  and 
the  two  defendants,  for  the  purpose  of  borrowing  money  from  the 
plaintiff,    Mrs.    Parker.      She   refused   to   accept    it.      It    was   then 
functus  officio,  and  to  give  it  vitality  a  second  or  new  delivery  was 
necessary.     To  this  second  or  new  delivery  the  assent  of  the  de- 
fendants was  necessary,  so  as  to  bind  them.     There  is  nothing  in 
the  case  to  show  that  they  did  so  assent ;  on  the  contrary,  there  is 
much   to   show   they  never   did.     The  bond   is   dated   the   26th   of 
May,  1848,  payable  one  day  after  date,  and  the  money  was  for  the 
use' of  Ellison,  as  we  understand.     On  the  3d  of  June   following, 
eight  days  thereafter,  it  is  endorsed  to  Respass  by   Mrs.   Parker, 
the  obligee.     It  does  not  appear  that  the  present  defendants  knew 
that  the  money  was  not  received  from  her  upon  the  first  applica- 
tion.    Again,  when  the  instrument  was  presented  to  Mrs.   Parker 
the  second  time,  it  was  not  for  the  purpose  of  getting  money  from 
her,   for   she  had   refused  to   advance   it,   but    from  Respass,   who 
actually  did  advance  it  to  Ellison — he  was,  in  substance,  the  obligee. 
If  the  present  defendants  did  know  that  it  could  not  be  procured 
from  Mrs.  Parker,  but  that  Respass  was  to  advance  it,  why  was 
not  the  instrument  made  payable  to  the  latter?     The  endorsement 
gave  to  Respass  no  additional  security,  for  it  discharged  Mrs.  Par- 
ker from  all  responsibility.     It  is  obvious  that  Ellison  managed  the 
latter  part  of  the  business  without  consulting  the  defendants.     If 
he  could,  without   a   renewed  authority   from  the   defendants,   de- 
liver it  eight  days  after  the  first,  why  not  in  eight  months?     The 
instrument  in  its  original  concoction  was  not  intended  by  defend- 
ants to  be  thrown  into  market  to  raise  funds   from  any  one  who 
would  advance  them  ;  but  from  a  specified  individual,  and  that  per- 
son   refusing  to   lend   money  upon   it,   it  must   be   shown   that  the 
defendants  agreed  to  the  new  intent,  that   is,  to  becoming  bound 
to  Respass,  which  does  not  appear. 


CONTRACTS    UNDER    SEAL.  99 

But,  it  is  argued  on  behalf  of  the  plaintiff,  that  as  by  our  Act  of 
Assembly,  bonds  are  made  negotiable,  that  therefore  they  are 
transferable  by  endorsement  as  bills  of  exchange  and  notes  of 
hand,  and  are  governed  by  the  same  rules  and  regulations.  That 
is  true ;  after  the  endorsement,  the  laws  governing  bills  of  ex- 
change and  promissory  notes  do  apply  to  them.  But  still  the  in- 
strument being  a  sealed  instrument  must  possess  all  the  requisites 
to  make  it  a  good  deed.  If  it  be  deficient  in  any  such  property, 
the  endorsement  can  not  supply  the  defect ;  it  can  not  make  that 
legal  which  never  was  so.  Upon  this  point  we  consider  the  case 
of  Marsh  v.  Brooks,  33  X.  C,  409,  full  authority.  In  replying  to 
this  particular  argument,  the  court  say  the  instrument  must  be  a 
perfect  bond  for  money,  before  it  can  be  negotiated ;  and  further, 
although  the  law  of  the  State  makes  bonds  negotiable,  yet  their 
nature  in  their  inception,  and  before  endorsement,  is  not  touched 
by  the  statute,  and  remains  as  at  common  law. 

We  think  there  is  error  in  the  judgment  below. 

Per  Curiam,     judgment  reversed,  and  venire  de  novo  awarded. 

For  similar  cases,  see,  Whichard  v.  Tordan.  51 — 54;  Dewey  v.  Coch- 
ran. 49—184. 

What  constitutes  delivery.  1.  The  grantor  must  part  with  control 
over  the  instrument.  The  delivery  of  the  deed  is  its  tradition  from 
the  maker  to  the  person  to  whom  it  is  made,  or  to  some  person  for 
the  use  of  the  grantee.  It  is  in  all  cases  essential  that  the  instrument 
pass  out  of  and  beyond  the  control  of  the  grantor  and  into  the  actual 
or  constructive  control  of  the  grantee;  so  long  as  the  grantor  retains 
control  over  or  the  right  to  recall  the  paper,  it  can  not  be  said  to  have 
been  delivered.  Weaver  v.  Weaver,  159—18;  Dunlap  v.  Willett.  153— 
317;  Gaylord  v.  Gaylord.  150—222;  Tolar  v.  Tolar,  16-^*60:  Blackwell 
v  Lane,  20—245:  Waddell  v.  Waddell,  36 — 475;  Smith  v.  Moore.  149 
—185;  Fortune  v.  Hunt,  149—358;  Brown  v.  Westerfield,  47  Neb.,  399, 
53  A.  S.  R..  532;  Porter  v.  Woodhouse.  59  Conn.,  568,  21  A.  S.  R.,  131. 
13  L.  R.  A.,  64:  an  intention  that  the  instrument  shall  take  effect 
though  retained  by  the  grantor,  is  not  generally  a  sufficient  delivery. 
Baldwin  v.  Maultsby,  27 — 505;  Jones  v.  Jones,  6  Conn..  Ill,  16  A.  D.. 
35;  Martin  v.  Flaherty,  13  Mont..  96,  48  A.  S.  R.,  415,  19  L.  R.  A..  242. 
The  rule  is  not  so  strict  in  insurance  contracts.  Xenos  v.  Wickham.  13 
E.  R.  C.  422;  Hardy  v.  Ins.  Co..  154 — 430:  Manfg.  Co.  v.  Assur.  Co., 
161 — 88;  Pender  v.  Ins.  Co.,  163—98. 

The  delivery  of  the  deed  is  a  question  of  fact  to  be  determined  by  the 
jury  from  all  the  circumstances.  Floyd  v.  Taylor,  34 — 47;  Williams  v. 
Springs,  29 — 384.  But  the  fact  that  the  wife  saw  the  grantor  "hand  the 
deed"  to  her  husband  is  not  sufficient  evidence  of  delivery;  it  must  be 
delivered  by  the  grantor  as  his  deed.  In  this  case  the  deed  was  not 
proved  nor  registered,  and  was  found  in  the  grantor's  possession.  John- 
son v.  Cameron,  136—243.  If  the  deed  has  not  been  delivered  to  the 
grantee,  or  to  anyone  for  him,  his  name  could  be  erased;  and  if  the 
grantor  told  one  grantee  to  erase  the  name  of  another  grantee  before 
delivery,  and  then  to  have  the  deed  registered,  this  is  sufficient  delivery, 
even  though  the  deed  was  not  registered.  Wetherington  v.  William^, 
134—276. 

2.  Delivery  to  third  person. — When  the  maker  parts  with  the  posses- 
sion of  a  deed  and  directs  that  it  be  delivered  to  the  grantee,  without 
any  condition  expressed,  there  is  a  presumption  that  it  was  then  de- 
livered as  a  deed  for  the  benefit  of  the  grantee.     Morrow  v.  Alexander, 


100  formation  of  contract. 

25 — 388.  Where  a  deed  is  given  to  an  agent  for  the  prin- 
cipal without  the  right  of  the  grantor  to  recall  it,  the  delivery- 
is  complete.  Bond  v.  Wilson,  129 — 325.  The  delivery  of  a  deed 
to  a  third  person  for  the  use  of  the  grantee  is  sufficient,  although  such 
person  is  a  stranger  and  not  the  agent  of  the  grantee,  provided  the 
grantee  assents  to  it.  Wesson  v.  Stephens,  37 — 557;  Green  v.  Kornegay, 
49 — 66;  and  the  grantee  is  presumed  to  assent  unless  shown  to  the 
contrary.  McLean  v.  Nelson,  46 — 396.  The  grantee  executed  a  deed 
to  his  infant  son  and  delivered  it  to  his  wife  for  the  benefit  of  his  son, 
and  this  was  a  valid  delivery.  Gaskill  v.  King,  34 — 211.  M.  executed 
a  note  under  seal  payable  to  his  daughter,  and  delivered  it  with  a 
letter  of  instruction  to  a  third  person  for  the  benefit  of  his  daughter; 
this  was  sufficient  delivery.  Ducker  v.  Whitson,  112 — 44.  But  where  the 
grantor  handed  the  deed  to  a  third  person  to  hold  till  he  called  for  it, 
and  died  without  having  called  for  it,  there  was  no  delivery,  and  a  clause 
in  the  grantor's  will  giving  to  the  grantee  property  "in  addition  to  what 
1  have  given  him  by  deed,"  is  not  sufficient  to  incorporate  the  deed  into 
the  will  and  pass  title  to  the  land.  Bailey  v.  Bailey,  52 — 44;  (and  as  to 
last  point  see  also  Chambers  v.  McDaniel,  28 — 226,  and  Siler  v.  Dorsett, 
108 — 300).  A  constable's  bond  payable  to  the  State,  taken  by  one  not 
authorized  to  take  it,  is  void  for  want  of  delivery.  State  v.  Shirley,  23 — 
597;  but  if  such  bond  is  found  in  the  custody  of  one  whose  duty  it  is 
to  keep  it,  the  proper  delivery  is  presumed.  Battle  v.  Baird,  118 — 854; 
Kello  v.  Magett,  18 — 414.  See  also,  Kirk  v.  Turner,  16 — 14;  Robbins  v. 
Rascoe,  120 — 80;  Buchanan  v.  Clark,  164 — 56;  Brown  v.  Westerfield,  47 
Neb.,  399,  53  A.  S.  R.,  532;  Munro  v.  Bowles,  187  111.,  346,  58  N.  E.,  331. 
54  L.  R.  A.,  865;  Renehan  v.  McAvoy,  116  Md.,  356,  81  Atl..  586,  38 
L.   R.  A.    (N.  S.),  941;   Huddleston   v.   Hardy,   164— 210. 

Where  the  grantor  delivers  the  deed  to  a  third  person,  to  be  delivered 
to  the  grantee  after  the  grantor's  death,  it  is  a  good  delivery;  but  if 
the  grantor  retains  the  deed,  and  directs  a  third  person  after  his  death 
to  get  it  and  deliver  it  to  the  grantee,  it  is  not  valid.  Baldwin  v. 
Maultsby,  27—505;  Stone  v.  French,  37  Kan.,  145,  1  A.  S.  R.,  237,  and 
cases   above    cited. 

Possession  of  the  deed. — A  deed  signed  and  sealed  by  the  grantor  and 
found  in  the  possession  of  the  grantee  is  presumed  to  have  been  deliv- 
ered, but  this  may  be  rebutted  by  evidence  that  it  was  obtained  without 
the  grantor's  consent.  Whitman  v.  Shingleton,  108 — 193;  Blume  v. 
Bowman,  24 — 338;  Clayton  v.  Liverman,  20 — 238;  Gaskill  v.  King,  34 — 
211;  Moore  v.  Collins,  15—384;  Devereux  v.  McMahon,  108—134.  Proof 
of  the  handwriting  of  the  obligor  and  the  possession  of  the  bond  by  the 
obligee  is  evidence  from  which  the  jury  may  presume  a  delivery.  Wil- 
liams v.  Springs,  29 — 384.  But  if  no  obligee  is  named  in  the  bond,  as 
when  made  payable  to  bearer,  delivery  to  a  particular  person  will  not 
supply  the  defect,  Phelps  v.  Call,  29 — 262;  this,  however,  is  held  not  to 
apply  to  corporation  bonds  payable  to  bearer.  Weith  v.  Wilmington, 
68—24. 

2.    PROBATE    AND    REGISTRATION    AS    EVIDENCE    OF    DELIVERY. 

(46)    HELMS  v.  AUSTIN, 

116  N.  C,  751,  21   S.   E.,  556—1895. 

Faikci.otii,  C.  J.  This  was  an  action  for  partition  before  the 
Clerk,  and  was  transferred  to  the  Superior  Court.  The  defend- 
ants denied  that  the  plaintiffs  had  any  interest  in  the  land  to  be 
divided,  which  was  equivalent  to  the  plea  of  "sole  seisin."  The 
question  arises  upon  three  deeds  made  by  Ennis  Staton,  of  the  first 
part,   and    "Sarah    Staton,   his    wife   and   her   heirs,   named   on   the 


CONTRACTS    UNDER    SEAL.  101 

back  of  this  deed,  of  the  other  part,"  the  said  Ennis  Staton  re- 
serving his  life  estate  in  the  lands  conveyed,  and  the  consideration 
named  is  love  and  affection.  On  the  back  of  each  deed  is  endorsed 
the  names  of  the  several  children  of  the  grantor,  the  plaintiff's 
name  being  one  each  time.  In  the  third  deed  the  conveyance  is  to 
"Sarah  Staton,  his  wife  and  her  children,"  and  in  the  endorsement 
on  the  back  thereof,  after  repeating  the  names  of  the  same  chil- 
dren as  in  the  other  two,  it  is  stated,  "and  if  the  said  Sarah  Staton 
should  ever  have  any  other  child  or  children,  that  he  or  they  shall 
have  an  equal  share  with  the  above  heirs." 

The  deeds  were  dated  September  13,  14,  and  15,  1869,  and  were 
registered,  after  probate,  on  August  26,  1870,  and  September  2, 
1870.     .     .     . 

The  defendants  insisted  that  these  deeds  were  never  delivered, 
and  relied  upon  the  endorsement  on  the  deeds  made  by  the  Pro- 
bate Judge  at  the  time  the  deeds  were  acknowledged  by  the  grant- 
or and  ordered  to  be  registered,  and  upon  subsequent  acts  and  dec- 
larations of  the  grantor,  to  rebut  the  implication  of  delivery  arising 
from  the  registration.  The  endorsement  was  as  follows :  "The 
cause  of  my  giving  my  family  my  lands  by  deed  as  well  as  by  will 
is  in  order  to  give  the  courses  and  distances  of  the  same."  It  is 
admitted  that  Ennis  Staton  retained  possession  of  the  deeds  after 
their  registration,  and  remained  in  possession  of  the  land  and  listed 
it  for  taxes  until  his  death.  These  admitted  facts  are  all  consistent 
with  the  fact  that  the  grantor  retained  a  life  estate,  and,  taken 
alone,  have  no  tendency  to  rebut  the  implication  of  delivery  aris- 
ing from  the  registration. 

In  a  case  "on  all  fours"  with  the  present,  it  was  held  by  this 
court  that  where  the  donor  went  into  court  and  acknowledged  a 
deed  of  gift  for  the  purpose  of  registration  and  it  was  accordingly 
registered,  that  was  a  delivery,  and  that  any  subsequent  declara- 
tion that  it  had  not  been  delivered  and  was  not  to  have  effect  did 
not  invalidate  it.  Airey  v.  Holmes,  50  N.  C,  142;  Ellington  v. 
Currie,  49  N.  C,  21.  These  cases  dispose  of  the  defendant's  ex- 
ceptions to  the  exclusion  of  their  proposed  evidence. 

Where  the  maker  once  parts  with  the  possession  or  control  of  a 
deed  he  can  not  afterwards  recall  it,  and  the  donee's  acceptance  is 
presumed,  especially  when  it  is  beneficial  to  him. 

Registration  of  a  deed  is  only  prima  facie  evidence  of  its  execu- 
tion, probate  and  delivery,  and  not  conclusive ;  for  otherwise  no 
fraud  or  mistake  could  be  corrected  in  either  respect.  The  pre- 
sumption arising  from  this  prima  facie  evidence  may  be  rebutted 
by  sufficient  evidence.  To  this  effect  is  Love  v.  Harbin,  87  N.  C, 
249,  and  various  other  cases,  including  the  text-books.  In  Mitch- 
ell v.  Ryan,  3  Ohio  State  Reports,  377,  it  was  held,  first,  that  a 


102  FORMATION    OF    CONTRACT. 

recorded  deed  is  prima  facie  evidence  of  delivery,  and  it  is  to  be 
presumed  that  the  maker  means  to  part  with  the  title,  and  that 
clear  proof  ought  to  be  required  to  warrant  a  court  in  holding 
otherwise ;  secondly,  that  where  a  grant  is  a  pure,  unqualified  gift, 
the  presumption  of  acceptance  can  be  rebutted  only  by  proof  of 
dissent.     .     .     .  Affirmed. 

Other  cases  holding  that  probate  and  registration  are  prima  facie 
evidence  of  delivery  are,  Wetherington  v.  Williams,  134 — 276;  Frank 
v.  Heiner,  117 — 79;  Perkins  v.  Thompson,  123 — 175;  Newlin  v.  Osborne, 
49—157;  Fortune  v.  Hunt,  149—358;  Pentico  v.  Hays,  88  Pac,  738,  9  L. 
R.  A.  (N.  S.).  224. 

Where  F.  executed  a  deed  to  K.  to  secure  certain  debts  and  delivered  it 
to  the  attesting  witness  to  have  it  registered,  and  the  witness  did  so, 
though  K.  was  absent,  had  no  knowledge  of  the  deed,  and  died  soon 
afterwards,  the  deed  was  valid.  Myrover  v.  French,  73—609.  Under  the 
circumstances  in  the  cases  of  Snider  v.  Lockenour,  37 — 360,  and  Redman 
v.  Graham,  80 — 231,  the  probate  and  registration  was  held  to  be  con- 
clusive on  the  grantor.  But  where  the  grantor  signed  and  sealed  the 
deed  and  acknowledged  it  for  probate,  and  the  grantee  refused  to  ac- 
cept it.  delivery  will  not  be  presumed  from  subsequent  registration. 
Gaither  v.   Gibson,  61 — 530. 

Acknowledgment  by  husband  and  wife,  with  private  examination  of 
the  wife,  before  a  justice  of  the  peace,  is  not  presumptive  evidence  of 
delivery,  but  only  preparation  for  delivery.  Tarlton  v.  Griggs,  131 — 
216.  (See  this  case  for  discussion  of  delivery,  with  numerous  cases  cited, 
by  Cook,  J.) 

3.    EFFECT   OF   DELIVERY. 

PHILLIPS  v.  HOUSTON, 
Ante    (44). 

The  grantor  signed  and  sealed  a  deed  and  delivered  it  to  the  clerk 
for  probate  and  registration,  but  before  the  probate  was  taken  he 
changed  his  mind,  took  the  deed  from  the  clerk  and  placed  it  among  his 
papers;  after  his  death  his  executor  destroyed  the  deed;  the  grantee 
knew  nothing  about  the  deed  or  its  recall;  the  execution  of  the  deed  was 
complete  and  could  not  be  revoked  by  the  grantor.  Robbins  v.  Rascoe, 
120 — 79.  (Clark  J.,  dissents.)  Defendant  executed  a  deed  by  signing 
and  probate,  then  exhibited  it  to  the  grantee  and  to  P>.,  from  whom  the 
grantee  was  to  get  the  money,  and  said  the  deed  was  all  right;  B.  let 
the  grantee  have  the  money  and  took  a  mortgage  on  the  land;  after- 
wards the  grantor  and  grantee  made  an  agreement,  without  the  knowl- 
edge of  B.,  to  let  one  W.  hold  the  deed  until  all  of  the  purchase-money 
was  paid;  the  execution  of  the  deed  was  complete  from  the  probate, 
and  the  parties  were  estopped  to  deny  the  validity  of  the  mortgage. 
Redman   v.    Graham,  80 — 231. 

An  estate  invested  by  deed  can  not  be  divested  by  redelivery  of  such 
deed  to  the  grantor,  even  with  the  endorsement,  "I  transfer  the  within 
deed  to  W.  again."  Linker  v.  Long,  64 — 296.  (This  seems  to  have  been 
after  registration.)  Before  registration,  the  deed  may  be  redelivered  or 
surrendered  and  a  new  deed  made,  if  there  is  no  fraud  and  no  other 
rights  have  intervened.  Perry  v.  Hackney,  142 — 368;  Davis  v.  Inscoe, 
84 — 396;  Hare  v.  Jernigan,  76—471;  Respass  v.  Jones,  102 — 5;  Austin  v. 
King,  91 — 286;  Ray  v.  Wilcoxon,  107 — 514;  but  a  married  woman  should 
reconvey.     Ibid.:   Miller  v.   Church,   112 — 626. 

After  delivery  and  before  registration,  if  the  deed  is  lost  or  destroyed, 
this  does  not  restore  the  estate  to  the  grantor.  Respass  v.  Jones,  102 — 5; 
Dagger  v.   McKesson,   100 — 1;   Ellington  v.   Currie.  40 — 21. 


CONTRACTS    UNDER    SEAL.  103 

A  deed  was  executed  to  the  wife  of  A  but  not  registered;  A  induced 
his  wife  to  return  the  deed,  and  then  had  a  new  deed  executed  to  him- 
self. A  purchaser  from  A  without  notice  would  hold  against  the  heirs 
of  the  wife.  Crump  v.  Black,  41 — 321.  But  a  purchaser  with  notice 
would  not  be  protected.  Tyson  v.  Tyson,  37 — 137;  Tyson  v.  Harrington, 
41—329. 

As  to  delivery  of  deed,  see  further  Mordecai's  Law  Lectures,  pp.  821- 
834;  2  Page  on  Cont.,  sees.  577-597;  13  Cyc,  526;  12  L.  R.  A.,  171,  and 
notes;  9  Am.  &  Eng.  Encyc,   150. 

The  delivery  of  a  policy  of  insurance  is  conclusive  of  the  contract's 
being  completed,  in  the  absence  of  fraud,  and  is  an  acknowledgment  that 
the  premium  was  paid  during  good  health.  Grier  v.  Life  Ins.  Co.,  132 — 
142.  See  also,  Kendrick  v.  Ins.  Co.,  124 — 317;  Gwaltney  v.  Assur.  Co., 
132—928;  Rayburn  v.  Casualty  Co.,  138—379;  141 — 431;  Hardy  v.  Ins. 
Co.,  154—430;  Gardner  v.  Ins.  Co.,  163—367;  Britton  v.  Ins.  Co.,  165— 
149;  Murphy  v.  Ins.  Co.,  167 — 334;  but  the  payment  of  the  premium 
may  be  a  condition  precedent.     Perry  v.  Ins.  Co.,  150 — 143. 

5.  Attestation. 

DEYEREUX  v.    McMAHON, 

Ante    (41). 

A  subscribing  witness  is  not  a  necessary  part  of  a  deed.  State  v. 
Gherkin.  29—206;    Blackwell   v.   Lane,  20—245. 

The  subscribing  witness  may  attest  the  signing  and  sealing,  and  the 
delivery  be  shown  by  a  third  person.  A  deed  was  signed  and  sealed  by 
the  grantor  but  not  delivered  in  the  presence  of  the  witness;  it  was 
afterwards  delivered  to  the  wife  of  the  grantor  for  the  benefit  of  the 
son,  the  grantee.  It  was  held  that  the  witness  could  prove  the  signing 
and  sealing,  which  would  be  sufficient  for  probate,  and  the  wife  could 
prove  the  delivery,  if  the  question  was  raised.  Gaskill  v.  King,  34 — 
211  (opinion  by  Ruffin,  C.  J.,  and  Pearson,  J.,  dissents);  Andrews  v. 
Shaw,  15 — 70;  Vines  v.  Brownrigg,  15 — 265;  Whitman  v.  Shingleton,  108 
— 193;  Mordecai's  Law  Lectures,  845. 

6.    Date. 

The  law  presumes,  nothing  further  appearing,  that  a  deed  was  de- 
livered when  it  bears  date,  though  it  is  not  essential  to  its  validity  that 
it  should  contain  a  date  at  all,  but  the  presumption  may  be  rebutted  by 
evidence  aliunde,  in  which  case  it  becomes  operative  from  the  actual 
day  of  delivery.  Vaughan  v.  Parker,  112 — 96;  Kendricks  v.  Dellinger, 
117 — 491:  Lyerly  v.  Wheeler,  34—290;  Meadows  v.  Cozart,  76 — 450; 
Newlin  v.  Osborne,  49—157;  2  Blk.,  304;  Goodson  v.  Whitfield,  40— 
163;  Mordecai's  Law  Lectures,  803.  Nichols  v.  Palmer,  4 — 319;  Lake 
Erie  R.  R.  v.  Whitham,  155  111.,  514;  40  N.  E.,  1014,  46  A.  S.  R.,  302. 
28  L.  R.  A.,  612;  Crabtree  v.  Crabtree,  136  Iowa,  430.  113  N.  W.,  923.  15 
Ann.    Cas.,    149. 

7.    Acceptance. 

PARKER  v.  LATHAM, 

Ante    (45). 

The  deed  being  for  the  benefit  of  the  grantee,  his  acceptance  is  pre- 
sumed until  the  contrary  is  shown.  Kirk  v.  Turner,  16 — 14;  McLean 
v.  Nelson,  46 — 396;  Green  v.  Kornegay,  49 — 66;  Tate  v.  Tate.  21 — 22; 
Bank  v.  Pugh,  8—198;  Lady  Superior  v.  McNamara.  3  Barb:  Ch..  375, 
49  A.   D.,   184;   Emmons  v.   Harding,   162  Ind.,   154,   1   Ann.   Cas.,  864. 


104  FORMATION    OF    CONTRACT. 

Where  a  deed  was  made  to  A  and  B,  and  without  B's  knowledge  was 
delivered  to  A,  then  B  refused  to  accept  it,  the  deed  was  not  valid  as 
to  B,  but  what  interest  A  took  under  it,  querc.  Baxter  v.  Baxter,  44 — 
341.  See  also  Whichard  v.  Jordan,  51 — 54;  Mordecai's  Law  Lec- 
tures, 835. 

8.  Escrow. 

(47)    HALL  v.  HARRIS, 

40    N.    C,    303—1848. 

Pearson,  J.  When  this  case  was  before  this  court  at  June 
Term,  1844,  it  was  decided  that  an  execution  does  not  bind  equit- 
able interests  and  rights  of  redemption  from  its  teste,  as  in  ordi- 
nary cases,  but  from  the  time  of  "execution  sued;"  and  it  was 
declared  that  the  plaintiff  would  be  entitled  to  a  decree,  provided 
the  deed,  under  which  he  claimed,  took  effect  before  the  execution, 
under  which  the  defendant,  Harris,  claimed  was  issued.     3   Ired. 

Eq.,  289. 

We  are  satisfied  that  the  view  then  taken  of  the  case  was  cor- 
rect.    The  rights  of  the  parties  depend  upon  that  single  question. 

The  execution  issued  on  the  7th  of  March,  1840.  The  plaintiff 
alleges  that  the  deed  took  effect  on  the  2d  of  March,  1840.  The 
facts  are,  that  on  the  2d  of  March  the  plaintiff  and  the  defendant, 
Morgan,  made  an  agreement,  by  which  the  plaintiff  was  to  give 
Morgan  $725  for  the  land,  to  be  paid,  a  part  in  cash,  and  the  bal- 
ance in  notes  and  specific  articles,  as  soon  as  the  plaintiff  was  able, 
which  he  expected  would  be  in  a  few  days,  and  Morgan  was  to 
make  a  deed  to  the  plaintiff,  and  hand  it  to  Col.  Hardy  Morgan,  to 
be  by  him  handed  to  the  plaintiff,  when  he  paid  the  price.  Accord- 
ingly on  that  day  the  plaintiff  paid  to  Morgan  a  wagon  and  some 
leather,  which  was  taken  at  the  price  of  $57.50,  and  Morgan  signed 
and  sealed  the  deed  and  handed  it  to  Colonel  Morgan  to  be  handed 
to  the  plaintiff,  when  he  paid  the  balance  of  the  price.  The  deed 
was  witnessed  by  Colonel  Morgan  and  one  Sanders,  and  is  dated 
on  the  2d  of  March.  Afterwards,  on  the  10th  of  March,  the 
plaintiff  paid  to  Morgan  the  balance  of  the  $725,  with  the  excep- 
tion of  $152.  for  which  Morgan  accepted  his  note,  and  the  deed 
was  then  handed  to  the  plaintiff  by  Colonel  Morgan. 

The  question  upon  these  facts  is,  whether  the  deed  takes  effect 
from  the  2d  or  from  the  10th  of  March?  We  are  of  the  opinion 
that  it  takes  effect  from  the  2d,  at  which  time,  according  to  the 
agreement,  it  was  signed,  sealed  and  delivered  to  Colonel  Morgan, 
to  be  delivered  to  the  plaintiff,  when  he  should  pay  the  price.  The 
effect  of  the  agreement  was  to  give  the  plaintiff  the  equitable  es- 
tate in  the  land,  and  to  give  Morgan  a  right  to  the  price.  The  pur- 
pose  for  which  the  deed  was  delivered  to  a  third  person,  instead 
of   being  delivered   directly   to  the  plaintiff,   was   merely  to   secure 


CONTRACTS    UNDER    SEAL.  105 

the  payment  of  the  price.  When  that  was  paid  the  plaintiff  had 
a  right  to  the  deed.  The  purpose  for  which  it  was  put  into  the 
hands  of  a  third  person,  being  accomplished,  the  plaintiff  then  held 
it  in  the  same  manner,  as  he  would  have  held  it  if  it  had  been  de- 
livered to  him  in  the  first  instance.  This  was  the  intention,  and  we 
can  see  no  good  reason  why  the  parties  should  not  be  allowed  to 
effect  their  end  in  this  way. 

It  is  true,  the  plaintiff  was  not  absolutely  bound  to  pay  the  bal- 
ance of  the  price.  Perhaps  he  had  it  in  his  power  to  avail  himself 
of  the  statute  of  frauds,  and  it  would  seem  from  the  testimony, 
that,  at  one  time,  he  contemplated  doing  so,  on  account  of  some 
doubt  as  to  the  title ;  but  lie  complied  with  the  condition  and  paid 
the  price.  His  rights  can  not  be  affected  by  the  fact,  that  he 
might  have  avoided  it.  If  the  vendor  had  died  after  the  deliverv 
to  the  third  person  and  before  the  payment,  the  vendee  upon  mak- 
ing the  payment,  would  have  been  entitled  to  the  deed  ;  and  it  must 
have  taken  effect  from  the  first  delivery;  otherwise  it  could  not 
take  effect  at  all.  The  intention  was  that  it  should  be  the  deed  of 
the  vendor  from  the  time  it  was  delivered  to  the  third  person, 
provided  the  condition  was  complied  with.  If  this  intention  is 
bona  fide  and  not  a  contrivance  to  interfere  with  the  rights  of 
creditors,  of  which  there  is  no  allegation  in  this  case,  it  must  be 
allowed  to  take  effect. 

A  distinction  is  taken  in  the  old  books,  between  a  case,  when  a 
paper,  being  signed  and  sealed,  is  handed  to  a  third  person,  with 
these  words :  "take  this  paper  and  hand  it  to  A.  B.  as  my  deed, 
upon  condition,"  etc.,  and  a  case  where  these  words  are  used,  take 
"this  deed  and  hand  it  to  A.  B.  upon  condition,"  etc.  In  the  latter 
case  it  takes  effect  presently ;  while  in  the  former  it  is  held,  in 
most  cases,  not  to  take  effect  until  the  second  deliverv.  Touch- 
stone, 58,  59. 

The  distinction,  upon  which  this  "diversity"  is  made,  would  seem 
too  nice  for  practical  purposes,  to  be  a  mere  play  upon  words. 
The  intention  of  the  parties,  whether  one  set  of  words  be  used  or 
the  other,  is  to  make  it  a  deed  presently,  but  to  lodge  it  in  the 
hand  of  a  third  person,  as  the  security  for  the  performance  of 
some  act.  If  it  was  not  to  be  a  deed  presently,  provided  the  con- 
dition be  afterwards  performed,  the  maker  would  hold  it  himself, 
and  the  agency  of  the  third  person  would  be  useless.  Indeed,  the 
idea  that  the  third  person  is  a  mere  agent  to  deliver  the  paper  as 
a  deed,  if  particular  words  be  used,  "escrow"  for  instance,  even  by 
the  old  cases,  has  many  exceptions,  and  the  deed  is  allowed,  in 
such  cases,  to  take  effect.  As  if  the  maker  dies,  as  in  the  case 
above  put;  or  becomes  non  compos  mentis;  or,  being  a  feme  sole. 
marries;  or  if  the  vendor  should  create  any   encumbrance,   as  by 


106  FORMATION    OF    CONTRACT. 

making  a  lease ;  in  all  such  cases,  when  the  paper  was  handed  to 
the  third  person  to  he  delivered  as  a  deed  upon  condition,  etc.,  it 
is  allowed  to  take  effect  from  the  first  delivery,  in  order  to  effect- 
uate the  intention  of  the  parties.  In  other  words,  when  it  can 
make  no  difference,  the  deed  takes  effect  from  the  second  delivery, 
but  if  it  does  make  a  difference,  then  the  deed  takes  effect  from 
the  first  delivery.  This  entirely  yields  the  question.  The  last  ex- 
ception cited  above,  as  to  the  relation  of  the  deed,  in  cases  of 
"escrow"  to  avoid  a  lease,  takes  in  the  case  under  consideration ; 
for  it  is  the  same,  whether  the  encumbrance,  to  be  avoided,  pro- 
ceeds from  the  act  of  the  party,  or  from  the  effect  of  an  execu- 
tion, as  the  object  is  to  make  the  deed  effectual  and  to  carry  out 
the  intention.     State  v.  Pool,  27  N.  C,  105. 

But,  in  truth,  the  distinction  can  not  be  acted  upon — it  is  merely 
verbal,  and  whether  one  set  of  words  would  be  used,  or  the  other, 
would  be  the  result  of  mere  accident.  The  law  does  not  depend 
upon  the  accidental  use  of  mere  words  "trusted  to  the  slippery 
memory  of  witnesses."  It  depends  upon  the  act,  that  a  paper, 
signed  and  sealed,  is  put  out  of  the  possession  of  the  maker.  It 
must  be  confessed  (and  with  reverence  I  say  it),  that  many  of  the 
dicta  to  be  found  in  the  old  books,  in  reference  to  deeds,  are  too 
"subtle  and  cunning"  for  practical  use,  and  have  either  been  passed 
over  in  silence,  or  wholly  explained  away. 

We  are  satisfied  from  principle  and  from  a  consideration  of  the 
authorities,  that  when  a  paper  is  signed  and  sealed  and  handed  to 
a  third  person  to  be  handed  to  another  upon  condition,  which  is 
afterwards  complied  with,  the  paper  becomes  a  deed  by  the  act  of 
parting  with  the  possession,  and  takes  effect  presently,  without 
reference  to  the  precise  words  used,  unless  it  clearly  appears  to 
be  the  intention  that  it  should  not  then  become  a  deed,  and  this 
intention  would  be  defeated  by  treating  it  as  a  deed  from  that 
time,  as,  if,  no  fraud  being  suggested,  the  paper  is  handed  to  the 
third  person,  before  the  parties  have  concluded  the  bargain,  and 
fixed  upon  the  terms  ;  which  can  not  well  be  supposed  ever  to  be 
the  case,  for,  in  ordinary  transactions,  the  preparation  of  deeds  of 
conveyance,  which  is  attended  with  trouble  and  expense,  usually 
comes  after  the  agreement  to  sell. 

There  must  be  a  decree  for  the  plaintiff,  with  costs  against  the 
defendant,  Harris. 

A  paper  was  given  to  the  principal  to  be  executed  as  a  bond  by 
himself  and  sureties,  and  it  is  next  found  in  the  hands  of  the  obligee, 
signed  and  sealed  by  the  parties;  the  sureties  contend  that  it  was  an 
escrow  and  rely  upon  the  fact  that  the  name  of  one  of  the  sureties 
appears  in  the  body  of  the  bond,  and  that  he  was  to  sign  it  and  did  not 
do  so;  the  bond  was  valid  because  it  could  not  be  delivered  to  the  obligee 
as  an  escrow,  though  it  might  have  been  so  given  to  the  principal. 
Blume    v.    Bowman,    24 — 338.      When    the    surety    signs    under   an    agree- 


CONTRACTS    UNDER    SEAL.  107 

merit  with  the  principal  that  the  bond  is  not  to  be  binding  nor  delivered 
to  the  obligee  until  another  signs  it,  the  bond  is  valid,  if  the  other  per- 
son did  not  sign  it  and  the  principal  delivered  it  to  the  obligee  without 
notice  of  this  condition.  Gwyn  v.  Patterson,  72 — 189;  otherwise,  if  the 
obligee  knows  of  such  condition.  Whitsell  v.  Mebane,  64 — 345;  Pratt 
v.   Chaffin,   136—350. 

An  instrument  signed,  sealed  and  delivered  by  the  grantor  to  the 
grantee  is  a  deed  and  not  an  escrow,  although  they  place  it  with  a  third 
person  for  safe-keeping  until  they  both  should  call  for  it.  Gibson  v. 
Partee,  19—530;  Tolar  v.  Tolar,  16 — 460.  Where  the  grantor  parts  with 
p.  deed  to  anyone,  there  is  a  presumption  that  it  was  delivered  as  a 
deed  and  not  as  an  escrow.  Tate  v.  Tate,  21 — 22;  State  v.  Pool,  27 — 
105.  But  where  the  grantor  gave  the  deed  to  the  subscribing  witness 
to  be  delivered  to  the  grantee  after  the  grantor's  death,  but  also  said, 
"if  ever  she  wanted  it,  she  would  call  for  it,"  this  was  not  sufficient  de- 
livery to  constitute  an  escrow.     Roe  v.  Lovick,  43 — 88. 

In  escrow  the  delivery  is  effective  when  the  grantor  relinquishes  pos- 
session of  the  deed,  and  it  passes  title  to  the  grantee  when  the  con- 
dition is  performed;  it  may  relate  back  to  the  time  of  the  original 
execution,  if  necessary  to  protect  the  rights  of  the  parties.  Craddock 
v.  Barnes,  142 — 89;  Mordecai's  Law  Lectures,  842;  Wellborn  v.  Weaver, 
17  Ga.,  267.  63  A.  D.,  235;  Wipfler  v.  Wipfler,  15  Mich.,  18,  116  N.  W., 
544,  16  L.  R.  A.  (N.  S.),  941;  Fortune  v.  Hunt,  149—358;  Binford  v. 
Steele.  161 — 660.  If  a  deed  is  delivered  in  escrow  and  is  wrongfully 
gotten  by  the  grantee,  it  is  invalid.  Bd.  of  Ed.  v.  Development  Co.,  159 — 
162;  whether  an  innocent  purchaser  from  such  grantee  would  get  a 
good  title,  qucre.  Hubbard  v.  Greely,  84  Me.,  340,  24  Atl.,  799,  17  L. 
R.  A..  511:  Guthrie  v.  Field,  85  Kan.,  62.  116  Pac,  217,  37  L.  R.  A. 
(N.  S.),  330.  For  effect  of  escrow  generally,  see,  May  v.  Emerson, 
52  Ore.,  262,  16  Ann.  Cas.,  1132;  Riggs  v.  Trees,  120  Tnd.,  402,  22  N.  E., 
254,  5  L.  R.  A.,  696;  Darling  v.  Butler,  45  Fed.,  332,  10  L.  R.  A..  469; 
Pomeroy  v.  Tns.  Co.,  86  Kan..  214,  38  L.  R.  A.  (N.  S.),  142;  16  Cyc,  561. 

9.    Registration. 

Conveyances  of  land  and  certain  other  contracts  are  required  to  be 
registered  in  order  to  be  valid  against  the  claims  of  creditors  or  pur- 
chasers for  value.  Revisal,  sees.  979,  980,  981.  So  with  mortgages  and 
deeds  of  trust.  Revisal,  sec.  982;  conditional  sales,  sec.  983;  marriage 
settlements,  sec.  985;  deeds  of  gift,  sec.  986;  powers  of  attorney,  sec. 
987:  chattel  mortgages,  sec.  1039;  mortgages  of  household  and  kitchen 
furniture,  sec.  1041.  Certified  copy  of  registered  instrument  is  suffi- 
cient evidence,  sec.  988.     Manner  of  probate,  sees.  989-1030. 

Failure  to  register  a  deed  in  time  postpones  the  older  deed  to  the 
claims  of  creditors  and  purchasers,  but  as  against  volunteers  or  donees 
the  older  deed,  though  unregistered,  will  as  a  rule  prevail.  Tyner  v. 
Barnes,  142 — 110.  A  deed  admitted  to  probate  and  ordered  to  be  regis- 
tered, may  be  registered  at  any  time,  and  the  certificates  of  probate  and 
registration  are  sufficient  evidence  of  execution  and  probate.  Sellers  v. 
Sellers.  98 — 13:  but  they  are  not  conclusive  evidence.  Love  v.  Harbin, 
87 — 24°;  McKinnon  v.  McLean,  19 — p.  85.  Registration  upon  an  un- 
authorized probate  is  invalid.  Lance  v.  Tainter,  137 — 249;  Williams  v. 
Griffin,  49—31;  Allen  v.  Burch,  142—524. 

Tn  the  absence  of  fraud,  no  notice  however  clear  and  direct  will 
take  the  place  of  registration.  Quinnerly  v.  Quinnerly,  114 — 145;  Tre- 
maine  v.  Williams,  144 — 114;  Burwell  v.  Chapman,  159 — 209;  Colonial 
Trust   Co.  v.   Sterchie    (N.   C),  85  S.   E.,  40. 

An  unregistered  deed  may  be  introduced  to  show  color  of  title. 
Allen  v.  Burch.  142—524:  Ray  v.  Wilcoxon,  107—514;  Walker  v.  Col- 
traine,  41 — 79;  Prince  v.  Sykes.  8 — 87;  but  see  Janney  v.  Robbins,  141 — 
400;  Austin  v.  Staton.  126—783;  Collins  v.  Davis,  132—106;  Lindsay  v. 
Beaman,   128 — 189.     This  has  been  explained  to  apply  where  the  parties 


108  FORMATION    OF    CONTRACT. 

do   not   claim   from   a   common   grantor.      Gore   v.    McPherson.    161 — 638; 
Moore  v.  Johnson,   162—266;  84  S.   E..   1027,   168—621. 

The  certificate  of  the  clerk  is  not  necessary  to  the  registration  of  a 
State  grant,  the  Great  Seal  of  the  State  being  sufficient.  Ray  v.  Stewart, 
105 — 472;  Etheridge  v.  Ferrebee,  31 — 312.  It  was  not  required  to  put 
on  record  the  certificates  of  probate  of  a  deed  in  recording  it,  though 
it  was  better  to  do  so.  Love  v.  Harbin,  87 — 249;  but  the  certificate  of 
the  clerk  includes  an  order  to  record  the  certificates.  Revisal,  sec.  999. 
For  sufficiency  of  certificate  of  probate,  see,  Cozad  v.  McAden,  150 — 206; 
Kleybolte  v.  Timber  Co.,  151—635;  Lumber  Co.  v.  Branch,  158—251; 
Moore   v.    Quickie,    159—129. 

10.    Bond   as  a   negotiable   instrument. 

PARKER  v.  LATHAM, 
Ante    (45). 

A  sealed  note  payable  to  A.  B.  or  bearer  can  pass  only  by  a  delivery 
to  the  obligee  and  an  endorsement  by  him.  Marsh  v.  Brooks,  33 — ■ 
409;  Gregory  v.  Dozier,  51 — 4;  Bryan  v.  Enterprise.  53 — 260;  Bland  v. 
O'Hagan,  64 — 471;  Parker  v.  Carson,  64 — 563;  Spence  v.  Tapscot,  93 — 
246;  but  in  Weith  v.  Wilmington,  68 — 24,  it  was  held  that  this  did  not 
apply   to   corporation   bonds  payable   to   bearer. 

Under  the  statute  (The  Code,  sec.  41),  a  note  under  seal  has  all 
the  qualities  of  a  negotiable  instrument,  and  the  production  of  such 
paper  with  proof  of  the  obligor's  handwriting  is  sufficient  evidence  of 
delivery  and  ownership.  Pate  v.  Brown,  85 — 166.  It  would  still  require 
endorsement  to  make  it  negotiable,  and  if  assigned  without  endorsement, 
the  holder  would  take  it  subject  to  all  equities.  Spence  v.  Tapscot, 
93 — 246;  Loan  Association  v.  Merritt,  112 — 243;  but  when  endorsed,  it  is 
like  a  note  not  under  seal  as  to  negotiability.  Miller  v.  Tharell,  75 — 148; 
Lewis  v.  Long,  102—106;  Christian  v.  Parrott.  114—215. 

But  under  the  Negotiable  Instrument  Law  (Revisal,  sec.  2155),  the 
validity  and  negotiable  character  of  an  instrument  are  not  affected  by 
the  fact  that  it  is  under  seal. 

11.  Effect  of  a  deed. 

1.   AS   AN    ESTOPPEL. 

"A  deed  ...  is  the  most  solemn  and  authentic  act  that  a 
man  can  possibly  perform,  with  relation  to  the  disposal  of  his 
property ;  and  therefore  a  man  shall  always  be  estopped  by  his 
own  deed,  or  not  permitted  to  aver  or  prove  anything  in  contradic- 
tion to  what  he  has  once  so  solemnly  and  deliberately  avowed." 
2  Rlk.,  295. 

An  estoppel  operates  entirely  as  to  facts;  its  effect  is  to  conclude  the 
parties  from  making,  and  of  course  from  proving,  the  facts  to  be  dif- 
ferent from  what  they  are  stated  or  acknowledged  to  be  in  the  deed. 
Taylor  v.  Shuford,  11 — 116.  The  grantee  is  necessarily  influenced  in 
making  the  purchase  by  the  quality  and  extent  of  the  estate  conveyed, 
and  the  grantor  in  good  faith  should  be  precluded  from  gainsaying  it. 
Weeks  v.  Wilkie,   139—215. 

Recitals  in  a  deed  are  estoppels  when  they  are  of  the  essence  of  the 
contract,  where  unless  the  facts  recited  existed,  the  contract,  it  is  pre- 
sumed, would  not  have  been  made.  Brinegar  v.  Chaffin.  14 — 108:  Fort 
v.    Allen.    110 — 183.      Since   the   consideration    is   not   a   necessary   part   of 


CONTRACTS    UNDER    SEAL.  109 

the  deed,  the  recital  of  payment  in  the  deed  can  be  contradicted. 
Barbee  v.  Barbee,  108—582;  Smith  v.  Arthur,  110—400;  Deaver  v.  Deaver. 
137_240;  Faust  v.  Faust,  144 — 383.  But  in  a  policy  of  insurance  the 
acknowledgment  of  the  receipt  of  the  premium  estops  the  company 
from  denying  the  validity  of  the  policy  for  nonpayment;  and  the  de- 
livery of  the  policy,  in  the  absence  of  fraud,  is  conclusive  that  the  con- 
tract is  complete.  Grier  v.  Life  Ins.  Co.,  132—542;  Kendrick  v.  Life 
Ins.   Co..  124—315. 

A  deed  estops  all  persons  claiming  from  or  under  the  grantor, 
whether  by  deed  or  otherwise  (parties  and  privies).  Murphy  v.  Barnett, 
6—351;  Gilliam  v.  Bird,  30—280.  A  chattel  mortgage  registered  proves 
itself,  and  estops  the  mortgagor  to  deny  that  he  is  responsible  for  the 
property.  State  v.  Griffith,  126—377.  A  subsequent  grantee  is  estopped 
to  claim  as  against  a  prior  deed  from  the  same  grantor.  Sinclair  v. 
Huntly.  131—243.  A  grantee  who  accepts  a  deed  poll  containing  cove- 
nants or  conditions  to  be  performed  by  him  as  the  consideration,  is 
bound  by  these  although  he  does  not  sign  the  deed.  Maynard  v.  Moore, 
76—158;  Long  v.  Swindell,  77—176;  Fort  v.  Allen,  110—183;  Chord  v. 
Warren,  122—75.  The  State  is  not  bound'  by  an  estoppel  nor  is  the 
grantee  from  the  State  estopped  to  deny  what  the  State  might  assert. 
Taylor  v.  Shuford,  11—116;  Candler  v.  Lunsford,  20—542.  A  person 
executing  a  deed  in  violation  of  a  restraining  order  is  estopped  to  deny 
its  validity  for  that  cause.  Wilson  v.  Land  Co.,  77 — 445.  But  a  void 
deed  is   not   an   estoppel.      Miller   v.    Bumgardner,    109 — 412. 

For  estoppel  by  deed  in  general,  see  12  Am.  &  Eng.  Encyc.,  392  et  scq. 

2.    AS   A    MERGER. 
See  this  subject  under  Discharge  of  Contract,  post. 

On  the  subject  of  deeds  in  general,  see  Mordecai's  Law  Lectures,  ch. 
24;   19  Am.  &  Eng.  Encyc,   107  et  seq.;   Costner  v.   Fisher,   104 — 392. 


110  FORMATION    OP    CONTRACT. 


CHAPTER  IV. 
Simple  Contracts.     Statute  of  Frauds. 

"All  contracts  are,  by  the  laws  of  England,  distinguished  into 
agreements  by  specialty  and  agreements  by  parol ;  nor  is  there  any 
such  third  class  as  some  of  the  counsel  have  endeavored  to  main- 
tain, as  contracts  in  writing.  If  they  be  merely  written  and  not 
specialties,  they  are  parol,  and  a  consideration  must  be  proved." 
Rami  v.  Hughes,  7  T.  R.,  350,  6  E.  R.  C,  1. 

"By  the  common  law  of  England  there  were  but  few  contracts 
necessary  to  be  made  in  writing.  Property  lying  in  grant,  as  rights 
and  future  interests,  and  that  sort  of  real  property,  to  which  the 
term  incorporeal  hereditament  applies,  must  have  been  authenti- 
cated by  deed.  So  the  law  remained  until  the  stat.,  32  H.  VIII, 
which,  permitting  a  partial  disposition  of  land  by  will,  required 
the  will  to  be  in  writing ;  but  estates  in  land  might  still  be  con- 
veyed by  a  symbolical  delivery  in  presence  of  the  neighbors,  with- 
out any  written  instrument ;  though  it  was  thought  prudent  to  add 
security  to  the  transaction  by  the  charter  of  feoffment.  The  stat- 
ute of  29  Car.  II,  commonly  called  the  Statute  of  Frauds,  has  made 
writing  and  signing  essential  in  a  great  variety  of  cases  wherein 
they  were  not  so  before,  and  has  certainly  increased  the  necessity 
of  caution  in  the  English  courts,  with  respect  to  the  admission  of 
verbal  testimony,  to  add  to  or  alter  written  instruments,  in  cases 
coming  within  the  provisions  of  that  statute.  That  law  being  pos- 
terior to  the  charter  under  which  this  state  was  settled,  has  never 
had  operation  here ;  so  that  the  common  law  remained  unaltered 
until  the  year  1715,  when  a  partial  enactment  was  made  of  the 
provisions  of  the  English  statute."  Smith  v.  Williams,  5  N.  C, 
426.     But  see  Odom  v.  Clark,  146,  p.  550. 

The  English  Statute  of  Frauds,  29  Chas.  II  (1677),  contained 
several  sections,  those  particularly  affecting  contracts  being  sec.  4 
and  sec.   17. 

Sec.  4.  No  action  shall  be  brought  whereby  to  charge  any  ex- 
ecutor or  administrator  upon  any  special  promise  to  answer  dam- 
ages out  of  his  own  estate ;  2.  Or  whereby  to  charge  the  defendant 
upon  any  special  promise  to  answer  for  the  debt,  default,  or  mis- 
carriage of  another  person  ;  3.  Or  to  charge  any  person  upon  any 
agreement  made  upon  consideration  of  marriage;  4.  Or  upon  any 
contract  or  sale  of  lands,  tenements,  or  hereditaments,  or  any  in- 
terest in  or  concerning  them  ;  5.  Or  upon  any  agreement  that  is  not 


STATUTE     OF     FRAUDS.  Ill 

to  be  performed  within  the  space  of  one  year  from  the  making 
thereof ;  unless  the  agreement  upon  which  such  action  shall  be 
brought,  or  some  memorandum  or  note  thereof,  shall  be  in  writing, 
and  signed  by  the  party  to  be  charged  therewith,  or  some  other 
person  thereunto  by  him  lawfully  authorized. 

Sec.  17.  No  contract  for  the  sale  of  any  goods,  wares,  or  mer- 
chandise for  the  price  of  £10  sterling,  or  upwards,  shall  be  al- 
lowed to  be  good,  except  the  buyer  shall  accept  part  of  the  goods 
so  sold,  and  actually  receive  the  same,  or  give  something  in  earnest 
to  bind  the  bargain,  or  in  part  payment,  or  that  some  note  or 
memorandum  in  writing  of  the  said  bargain  be  made  and  signed 
by  the  parties  to  be  charged  by  such  contract,  or  their  agents 
thereunto  lawfully  authorized. 

Sec.  1.     Special  promise  of  an  executor  or  administrator  to 
answer  damages  out  of  his  own  estate. 

(48)   SMITHWICK  v.  SHEPHERD, 
49  N.   C,   196—1856. 

This  was  an  action  of  assumpsit.  The  plaintiff  had  an  account 
against  the  defendant's  intestate  for  board  for  himself  and  work- 
men ;  in  a  conversation  between  the  plaintiff,  the  defendant  and 
a  third  person  in  regard  to  decedent's  estate,  the  plaintiff  produced 
his  account ;  the  third  person  said  that  defendant  was  the  adminis- 
trator and  the  man  to  pay  it ;  defendant  replied  that  he  would  see 
it  paid,  or  it  should  be  paid,  and  afterwards  did  pay  $30  on  it. 
This  action  was  brought  against  the  defendant  individually  to  re- 
cover the  balance. 

The  plaintiff  insisted,  1.  That  the  promise  of  the  defendant  was 
substituted  for  the  original  debt ;  2.  That  the  defendant's  having 
property  applicable  to  the  debt,  and  having  promised  to  pay,  or 
see  it  paid,  was  an  assumpsit  which  discharged  the  original  debtor, 
and  on  which  plaintiff  might  rely  ;  this,  with  the  application  of  a 
credit  thereto,  was  a  consideration  to  support  the  promise. 

A  verdict  was  rendered  for  the  plaintiff,  subject  to  the  opinion 
of  the  court  as  to  whether  the  action  could  be  sustained.  The 
court,  being  of  opinion  with  the  defendant,  ordered  a  nonsuit,  and 
plaintiff  appealed. 

Battle,  J.  The  declaration  made  by  the  defendant,  that  he 
would  see  the  debt  of  his  intestate  paid,  or  that  it  should  be  paid, 
was,  if  a  promise  to  pay  at  all,  a  special  promise  within  the  statute 
of  frauds.  Revised  Stat.,  ch.  50,  sec.  10  (Rev.  Code,  ch.  50,  sec. 
15).  It  was  a  promise  either  "to  answer  the  debt  of  another  per- 
son," or  by  an  administrator,  "to  answer  damages  out  of  his  own 


112  FORMATION    OF    CONTRACT. 

estate,"  and,  therefore,  no  action  could  be  brought  upon  it;  be- 
cause it  was  not  in  writing  and  signed  as  the  statute  requires. 

If  the  propositions  contended  for  by  the  plaintiff  were  sustain- 
able in  this  case,  they  would  defeat  the  effect  of  the  statute  in 
every  case,  by  making  the  promise  operate  as  a  substitute  of  itself, 
for  the  original  debt.  Such  a  doctrine  can  not,  for  a  moment,  be 
upheld. 

The  judgment  of  nonsuit  was  right,  and  must  be  affirmed. 

(49;  J.  C.  McLEAN,  Admr.,  v.  A.  A.  McLEAN  and  others, 

88  N.   C,  394—1883. 

This  was  a  civil  action  upon  an  administration  bond,  brought 
by  the  plaintiff  as  administrator  d.  b.  n.  of  D.  H.  McLean,  against 
the  defendant,  as  administrator  of  G.  W.  McLean,  and  the  sure- 
ties upon  his  bond.  The  breach  of  the  bond,  assigned  as  a  cause 
of  action,  is  the  nonpayment  of  a  judgment  obtained  in  the  Su- 
perior Court  at  Fall  Term,  1875,  against  the  defendant,  which  is 
as  follows : 

"It  appearing  by  the  complaint  of  the  plaintiff  that  the  defend- 
ant is  justly  due  and  indebted  to  the  plaintiff  in  the  sum  of  $455.- 
61,  and  defendant  having  failed  to  answer,  it  is  considered  and 
adjudged  by  the  court  that  the  plaintiff  do  recover  of  the  defend- 
ant, administrator  of  G.  W.  McLean,  the  sum  of  $455.61,"  with 
interest  and  costs. 

It  was  admitted  by  the  plaintiff  that  this  judgment  was  founded 
upon  a  note  under  seal,  given  by  the  defendant,  A.  A.  McLean, 
to  the  plaintiff,  in  consideration  of  an  open  account  due  by  the 
defendant's  intestate  to  the  plaintiff's  intestate. 

The  court  gave  judgment  in  favor  of  the  plaintiff  and  the  de- 
fendants appealed. 

Ashe,  J.  The  plaintiff  insisted  the  judgment  was  de  bonis  tcsta- 
toris,  and  the  defendants  contend  it  was  de  bonis  propriis,  and 
this  is  the  only  question  presented  for  determination. 

We  are  not  furnished  with  a  copy  of  the  note  sued  on,  but  we 
infer  from  the  pleadings  and  admissions  that  it  was  a  bond  signed 
by  the  defendant,  A.   A.   McLean,  as  administrator. 

As  a  general  proposition  of  law,  an  administrator  can  not  make 
any  contract  to  bind  the  estate  of  his  intestate.  If  he  gives  his 
promissory  note  to  pay  a  debt  due  by  his  intestate,  it  will  be  binding 
on  him  individually  or  not  at  all.  If  the  note  is  founded  upon 
sufficient  consideration,  as  of  assets  applicable  to  the  debt,  or  for- 
bearance, he  will  be  individually  liable;  but  if  there  is  no  consid- 
eration, it  will  be  nudum  pactum.  At  the  common  law  he  was 
liable  individually  upon  his  verbal  promise  to  pay,  if  there  was  a 


STATUTE    OF     FRAUDS. 


113 


sufficient  consideration  for  the  promise;  and  although  the  promise 
be  in  writing,  it  will  be  of  no  more  effect  since  the  statute  of  29 
Charles  II,  than  before,  unless  it  be  by  deed,  or  there  be  a  good 
consideration  for  it.     Williams  on  Executors,   1610. 

It  is  well  settled  by  the  almost  unvarying  current  of  authorities, 
that  the  promissory  note  of  an  administrator  or  executor,  founded 
upon  the  consideration  of  forbearance  or  the  possession  of  assets, 
will  be  binding  upon  him  in  his  individual  capacity,  although  he 
should  sign  the  note  "as  administrator  or  executor."  Williams, 
supra;  Parsons  on . Contracts,  128;  Woods  v.  Ridley,  27  Miss.; 
Sims  v.  Stilwell,  3  How.  (Miss.),  176;  McGrath  v.  Bevers,  19 
S.  C,  328;  Sleighter  v.  Harrington,  2  Mur.,  332;  Hall  v.  Craige, 
65  N.  C,  51 ;  Kerchner  v.  McRae,  80  N.  C,  219. 

If  the  promissory  note  of  an  administrator,  with  a  sufficient  con- 
sideration to  support  it,  will  be  binding  upon  him  individually,  a 
fortiori  will  his  bond  have  that  effect. 

There  is  a  marked  distinction  between  a  bond  and  a  promissory 
note  in  reference  to  the  liability  of  an  administrator  or  executor. 
In  the  case  of  a  promissory  note,  given  for  value  received,  it  bears 
only  prima  facie  evidence  of  consideration,  and  it  is  open  to  the 
defendant  to  go  into  the  question  of  consideration  and  show,  for 
instance,  that  he  had  no  assets,  at  the  time  of  making  the  note, 
applicable  to  the  debt  of  the  estate  for  which  the  note  was  given, 
or  that  there  was  in  fact  no  consideration  for  the  promise  ex- 
pressed therein.  But  a  bond  is  a  deed,  signed,  sealed  and  delivered. 
It  is  the  act  and  deed  of  the  party  signing  it,  and  it  imports  a 
valid  consideration.  It  is  against  all  principle  to  suppose  that  an 
administrator  or  executor  could  give  such  an  instrument  as  would 
be  binding  upon  the  estate  of  his  intestate  or  testator.  Of  course, 
then,  where  the  engagement  of  the  representative  to  pay  a  debt  of 
a  decedent  is  by  bond,  it  is  a  compliance  with  the  statute,  but  con- 
cludes the  defendant  from  showing  that  there  was  no  consideration. 

Mr.  Williams,  in  the  passage  above  cited,  recognizes  the  distinc- 
tion. He  says,  though  the  promise  be  in  writing,  it  is  of  no  more 
effect  since  the  statute  than  before,  unless  it  be  by  deed,  or  there 
be  a  good  consideration.  Again,  on  page  1018,  note  1,  of  his 
work,  we  find  it  laid  down,  that  "a  note  given  by  an  executor  by 
way  of  submission  to  arbitration  is  not  binding,  unless  there  were 
assets  in  his  hands.  When  the  submission  is  made  by  bond,  the 
executor  is  liable,  not  only  because  a  seal  imports  a  consideration 
(for  a  promissory  note  imports  a  consideration),  but  also  because, 
when  a  person  has  executed  an  instrument  under  seal,  he  shall  not 
be  permitted  to  disprove  the  consideration.  Both  the  bond  and  the 
note  import  assets,  and  of  course  a  sufficient  consideration :  the 
consideration  of  the  bond  can  not  be  explained  ;  that  of  the  note 


114  FORMATION    OF    CONTRACT. 

may,  as  between  the  original  parties  and  all  parties  having  notice 
of  the  consideration."  See  the  numerous  cases  there  cited  in 
support  of  these  propositions. 

In  Davis  v.  Mead,  2  Ky.,  which  was  an  action  upon  a  bond  given 
by  the  defendants  as  executors,  the  court  says:  "The  plea  of  plene 
administravit  can  not  avail  them ;  the  naming  them  executors  was 
but  descriptive  of  the  persons,  and  the  judgment  was  de  bonis 
propriis."  It  is  true  that  in  that  case  some  stress  is  laid  upon 
the  fact  that  the  declaration  was  in  the  "debet  and  detinet,"  but 
it  could  not  have  been  otherwise  in  an  action  upon  such  an  in- 
strument. 

In  Hall  v.  Craige,  supra,  which  was  an  action  upon  a  judgment 
confessed  by  the  defendant  and  others,  the  court  held  that  the 
judgment  bound  them  in  their  individual  capacity,  though  they 
styled  themselves  executors  in  making  the  confession. 

In  Kerchner  v.  McRae,  supra,  where  the  action  was  brought  on 
a  note  under  seal,  executed  by  the  defendants,  as  executors,  to 
secure  the  amount  of  an  account  due  and  owing  by  their  testator 
at  the  time  of  his  death,  it  was  held  that  the  defendant  was 
liable  individually  upon  the  bond,  and  the  judgment  was  rendered 
against  him  in  that  capacity. 

From  these  authorities  our  conclusion  is,  that  the  judgment  in 
question  was  a  judgment  against  A.  A.  McLean  in  his  individual 
capacity,  and  the  naming  him  "administrator"  therein  was  mere 
surplusage ;  and  consequently  the  defendants,  W.  A.  Sellars  and 
McKoy  Sellars,  are  not  liable  as  sureties  on  the  administration 
bond  of  A.  A.  McLean,  for  the  breach  alleged  in  the  complaint. 

There  is  error.  The  judgment  of  the  Superior  Court  is  re- 
versed, and  the  judgment  of  this  court  is  that  the  said  defendants 
go  without  day,  and  recover  their  costs. 

Error.  Reversed. 

Revisal,  sec.  974.  No  action  shall  be  brought  whereby  to  charge  an 
executor,  administrator  or  collector  upon  a  special  promise  to  answer 
damages  out  of  his  own  estate,  or  to  charge  any  defendant  upon  a 
special  promise  to  answer  for  the  debt,  default  or  miscarriage  of  another 
person,  unless  the  agreement  upon  which  such  action  shall  be  brought. 
or  some  memorandum  or  note  thereof  shall  be  in  writing,  and  signed 
by  the  party  charged  therewith  or  some  other  person  thereunto  by 
him    lawfully   authorized. 

Other  cases  in  addition  to  those  cited  above,  in  which  the  liability  is 
discussed,  are  Williams  v.  Chaffin,  13—333;  Tyson  v.  Walston,  83—90; 
Hailey  v.  Wheeler,  49—159;  Beatty  v.  Gingles.  53—302;  Kessler  v.  Hall, 
64—60;  Devane  v.  Royal.  52—426;  Brandon  v.  'Allison,  66—532;  Norton 
v.  Edwards,  66 — 367;  Edwards  v.  Love.  04 — 365;  Bellows  v.  Sowles,  57 
Vt..  164,  52  A.  R.,  118;  Dillaby  v.  Wilcox,  60  Conn.,  71.  25  A.  S.  R., 
299,  13  L.  R.  A.,  64;  Brown  v.  Quinton.  86  Kan..  658.  122  Pac.  116;  Ann. 
Cas.,  1913  C,  396;  20  Cyc,  158;  Statute  of  Erauds,  Cent.  Dig.,  sees. 
7-12;  Dec.  Dig.,  ss.  7-12;   Pollock   Cont.,  169. 

In  Banking  Co.  v.  Morehead.  116 — 419,  which  was  heard  on  demurrer, 
it  was  held   that   the   executrix  was  personally  liable  and  the   estate  was 


STATUTE    OF    FRAUDS.  115 

not  liable  on  a  note  given  by  tbe  executrix  in  satisfaction  of  a  debt  of 
her  testator.  The  case  came  up  again  in  122 — 318,  when  judgment  had 
been  rendered  below  against  the  defendant  as  executrix  and  not  person- 
ally, and  the  court  said  it  should  have  been  rendered  against  her  per- 
sonally. And  again  in  124 — 622,  the  court  refused  to  change  the  judg- 
ment on  the  ground  of  mistake,  because  the  parties  had  executed  the 
veiy  instrument  which  they  intended  to  execute.  But  in  116 — 413,  which 
was  an  action  on  another  note,  the  defendant  was  held  not  to  be  liable 
personally,  because  the  note  expressly  limited  the  liability  to  her 
representative  capacity.  In  rendering  the  opinion,  Avery,  J.,  says:  "It 
would  seem  that  the  rule  applicable  to  a  personal  representative,  who 
signs  in  his  fiduciary  capacity,  was  founded  upon  a  principle  that  can 
scarcely  be  said  to  have  survived  modern  changes;  but  however  it 
originated,  it  is  a  part  of  the  law  of  this  State  repeatedly  affirmed 
previously  and  last  approved  by  us  in  a  case  between  some  of  the  same 
parties  at  this  term."  Whether  the  court  intended  to  depart  from  this 
rule  and  adopt  another  in  Leroy  v.  Jacobosky,_  136— p.  450,  does  not 
clearly  appear.  See  also,  Gavazza  v.  Plummer,  53  Wash.,  14,  101  Pac, 
370,  42  L.  R.  A.   (N.  S.).   1. 

Sec.  2.     Special  promise  to  answer  for  the  debt,  default  or 

miscarriage  of  another. 

(50)   PEELE  v.  POWELL, 

156  N.  C,  553,  73  S.  E.,  234—1911. 

This  is  an  action  brought  by  plaintiff  against  the  defendant, 
admrx.  of  Edgar  Powell,  to  recover  $286,  for  the  value  of  goods 
sold  and  delivered  to  J.  T.  Cook,  for  which  it  is  alleged  the  de- 
fendant's intestate  is  liable.  Upon  the  evidence  judgment  of  non- 
suit was   entered,   and   plaintiff  appealed.  Affirmed. 

Allen,  J.  The  liability  of  a  promisor  to  answer,  "upon  a  spe- 
cial promise,  the  debt,  default,  or  miscarriage  of  another  person" 
has  been  considered  in  numerous  decisions  of  this  court,  and  there 
is  frequently  much  difficulty  in  determining  whether  a  particular 
promise  is  within  the  statute.  The  term  "special  promise"  means 
an  express  promise,  and  not  one  implied  by  law.  Browne  Stat. 
Frauds,  sec.  166. 

Whether  oral  or  in  writing,  it  must  have  a  consideration  to  sup- 
port it  (Draughan  v.  Bunting,  31  N.  C,  10;  Stanly  v.  Hendrix,  35 
N.  C,  87;  Combs  v.  Harshaw,  63  N.  C,  198;  Haun  v.  Burrell, 
119  N.  C,  547)  ;  but  if  in  writing,  the  consideration  need  not  ap- 
pear in  the  writing,  and  may  be  shown  by  parol.  Nichols  v.  Bell, 
46  N.  C,  32;  Haun  v.  Burrell,  119  N.  C,  547.  If  the  promise  is 
based  on  a  consideration,  and  is  an  original  obligation,  it  is  valid, 
although  not  in  writing.     Hospital  Assn.  v.  Hobbs,  153  N.  C,  188. 

The  obligation  is  original  if  made  at  the  time  or  before  the 
debt  is  created  and  the  credit  is  eiven  solely  to  the  promisor,  as 
in  Morrison  v.  Baker.  81  N.  C,  80;  Sheppard  v.  Newton,  139  N. 
C  ,  536,  or  if  credit  is  given  on  the  promises  of  both,  as  princi- 


116  FORMATION    OF    CONTRACT. 

pals  and  as  jointly  liable,  and  not  on  the  promise  of  one  as  the 
surety  for  the  other.  Browne  Stat.  Frauds,  sec.  197 ;  Home  v. 
Bank,  108  N.  C,  119.  So  is  a  promise,  made  after  the  debt  is 
created,  when  by  reason  of  the  promise  the  original  debtor  is  re- 
leased ( Sheppard  v.  Newton,  139  N.  C,  379;  Jenkins  v.  Holly, 
140  N.  C,  379),  and  also  if  it  is  a  promise  to  pay  out  of  funds 
placed  in  the  hands  of  the  promisor  by  the  debtor  (Stanly  v.  Hen- 
drix,  35  N.  C,  86;  Threadgill  v.  McLendon,  76  N.  C,  24;  Mason 
v.  Wilson,  84  N.  C,  53;  Voorhees  v.  Porter,  134  N.  C,  604),  or 
if  a  promise  based  on  a  new  consideration  of  benefit  or  harm  pass- 
ing between  the  promisor  and  the  creditor.  Whitehurst  v.  Hyman, 
90  N.  C,  489.  If,  however,  there  is  a  promise  to  pay  out  of  a 
particular  fund,  and  the  fund  is  not  received  by  the  promisor,  it 
is  not  binding.     Bagley  v.  Sasser,  55  N.  C,  350. 

If  one,  under  the  former  practice,  was  arrested  in  a  civil  action, 
and  was  released  on  the  oral  promise  of  another  to  pay  the  debt, 
the  promise  was  binding  because  the  release  from  arrest  satisfied 
the  original  debt  (Cooper  v.  Chambers,  15  N.  C,  261  ;  Draughan 
v.  Bunting,  31  N.  C,  10),  but  it  was  otherwise  of  an  oral  promise 
to  pay  upon  condition  that  the  creditor  would  not  arrest  the 
debtor,  because  the  debtor  remained  liable.  Britton  v.  Thrailkill, 
50  N.  C,  331;  Rogers  v.  Rogers,  51  N.  C,  300;  Combs  v.  Har- 
shaw,  63  N.  C,  198. 

Where  the  promise  is  for  the  benefit  of  the  promisor,  and  he 
has  a  personal,  immediate  and  pecuniary  benefit  in  the  transaction, 
as  in  Neal  v.  Bellamy,  73  N.  C,  384,  and  in  Dale  v.  Lumber  Co., 
152  N.  C,  653,  or  where  the  promise  to  pay  the  debt  of  an- 
other is  all  or  part  of  the  consideration  for  property  conveyed  to 
the  promisor,  as  in  Hockaday  v.  Parker,  53  N.  C,  17;  Little  v. 
McCarter,  89  N.  C,  233",  Deaver  v.  Deaver,  137  N.  C,  242;  Sat- 
terfield  v.  Kindley,  144  N.  C,  455  ;  or  is  a  promise  to  make  good 
notes  transferred  in  payment  of  property,  as  in  Adcock  v.  Flem- 
ing, 19  N.  C.  225;  Ashford  v.  Robinson,  30  N.  C,  114,  and  in 
Rowland  v.  Rorke,  49  N.  C,  337,  the  promise  is  valid  although  in 
parol. 

If,  however,  the  promise  does  not  create  an  original  obligation, 
and  it  is  collateral,  and  is  merely  superadded  to  the  promise  of 
another  to  pay  the  debt,  he  remaining  liable,  the  promisor  is  not 
liable,  unless  there  is  a  writing;  and  this  is  true  whether  made 
at  the  time  the  debt  is  created  or  not.  Smithwick  v.  Shepherd,  49 
N.  C.  197;  Bagley  v.  Sasser,  55  N.  C,  350;  Scott  v.  Brvan,  73 
X.  C,  582;  Rowland  v.  Barnes,  81  N.  C,  239;  Haun  v.  Burrell, 
119  X.  C.  547;  Garrett-Williams  Co.  v.  Hamill,  131  N.  C,  59; 
Sheppard  v.  Newton,  139  N.  C,  535,  and  Supply  Co.  v.  Finch, 
147  X.  C,  106. 


statute;  of  frauds.  117 

In  our  opinion,  this  case  falls  within  the  last  class.  There  is 
no  evidence  of  benefit  to  the  intestate,  and  while  the  jury  would 
have  been  justified  in  finding  from  the  evidence  that  he  promised 
to  pay,  it  is  not  sufficient  to  sustain  a  finding  that  it  was  more 
than  a  promise  to  pay  the  debt  of  Cook,  for  which  he  (Cook) 
remained  liable.     .     .     . 

The  definition  of  a  promise  to  answer  for  the  debt  of  another, 
which  is  not  enforcible,  adopted  in  our  court  and  applicable  here, 
is :  "An  undertaking  by  a  person  not  before  liable,  for  the  pur- 
pose of  securing  or  performing  the  same  duty  for  which  the  party 
for  whom  the  undertaking  is  made  continues  liable."  Sheppard  v. 
Newton,  supra.  Tested  by  this  rule,  we  think  the  action  can  not 
be  maintained. 

The  account  began  on  22  February,  1906,  and  ended  27 
March,  1907.  The  witness  for  the  plaintiff,  Bryant,  testified  that 
about  the  time  of  the  last  date  (27  March,  1907),  the  plaintiff 
told  him  not  to  let  Cook  have  any  more  goods  without  a  written 
order  from  Powell,  and  that  Cook  had  no  credit  at  that  time.  The 
inference  is  that  Cook  had  credit  prior  to  that  time,  and  no  goods 
were  afterwards  sold  to  him.  It  is  true  that  same  witness  also 
said  that  for  all  goods  sold  to  Cook,  credit  was  extended  to  Pow- 
ell;  and  this  would  be  entitled  to  great  weight  if  he  had  stated 
something  said  or  done  by  Powell  authorizing  the  extension  of 
credit.  A  similar  statement  was  made  by  a  witness  in  Garrett- 
Williams  Co.  v.  Hamill,  131  N.  C,  59,  and  was  held  insufficient 
to  charge  the  promisor.  Again  he  says,  in  July,  1906,  he  heard 
Powell  tell  the  plaintiff  to  let  Cook  have  goods,  and  he  would  see 
that  they  were  paid  for.  He  does  not  state  whether  or  not  any 
goods  were  sold  to  Cook  at  that  time,  and  so  far  as  we  can  see, 
the  promise  related  to  a  single  transaction,  and  there  is  no  evi- 
dence that  it  is  embraced  in  the  account  sued  on.     .     .     . 

No  error. 

(51)   DRAUGHAN  v.  BUNTING  et  al. 
31    N.   C,   10—1848. 

This  was  an  action  of  assumpsit,  in  which  the  plaintiff  declared 
in  several  counts : 

1.  On  a  promise  to  indemnify  the  plaintiff  on  a  note  for  $600. 

2.  On  a  promise  to  indemnify  the  plaintiff  on  a  note  for  $479.- 
43.     .     .     . 

4.  To  recover  money  paid  on  a  judgment  obtained  on  a  note 
endorsed  by  the  plaintiff,  at  the  instance  and  request  of  the  tes- 
tator, John  Sellars,  as  supplemental  surety,  and  not  as  co-surety 
with  said  Tohn  Sellars  on  a  note  of  David  Underwood.     .     .     . 


118  FORMATION    OF    CONTRACT. 

The    defendants   pleaded   the   general   issue    and   the    statute    of 
frauds.     For  the  plaintiff  it  was  proved  that  he  endorsed  a  note 
for   $600,   payable   to   the    Bank    of    Cape    Fear,    in    which    David 
Underwood  was  principal  and  the  defendant's  testator,  John   Sel- 
lars,  surety,  which  was  renewed  from  time  to  time  until  the  note 
for  $479.43   was  given.      It   was    further  proved  that  a  judgment 
was  obtained  on  this  note  and  the  plaintiff  was  compelled  to  pay 
the  sum  of  $278.21,  which  he  sought  to  recover  of  the  defendants. 
The  plaintiff  then  proved  by  Underwood,  the  principal  in  the  note, 
that  when  he  applied  to  the  plaintiff  to  endorse   for  him,  he  de- 
clined doing  so  unless  he  could  be  indemnified,  which  he,   Under- 
wood, promised  should  be  done  ;  that  thereupon  John  Sellars,  the 
testator,  in  consideration  that  Underwood    would  convey  to  him  a 
large  number  of  slaves  to  secure  him  as  his,  Underwood's,  surety 
in  this   and  other   debts,    for   which   he,   Sellars,   was   liable   as   his 
surety,  promised  to  indemnify  the  plaintiff  and  save  him  from  all 
loss  in  becoming  endorser  on  Underwood's  note ;  that  Underwood 
did  accordingly  execute   an   absolute  bill  of   sale  to    Sellars    for  a 
large  number  of   slaves,  and  the  plaintiff  then   endorsed  the  note 
for  $600,  and  that   the  negroes   were  afterwards  sold  by   Sellars, 
and  he  acknowledged  he  had  in  his  hands  funds  with  which  to  dis- 
charge the  debt  for  which  the  plaintiff  was  liable  as  endorser.  The 
defendants  objected  to  the  competency  of  Underwood  as  a  witness 
to  prove  these  facts,  which  objection  was  sustained  by  the  court. 
Whereupon   the   plaintiff   executed   to   him   a   release,   and   the   de- 
fendants pleaded  it  since  the  last  continuance  in  bar  of  the  action. 
A  motion  was  then  made  by  defendants'  counsel,  that  the  plaintiff 
should  be  nonsuited,  both  on  the  ground  that  they  were  discharged 
by  the  release,  and  also  that  the  defendants'  liability,  if  any.  was 
for  the   debt,   default   or   miscarriage   of   another  and   not    for  his 
own  debt,  and  the  plaintiff  could  not  recover,  because  the  promise 
was  not  in  writing  as  required  by  the  statute  of   frauds. 

The  court  expressed  an  opinion  that  the  action  could  not  be 
sustained  and  the  plaintiff  submitted  to  nonsuit  and  appealed. 

Pearson,  J.  We  concur  with  His  Honor,  that  an  action  can  not 
be  maintained  upon  a  parol  promise  of  indemnity.  That  is  void 
by  the  statute  of  frauds.  Underwood  was  under  a  legal  liability 
to  indemnify  the  plaintiff  as  his  surety,  and  the  promise,  super- 
added by  the  intestate,  comes  within  the  words  and  meaning  of 
the  statute;  it  is  a  promise  to  answer  for  the  default  of  another, 
and  there  being  a  consideration  makes  no  difference;  it  required 
no  statute  to  make  void  a  promise  not  founded  upon  a  considera- 
tion. 

The  true  test  is,  has  the  plaintiff  a  cause  of  action  against 
another,  to  which   the  promise  in  question   is  superadded?     If  so, 


STATUTE    OF    FRAUDS.  119 

the  statute  applies.  But  if  there  is  no  debt  for  which  another  is 
already  or  is  about  to  become  answerable  to  the  plaintiff,  or  if  the 
debt  of  the  other  is  discharged  and  the  promise  in  question  is 
substituted,  the  statute  does  not  apply ;  as  when  a  creditor  dis- 
charges a  debtor,  who  is  in  custody,  upon  the  promise  of  a  third 
person  to  pay  the  debt,  the  original  cause  of  action  is  gone  by  the 
effect  of  the  discharge  ;  the  new  promise  is  substituted. 

We  are  of  opinion  that  the  effect  of  the  release  was  miscon- 
ceived. So  far  as  there  was  a  cause  of  action  arising  from  the  rela- 
tion of  co-suretyship  under  the  Act  of  1807,  the  release  to  the 
principal  is  a  bar ;  for  a  surety,  who  seeks  to  recover  from  a  co- 
surety a  ratable  part  of  money  paid,  must  take  care  to  do  no  act 
which  will  prevent  the  co-surety  from  having  recourse  against  the 
principal ;  inasmuch  as  his  right  to  contribution  involves  the  duty 
of  transferring  to  his  co-surety  a  right  to  recover  from  the  prin- 
cipal the  amount  which  he  is  called  upon  to  pay.  If,  therefore,  he 
releases  the  principal,  it  is  a  discharge  of  the  co-surety. 

The  case  must  be  viewed  as  if  no  promise  of  indemnity  had  been 
made,  for  that  is  void  by  the  statute;  and  as  if  no  relation  of  co- 
suretyship  had  existed,  for  that  is  destroyed  by  the  release. 

There  is,  however,  a  fact  in  this  case,  to  which  the  attention  of 
the  learned  Judge  seems  not  to  have  been  called,  which  entitles  the 
plaintiff  to  recover  upon  the  count  for  money  paid,  and  as  the  non- 
suit was  submitted  to,  from  the  intimation  of  His  Honor,  that  the 
plaintiff  could  not  recover  upon  the  facts  stated,  the  judgment 
must  be  reversed. 

The  intestate  received  property  from  Underwood,  sold  it,  and 
acknowledged  that  "he  had  in  his  hands  funds  to  discharge  the 
debt."  As  soon  as  the  intestate  received  the  money,  the  bank,  al- 
though it  had  a  cause  of  action  on  the  note,  had  a  new  and  dis- 
tinct cause  of  action  against  the  intestate,  upon  a  promise  implied 
by  law  upon  the  receipt  of  the  money  to  pay  the  debt. 

It  is  well  settled  that  if  A  is  indebted  to  B  and  puts  money  in 
the  hands  of  C  to  pay  B,  B  may  sue  C  for  money  had  and  re- 
ceived.    Chitty's  Pleadings,  vol.  1,  p.  4,  and  the  cases  there  cited. 

The  plaintiff,  who  was  forced  to  pay  the  bank,  can  truly  allege 
that  he  has  paid  money  which  the  intestate  was  under  legal  lia- 
bility to  pay,  in  consequence  of  the  receipt  of  the  money,  and  this, 
according  to  the  authorities,  gives  him  the  equitable  action,  as  it 
is  termed,  for  money  paid  to  the  use  of  the  intestate.  (  Smith's 
Leading  Cases,  1  vol.,  55,  note  and  cases  cited.)  It  can  not  be  ob- 
jected that  the  plaintiff  paid  the  money  officiously,  and  falls  under 
the  rule,  that  no  one  can  make  another  his  debtor  without  his  con- 
sent ;  for  as  his  suretv  on  the  note  he  was  liable  to  the  bank,  and 


120  FORMATION    OF    CONTRACT. 

has  been  forced  to  pay  a  debt,  which  the  intestate  ought  to  have 

paid. 

In  Hall  v.  Robinson,  8  Ired.,  56,  a  surety,  having  paid  a  part 
of  the  debt  out  of  his  own  funds,  was  held  to  be  entitled  to  re- 
cover of  a  co-surety  the  amount  placed  by  the  principal  in  the 
hands  of  the  latter  to  be  applied  to  the  debt,  for  the  reason  that 
"having  received  it  to  pay  the  debt  he  could  not  in  conscience  and 
ought  not  in  law  to  keep  it ;"  he  was,  in  fact,  to  that  amount  the 
real  debtor.  The  cause  of  action  did  not  arise  out  of  the  relation 
of  co-suretyship  and  depend  on  the  Act  of  1807,  for  the  principal 
having  provided  funds  could  not  be  said  to  be  insolvent,  nor  was 
the  action  for  a  ratable  proportion.  That  case,  like  the  present, 
rested  upon  the  broad  principle,  that  the  defendant  having  re- 
ceived money  to  pay  a  debt,  which  the  plaintiff  was  afterwards 
forced  to  pay,  was  the  debtor  of  the  plaintiff. 

Per  Curiam.     Judgment  reversed  and  a  venire  de  novo  awarded. 

(52)   WHITEHURST  v.  HYMAN, 
90  N.  C,  487—1884. 

This  was  a  civil  action  to  recover  from  the  defendant  on  a 
promise  to  pay  certain  debts  of  one  Harrell,  and  the  statute  of 
frauds  was  relied  upon  as  a  defense.  The  facts  appear  sufficiently 
in  the  opinion.  There  was  a  judgment  for  the  plaintiff,  and  de- 
fendant appealed. 

MERRIMON,  J.  The  material  part  of  the  statute  relied  upon  by 
the  defendant  provides  that,  "No  action  shall  be  brought  whereby 
to  charge  .  .  .  any  defendant  upon  a  special  promise  to  answer 
the  debt,  default,  or  miscarriage  of  another  person,  unless  the 
agreement  upon  which  such  action  shall  be  brought,  or  some  memo- 
randum or  note  thereof  shall  be  in  writing  and  signed  by  the 
party  charged  therewith,  or  some  other  person  thereunto  by  him 
lawfully  authorized."     The  Code,  sec.  1552. 

It  is  settled  by  many  judicial  decisions  in  construing  this  statute, 
and  others  substantially  like  it,  that  where  there  is  some  new  and 
original  consideration  of  benefit  or  harm  moving  between  the  party 
to  whom  the  debt  to  be  paid  is  due,  and  the  party  making  the 
promise  to  pay  the  same,  such  case  is  not  within  the  statute;  as 
where  a  promise  to  pay  an  existing  debt  is  made  in  consideration 
of  property  placed  by  the  debtor  in  the  hands  of  the  party  prom- 
ising,  or  where  the  party  to  whom  the  promise  is  made  relin- 
quishes a  levy  on  the  goods  of  the  debtor  for  the  benefit  of  the 
promisor,  or  where  the  party  promising  has  a  personal  interest, 
benefit  or  advantage  of  his  own  to  be  subserved,  without  regard  to 
the  interests  or  advantage  of  the  original  debtor;  as,  for  example, 


STATUTE    OF    FRAUDS.  121 

if  a  creditor  has  a  lien  on  certain  property  of  his  dehtor  to  the 
amount  of  his  debt,  and  a  third  person  who  has  an  interest  in  the 
same  property  promises  the  creditor  to  pay  the  debt  in  considera- 
tion of  the  creditor's  relinquishing  his  lien.  Such  promises  are  not 
within  the  statute,  because  they  are  not  made  "to  answer  the  debt, 
default,  or  miscarriage  of  another  person." 

It  may  be,  the  performance  of  the  promise  will  have  the  effect 
of  discharging  the  original  debtor ;  but  such  discharge  was  not  the 
inducement  to,  or  the  consideration  to  support  the  promise. 

The  moving,  controlling  purpose  of  the  promisor  in  such  case  is 
his  own  advantage,  not  that  of  the  debtor.  It  not  un frequently 
happens  that  in  a  great  variety  of  business  circumstances  it  be- 
comes important  in  a  valuable  sense  to  third  parties  to  discharge 
the  debt  of  a  debtor,  or  relieve  his  property  from  liability  to  the 
creditor  for  the  benefit  of  such  third  parties,  without  regard  to 
the  benefit,  ease  or  advantage  of  the  debtor. 

The  advantage  to  the  third  party,  the  promisor,  is  a  sufficient 
valuable  consideration  to  support  a  contract  separate  from,  and 
independent  of,  the  debt  to  be  discharged. 

Draughan  v.  Bunting,  9  Ired.,  10;  Stanly  v.  Hendricks,  13  Ired., 
86;  Threadgill  v.  McLendon,  76  N.  C,  24;  Mason  v.  Wilson,  84 
N.  C,  51  ;  3  Parsons  on  Cont.,  24,  25  and  note;  Alger  v.  Scoville, 
1  Gray,  391;  Fears  v.  Story,  131  Mass.,  47;  Williams  v.  Lepper, 
3  Bur.  1886;  Little  v.  McCarter,  89  N.  C,  233. 

In  this  case  the  plaintiffs  and  others  had  judgments  against  one 
Harrell,  and  the  plaintiff  was  pressing  him  by  proceedings  supple- 
mentary to  the  execution.  The  defendant  claimed  to  own,  was  in 
possession  of,  and  had  deeds  for  real  and  personal  property  ob- 
tained from  the  debtor,  Harrell ;  he  was  summoned  to  be  examined 
in  the  supplementary  proceedings  against  Harrell,  and  was  about 
to  be  examined  as  to  the  character  of  his  title,  his  indebtedness  to 
Harrell,  and  what  he  might  know  about  his  property.  Under 
such  circumstances  he  promised  the  plaintiff  and  other  judgment 
creditors  that  he  would  pay  them  fifty  percent  of  their  judgments 
against  Harrell  if  they  would  discontinue  the  proceeding  in  which 
he  was  about  to  be  so  examined.  The  plaintiff  and  the  other  cred- 
itors accepted  the  promise,  and  discontinued  the  proceedings. 
There  is  nothing  in  the  record  tending  to  show  that  the  purpose 
of  the  promise  was  for  the  benefit  of  Harrell,  or  that  his  advan- 
tage was  considered  at  all. 

It  is  manifest,  as  the  case  appears  in  the  record,  that  the  de- 
fendant did  not  "promise  to  answer  the  debt,  default,  or  miscar- 
riage" of  Harrell  in  the  sense  of  the  statute.  It  plainly  was  not 
his  purpose  to  do  so.  He  claimed  to  be  the  owner  of  the  property 
sought  to  be  reached  by  the  plaintiff;   his   title   was   about  to  be 


122  Formation   of  contract. 

scrutinized;  he  himself  was  about  to  be  examined  concerning  it, 
and  his  indebtedness  to  Harrell.  To  avoid  such  scrutiny,  to  quiet 
his  title  for  his  own  benefit  and  advantage,  he  promised  to  pay, 
without  condition,  fifty  percent  of  the  judgments  referred  to. 

It  appears  that  his  purpose  was  to  relieve  himself  and  his  prop- 
erty from  embarrassment  or  question,  to  buy  his  peace,  as  he  had 
a  right  to  do,  and  he  is  bound  to  pay  the  price  he  agreed  to  pay 
for  it.  Such  a  consideration  is  valuable,  and  independent  of  the 
indebtedness  of  Harrell  to  the  plaintiff.  He  got  the  advantage  he 
bargained  for,  personal  to  himself  without  regard  to  Harrell,  and 
he  can  not  take  shelter  behind  the  statute.     .     .     . 

No  error. 

Application   of   the   statute: 

1.  From  the  wording  of  the  statute  it  applies  to  all  kinds  of  obliga- 
tions of  the  third  person.  Combs  v.  Harshaw,  63 — 189;  Pollock  Cont., 
169. 

2.  The  promise  to  pay  the  debt  must  be  in  writing.  Bagley  v.  Sasser, 
55—350;  Rowland  v.  Barnes,  81—234;  Scott  v.  Bryan,  73—582;  Garrett- 
Williams  Co.  v.  Hamill,  131—57;  Britton  v.  Thrailkill,  50—104. 

3.  The  liability  of  the  third  person  must  continue.  If  the  cause  of 
action  is  superadded  to  the  original,  the  statute  applies,  but  otherwise 
where  the  original  debt  is  discharged.  Cooper  v.  Chambers,  15 — 261 
Shaver  v.  Adams,  32 — 13;  Hill  v.  Doughty,  33 — 195;  Stanly  v.  Hendricks 
35—86;  Rogers  v.  Rogers,  51—300;  Styron  v.  Bell,  53—222;  Hicks  v 
Critcher,  61—353;  Combs  v.  Harshaw,  63—198;  Home  v.  Bank.  108—109 
Haun  v.  Burrell,  119 — 544;  Sheppard  v.  Newton,  139 — 533;  lenkins  v 
Holly,  140—379;  Whitehurst  v.  Padgett,  157—424;  Parker  v.  Daniels 
159—518;  Farley  v.  Cleveland,  4  Cowen,  432,  15  A.  D..  387;  Mankin  v 
lones,  63  W.  Va.,  373,  60  S.  E.,  248,  15  L.  R.  A.  (N.  S.),  214;  Hurst  Hdw 
Co.  v.  Goodman,  68  W.  Va.,  462,  69  S.  E.,  898,  32  L.  R.  A.  (N.  S.),  598 
20  Cyc.  163. 

4.  It  does  not  apply  to  a  promise  made  to  the  debtor  himself.  Little 
v.  McCarter,  89—233;  Deaver  v.  Deaver,  137—240;  Haun  v.  Burrell,  119 
—544;  25  L.  R.  A.,  264,  note.  Where  A  sold  a  tract  of  land  to  B  and 
gave  a  bond  for  title,  and  B  promised  orally  to  pay  certain  debts  of 
A.  this  was  not  within  the  statute  as  to  the  debt  of  another,  but  was 
invalid  as  a  contract  for  land.  Rice  v.  Carter.  33 — 298:  Satterfield  v. 
Kindlev.  144 — 455;  Barker  v.  Bucklin,  2  Denio,  45,  43  A.  D.,  726;  Clark 
Cont.,  69;  Pollock  Cont..  170;  20  Cyc,  174. 

5.  It  dries  not  apply  to  a  promise  to  pay  out  of  property  of  debtor  in 
the  promisor's  hands.  Mason  v.  Wilson,  84 — 51;  Threadgill  v.  McLen- 
don,  76—24;  Voorhees  v.  Porter,  134 — 591;  29  Am.  &  Eng.  Encyc,  927; 
but  where  A  purchased  property  belonging  to  an  estate  and  promised 
the  executor  to  pay  certain  debts  of  the  estate  the  creditors  could  not 
sue  \  directly.  Styron  v.  Bell,  53—222;  Hall  v.  Robinson.  30—56;  Stimp- 
son  v.  Fries,  55—161;  Bagley  v.  Sasser.  55—350;  Neal  v.  Bellamy,  73— 
384;  Townsend  v.  Long.  77  Pa.  St.,  143,  18  A.  R.,  438:  United  Walnut 
•  ',,.    v.    Courtney,  96   Ark.,  46,    130   S.   W.,   566.    Ann.    Cas.,   1912   B    443; 

!0  Cyc,  172 

6  \  contract  of  guaranty  comes  within  the  statute;  certainly  in  case 
of  conditional  guaranty,  or  guaranty  of  collection.  Carpenter  v.  Wall. 
20 — 144;  Supply  Co.  v.  Finch,  147—106;  Leonard  v.  Vredenburgh,  8 
rohns.,  J".  5  \.  D.,  317;  Dow  v.  Swett,  134  Mass..  140,  45  A.  R..  310; 
ohardt  Bros.  v.  Duff,  156  Iowa,  144.  135  N.  W.,  609,  40  L.  R.  A. 
(N.  S).  242;  Child's  Suretyship  and  Guaranty,  83.  If  it  is  an  absolute 
guaranty,  or  guaranty  of  payment,  it  is  an  independent  promise;  or 
if  it  is  a  promise  to  pay  a  man's  own  debt,  as  in  the  guaranty  of  a  note 


STATUTE     OF     FRAUDS.  123 

transferred  for  that  purpose,  it  is  not  within  the  statute.  Adcock  v. 
Fleming,  19—225;  Ashford  v.  Robinson,  30—114;  Marrow  v.  White,  151 
—96;  Partin  v.  Prince,  159 — 553;  Eagle  Mowing  Co.  v.  Shattuck,  53 
Wis.,  455,  40  A.  R.,  780;  Swenson  v.  Stoltz,  36  Wash.,  318,  2  Ann. 
Cas.,  504. 

7.  Whether  a  contract  of  indemnity  is  within  the  statute  has  been 
held  in  different  ways.  That  it  is  within  the  statute,  see  Draughan  v. 
Bunting,  supra;  Martin  v.  McNeely,  101 — 634;  Brown  v.  Adam-.  1  Stew. 
(Ala.),  51,  18  A.  D.,  36;  Nugent  v.  Wolfe,  111  Pa.  St.,  471,  56  A.  R.,  291; 
Hartley  v.  Sanford,  66  N.  J.  L..  27,  55  L.  R.  A.,  206;  Craft  v.  Lott,  87 
Miss.,  590,  40  So..  426,  6  Ann.  Cas..  670.  That  it  is  not  within  the 
statute,  see  Jones  v.  Shorter,  1  Ga.,  294,  44  A.  D..  649;  Anderson  v. 
Spence,  72  Ind..  315,  37  A.  R.,  162;  Smith  v.  Delaney,  64  Conn.,  264,  42 
A.  S.  R..  181;  Rose  v.  Wallenberg,  31  Ore.,  269,  65  A.  S.  R.,  826,  39 
L  R.  A.,  378;  McCormick  v.  Boylan,  83  Conn.,  686,  78  Atl..  33j,  Ann. 
Cas.,  1912  A,  882;  Alphin  v.  Lowman,  115  Va.,  441,  79  S.  E..  1029, 
Ann.  Cas..  1915  A.  863;  16  A.  &  E.  Enc,  169;  2  Page  Con.,  sec.  634; 
Clark    Cont.,   70. 

8.  The  statute  does  not  apply  where  the  promise  is  in  effect  to  pay 
promisor's  own  debt,  or  to  protect  his  right  in  certain  property.  Hocka- 
day  v.  Parker,  53 — 16;  Dearer  v.  Deaver,  137 — 240;  Harriman  Cont., 
sees.  578,  579,  581;  Satterheld  v.  Kindley,  144—455,  15  L.  R.  A.  (X.  S), 
399;  Hospital  v.  Hobbs,  153—188;  Rogers  v.  Lumber  Co.,  154—108; 
Whitehurst  v.  Padgett.  157 — 424;  Frohardt  Bros.  v.  Duff,  156  Iowa. 
144.  135  X.  \\\,  609,  40  L.  R.  A.  (X.  S.).  242:  Nelson  v.  Boynton,  3 
Mete,  396,  37  A.  D.,  148;  20  Cyc,  167,  188. 

9.  The  statute  does  not  apply  when  credit  is  given  to  the  promisor 
alone,  or  to  him  and  the  third  person  jointly  as  principals,  but  it 
does  apply  when  his  obligation  is  in  any  way  collateral.  Peele  y. 
Powell,  supra,  and  cases  cited;  Whitehurst  v.  Padgett,  157 — 424;  Davis 
v.  Patrick.  141  U.  S.,  479;  Sherman  v.  Alberts,  153  Mich.,  361.  116 
N  W.,  1090.  136  A.  S.  R.,  486;  Tohnson  v.  Bank,  60  W.  Va.,  320,  55 
S.   E.,  394.  9  Ann.   Cas.,  893;   20  Cyc,   180,   184. 

10.  There  must  be  a  real  liability.  The  promise  to  pay  an  invalid  debt 
of  another  is  not  binding;  as  the  promise  to  pay  the  debt  of  a  married 
woman  which  is  void.  But  where  it  is  only  voidable,  as  in  case  of  an 
infant,  the  promise  is  binding.  Scott  v.  Bryan,  73 — 582;  Dexter  v. 
Blanchard.  11  Allen,  365;  King  v.  Summett,  73  Ind.,  312,  38  A.  R.,  144; 
Brown  v.  F.  &  M.  Nat.  Bank,  88  Tex..  265.  33  L.  R.  A..  359;  20  Cyc,  162. 

11.  A  consideration  7s  necessary.  If  the  promise  is  made  at  the  same 
time  as  the  original  promise,  the  original  consideration  is  sufficient:  if 
made  afterwards,  there  must  be  an  additional  consideration.  Peele  v. 
Powell,  supra;  Craig  v.  Stewart,  163—531;  Farley  v.  Cleveland.  4  Cowen, 
432,  15  A.  D.,  387. 

12.  By  Lord  Tenterden's  Act.  9  Geo.  IV,  a  writing  is  required  to 
bind  a  person  for  any  representation  relating  to  the  credit  of  another 
person,  to  enable  him  to  obtain  goods,  etc.  This  has  been  adopted 
in  several  States,  but  is  not  in  force  in  N.  C.  Walker  v.  Russell.  186 
Mass..  69.  71  N.  E.,  86.  1  Ann.  Cas.,  688;  Knight  v.  Rawlings.  205  Mo.. 
412.  104  S.  W..  38.  13  L.   R.  A.   (N.  S.),  212.  12  Ann.  Cas..  325. 


124  FORMATION    OF    CONTRACT. 


Sec.  3.     Contracts  to  sell  or  convey  lands,  or  any  interest 

therein. 

1.    Any    interest    in    land. 

(53)  HOLMES  v.  HOLMES, 

86  N.   C,  205—1882. 

In  1851  the  land  in  controversy  was  conveyed  to  a  trustee  to  be 
held  in  trust  for  the  plaintiff ;  in  1858  the  trustee  conveyed  the 
land  to  one  Worth,  and  the  plaintiff  consented  orally  to  the  sale. 
This  was  an  action  for  the  land.  There  was  judgment  for  the 
plaintiff  and  defendant  appealed.  Affirmed. 

Ruffin,  J.  .  .  .  The  position  assumed  for  the  defense  is  that  the 
plaintiff,  in  consideration  of  the  emancipation  of  a  slave,  her  sis- 
ter, had  parted  with  her  trust  estate ;  and  this  it  is  insisted  she 
could  do  by  parol,  for  that,  as  a  trust  estate  may  be  created  by 
parol,  so  may  one  be  disposed  of  in  that  manner.  We  were  fur- 
nished with  no  authorities  in  support  of  this  position,  and  so  far 
as  our  researches  have  gone,  they  are  all  against  it.  In  Maxwell 
v.  Wallace,  Busb.  Eq.,  251,  a  contract  for  the  sale  of  an  equitable 
interest  in  land  was  held  to  be  within  the  statute  of  frauds,  and 
void  unless  in  writing;  and  so  too  in  Simms  v.  Killian,  12  Ired., 
252,  and  Rice  v.  Carter,  11  Ired.,  298.  In  fact,  all  the  authori- 
ties, whether  taken  from  the  text-writers  or  from  adjudged  cases, 
concur  in  saying  that  wherever  anything  is  done,  which  substan- 
tially amounts  to  a  transfer,  or  parting  with  an  interest,  whether 
legal  or  equitable,  in  lands,  the  contract  is  for  the  sale  of  "an  in- 
terest in  or  concerning  lands,"  and  comes  within  the  statute.  The 
distinction  which  obtains  between  such  a  transfer  and  an  original 
declaration  of  a  trust  is  clearly  pointed  out  by  Pearson,  C.  J.,  in 
Shelton  v.  Shelton,  5  Jones  Eq.,  292,  and  by  the  present  Chief 
Justice  in  Shields  v.  Whitaker,  82  N.  C,  516.     .     .     . 

Xo  error. 

(54)  Mccracken  v.  Mccracken, 

88  N.  C,  272—1883. 

This  was  a  civil  action  in  which  the  facts  were  as  follows: 
In  his  complaint  as  originally  drawn  and  first  amended,  the 
plaintiff  alleged  that  in  1872  the  defendant  was  the  owner  of  a 
tract  of  land  in  Haywood  County,  whereon  was  a  valuable  mill 
site  and  convenient  waterpower,  which  he  was  anxious  to  have  im- 
proved ;  that  the  parties  made  a  parol  agreement  to  the  effect  that 


statute;  of  frauds.  125 

the  plaintiff  should  erect  a  mill  upon  the  premises  and  dig  a  race, 
and  in  consideration  of  his  so  doing  the  defendant  should  convey 
to  him  the  said  mill  seat,  the  race  privilege,  and  a  sufficient  lot  of 
ground  for  a  logway  about  the  sawmill ;  that  in  pursuance  of  said 
agreement  the  plaintiff  erected  a  grist  mill  and  sawmill  at  the 
place,  dug  the  race,  and  continued  to  use  the  same  up  to  1879, 
when  defendant  gave  him  written  notice  to  remove  his  mills  and 
quit  the  place ;  that  the  plaintiff  had  thus  sustained  a  loss  of 
$1,000;  that  the  defendant  should  be  required  to  convey  the  prop- 
erty to  the  plaintiff,  or  pay  the  loss  sustained. 

The  defendant  denied  that  there  was  any  agreement  in  regard 
to  the  land,  but  that  the  plaintiff  entered  upon  the  land  and  built 
the  mill  without  authority  and  without  any  understanding  as  to 
the  title  ;  that  after  using  it  for  several  years,  without  paying  any 
rent,  the  plaintiff  offered  to  buy  the  land  for  the  sum  of  $50, 
which  defendant  declined  as  not  being  enough,  and  that  this  was 
the  only  proposition  that  ever  passed  between  them  in  regard  to  a 
purchase;  finding  that  the  race  and  flow  of  water  damaged  the 
land,  he  notified  the  defendant  to  remove  his  mill  and  machinery 
from  the  premises,  and  he  now  asks  the  court  to  require  him  to 
remove  them ;  he  also  alleges  that  he  has  been  damaged  to  the 
amount  of  $1,000. 

The  plaintiff  offered  evidence  to  show  the  parol  agreement  as 
alleged,  and  also  that  defendant  had  given  him  license  to  enter 
and  occupy  the  premises  and  thereby  induced  him  to  make  the  ex- 
penditure alleged.  The  defendant  objected  to  this  evidence,  but 
it  was  admitted  by  the  court,  not  to  show  a  parol  contract  to  con- 
vey land,  but  to  show  a  license,  and  allowed  the  plaintiff  to  amend 
his  complaint  so  as  to  allege  this  view  of  the  case. 

Upon  the  issues  submitted  the  jury  found  that  the  improvements 
were  put  on  the  land  with  the  knowledge  and  permission  of  the 
defendant ;  that  the  defendant  notified  the  plaintiff  to  quit  the 
premises  and  plaintiff  did  so ;  that  the  value  of  the  improvements 
was  $150.  From  a  judgment  for  the  plaintiff,  the  defendant  ap- 
pealed. 

Ruffix,  J.  In  consideration  of  the  decisions  made  in  Cham- 
bers v.  Massey,  7  Ired.  Eq.,  286;  Dunn  v.  Moore,  3  Ired.  Eq.,  364, 
and  Sain  v.  Dulin,  6  Jones's  Eq.,  95,  it  may  well  be  doubted 
whether  the  court  can  grant  any  relief,  even  so  far  as  to  give  the 
purchaser  compensation  for  his  improvements,  under  a  parol  con- 
tract for  the  purchase  of  land,  the  terms  of  which  are  denied  or 
disputed  by  the  defendant  in  his  answer.  These  cases  all  go  to 
the  length  of  saying,  that  if,  in  an  action  brought  to  enforce  the 
specific  performance  of  such  a  contract,  or  in  the  alternative  for 
compensation    for   improvements   put    upon    the   land,   the   answer 


126  FORMATION    OF    CONTRACT. 

should  deny  that  there  was  any  contract,  or  allege  that  its  terms 
differed  from  those  set  out  in  the  complaint,  then  the  court  could 
grant  neither  relief,  because  the  statute  forbids  its  going  into  proof 
to  establish  for  any  purpose  whatsoever,  a  contract  variant  from 
the  one  admitted  in  the  answer;  and  if  upon  that  the  plaintiff 
could  get  no  relief,  he  could  not  get  it  at  all. 

These  cases  seem  to  have  been  well  considered,  and  much  pains 
taken  in  them  to  make  known  their  reasons  and  to  show  wherein 
they  differed  from  other  decisions  (and  it  is  not  to  be  denied  that 
there  are  others)  which  seemed  to  be  opposed  to  them.  It  would, 
therefore,  require  a  most  convincing  argument  to  induce  me,  speak- 
ing for  myself  alone,  to  depart  from  principles  so  maturely  con- 
sidered and  so  clearly  enunciated,  and  especially  as  they  seem  to  be 
in  strict  keeping  with  the  wise  policy  of  the  statute  of  frauds,  in 
that  they  close  the  door  upon  temptations  to  commit  perjuries,  and 
the  assertion  of  feigned  titles  to  property.  It  is  not  necessary, 
however,  that  we  should  now  go  to  the  full  length  of  those  de- 
cisions, as  we  conceive  a  much  less  stringent  rule,  and  one  sanc- 
tioned by  all  the  authorities,  is  sufficient  to  preclude  this  plaintiff 
from  the  recovery  he  is  seeking  to  make. 

In  Albea  v.  Griffin,  2  Dev.  &  Bat.  Eq.,  9,  which  is  so  often  re- 
ferred to  as  the  leading  case  on  the  subject,  the  right  of  a  pur- 
chaser under  a  parol  contract  to  have  compensation  for  improve- 
ments, made  under  an  honest  expectation  that  the  land  would  be 
his,  was  put  expressly  upon  the  ground  that  it  would  be  against 
conscience  to  allow  the  owner  under  such  circumstances  to  acquire 
and  enjoy  the  fruits  of  another's  labor,  or  the  expenditure  of  an- 
other's money,  and  thus  enrich  himself  to  the  injury  of  that  other. 
Bui  neither  in  that  case  nor  in  any  other  in  which  its  principles 
have  been  adopted — and  there  are  many  such — is  there  even  a 
suggestion  to  be  found,  that  an  action  can  be  sustained  in  any 
form,  or  in  any  court,  whether  at  law  or  in  equity,  for  damages 
for  the  nonperformance  of  such  a  contract;  and  that  is  simply 
what  this  action  is,  nothing  more  nor  less.  To  permit  it  to  be 
done,  would  be  for  the  courts  to  act  in  the  very  teeth  of  the  stat- 
ute, in  defiance  of  the  declared  will  of  the  Legislature. 

Wherein  could  consist  the  difference  between  a  direct  enforce- 
ment of  the  contract,  in  such  case,  and  the  court's  saying  to  the 
owner,  we  can  not  compel  you  to  part  with  your  property,  but 
should  you  undertake  to  exercise  ownership  over  it,  we  will  mulct 
you  with  damages?  The  most  they  can  do,  and  all  they  have  ever 
undertaken  to  do,  is  to  say  to  him  that  if  he  repudiates  the  con- 
tract he  must  he  content  with  taking  back  what  was  his  own,  and 
at  its  own  intrinsic  value,  unenhanced  at  the  cost  or  by  the  labor 
of  another. 


STATUTE    OF    FRAUDS.  127 

But  what  sort  of  connection  is  there  between  that  principle  and 
this  case,  in  which  the  defendant  is  not  only  content  with  being 
restored  to  what  was  his  own,  but  invites  the  plaintiff  to  take  what 
is  his  (buildings,  machinery  and  all),  and  craves  the  aid  of  the 
court  in  compelling  him  to  do  so? 

If  we  consider  the  contract  as  a  license  given  to  the  plaintiff  to 
enter  upon  the  land,  and  erect  and  enjoy  the  improvements,  we  can 
not  perceive  that  it  in  the  least  serves  to  help  his  case.  If  purely 
a  license,  it  excused,  it  is  true,  his  entry  upon  the  land  which 
would  otherwise  have  been  a  trespass;  but  it  was  still  revocable, 
and  its  continuance  entirely  dependent  upon  the  will  of  the  owner. 
If  intended  to  pass  a  more  permanent  and  continuing  right  in  the 
land,  whereby  the  authority  or  estate  of  the  owner  could  be  in  the 
least  impaired,  it  was  then  not  only  necessary  to  be  evidenced  by 
writing,  but  could  only  be  made  effectual  by  deed.  In  Hilliard 
on  Vendors,  124,  it  is  said  that  a  license  which  grants  an  estate, 
however  short,  requires  a  deed;  and  in  3  Kent,  352,  the  doctrine 
is  thus  stated :  "A  claim  for  an  easement  must  be  founded  upon  a 
grant  or  upon  a  presumption  which  supposes  one,  for  it  is  a  per- 
manent interest  in  another's  land,  with  a  right  to  enter  and  enjoy 
the  same  ;"  and  to  the  same  effect  are  the  decisions  in  this  court  in 
Bridgers  v.  Purcell,  1  Dev.  &  Bat.,  492,  and  Carter  v.  Page,  4 
Ired.,  424.  In  any  point  of  view  that  can  be  taken  of  the  case, 
this  court  thinks  the  plaintiff  must  fail  in  his  action. 

Having  made  a  contract  such  as  the  law  discourages  from  con- 
siderations of  public  convenience,  he  must  abide  the  consequences  ; 
and  as  the  defendant  disclaims  a  purpose  to  appropriate  what  is 
his  (the  plaintiff's),  he  must  be  content  with  getting  that  back- 
without  compensation  for  any  loss  he  may  have  sustained. 

The  judgment  of  the  court  below  is,  therefore,  declared  to  be 
erroneous,  and  the  same  is  reversed,  and  judgment  will  be  entered 
here  that  the  defendant  will  go  without  day. 

Smith,  C.  T-.  files  a  dissenting  opinion,  in  which  he  concurs  in 
the  disposition  of  the  appeal,  but  does  not  a^ree  with  the  court 
in  the  argument  upon  which  it  is  based,  citing  and  discussing 
numerous  cases. 

Revisal,  sec.  976.  All  contracts  to  sell  or  convey  any  lands,  tene- 
ments or 'hereditaments,  or  any  interest  in  or  concerning  them;  and  all 
leases  and  contracts  for  leasing  land  for  the  purpose  of  digging  for 
gold  or  other  minerals,  or  for  mining  generally,  of  whatever  duration; 
and  all  other  leases  and  contracts  for  leasing  lands,  exceeding  in  dura- 
tion three  years  from  the  making  thereof,  shall  he  void  unless  said 
contract,  or  some  memorandum  or  note  thereof  be  put  in  writing  and 
signed  by  the  party  to  be  charged  therewith,  or  by  some  other  person 
by  him  thereto  lawfully  authorized. 

'Revisal,   sec.  980.      No   conveyance   of  land,   or   contract   to   convey,   or 
lease  of  land  for  more  than  three  years  shall  be  valid  to  pass  any  prop- 


128  formation  of  contract. 

erty  as  against  creditors  and  purchasers  for  value,  but  from  registration 
in    the   county  where   the   land   lies. 

In  addition  to  the  cases  given  above  and  the  cases  therein  cited,  the 
following  constructions  of  the  statute  have  been  made: 

The    statute    applies — 

To  all  contracts  to  sell  or  convey  any  interest  in  land,  including  legal 
and  equitable  interests.  While  certain  equitable  interests  may  arise 
without  writing,  as  in  parol  trusts,  yet  when  they  do  exist,  they  must  be 
transferred  in  writing.  Perkins  v.  Presnell,  100 — 220;  Dover  v.  Rhea, 
108—88;  Kelly  v.  McNeill,  118—349;  Holmes  v.  Holmes,  86—205;  Max- 
well v.  Wallace,  45—251;  Rice  v.  Carter,  33—298;  Wilkie  v.  Womble,  90— 
254;  Harper  v.  Spainhour,  64 — 629;  Henderson  v.  Henrie,  68  W.  Va.,  562, 
71  S  E.,  172,  34  L.  R.  A.  (N.  S.),  629;  Morgart  v.  Smouse,  103  Md., 
463,  63  Atl.,  1070,  7  Ann.  Cas.,  1140;  22  A.  &  E.  Enc,  27;  20  Cyc,  221,  230. 

A  parol  agreement  between  husband  and  wife  that  the  proceeds  of  the 
sale  of  the  wife's  land  should  be  invested  in  other  lands  for  her,  is 
within  the  statute,  but  she  is  entitled  to  such  proceeds  and  may  charge 
the  land  so  purchased.  Cade  v.  Davis,  96 — 139.  An  expectancy,  as  in 
case  of  the  heir  while  the  ancestor  is  living,  is  such  an  interest  as  re- 
quires a  writing.  Vick  v.  Vick,  126 — 123;  Tucker  v.  Markland,  101 — 422. 
A  parol  partition,  or  a  parol  agreement  for  partition,  is  void  under  the 
statute.  Fort  v.  Allen,  110 — 183;  Camp  Mfg.  Co.  v.  Liverman,  124 — 7; 
Rhea  v.  Craig,  141 — 602;  McPherson  v.  Seguine,  14 — 153;  Anders  v. 
Anders,  14 — 529;  Medlin  v.  Steele,  75 — 154;  but  in  some_  states  such 
partition,  when  the  parties  have  taken  possession  of  their  respective 
shares,  is  sustained  either  under  the  doctrine  of  part  performance  or 
upon  the  theory  that  the  partition  is  not  an  acquisition,  purchase  or 
transfer  of  an  interest.  Taylor  v.  Millard,  118  N.  Y.,  244,  23  N.  E.,  376, 
6  L.  R.  A.,  667;  Tomlin  v.  Hilyard,  43  111.,  300,  92  A.  D.,  118.  An 
easement  is  such  an  interest  as  must  be  contracted  for  in  writing  and 
conveyed  by  deed.  R.  R.  v.  Battle,  66 — 540;  Kennedy  v.  Williams,  87 — 6; 
Spawn  v.  S.  D.  R.  R.,  26  S.  D.,  1,  127  N.  W.,  648,  Ann.  Cas.,  1912  D, 
979;  Yeager  v.  Tuning,  79  Ohio  St.,  121,  86  N.  E..  657,  19  L.  R.  A. 
(N.  S.),  700. 

A  parol  agreement  by  C  to  execute  a  covenant  to  convey  land  to  D 
is  void  under  the  statute.  Ledford  v.  Ferrell,  34 — 285.  A  particular 
estate  of  freehold,  as  dower,  can  not  be  surrendered  to  the  remainderman 
by  parol  agreement.  Houston  v.  Smith,  88 — 312.  Submission  to  arbi- 
tration and  the  award  must  be  in  writing,  when  the  controversy  involves 
land.  Crissman  v.  Crissman,  27 — 498;  Pearsall  v.  Mayer,  64—549;  Fort 
v.  Allen,  110—183;  Walden  v.  McKinnon,  47  So.,  874,  22  L.  R.  A.  (N.  S.), 
716.  Location  of  boundary  lines  can  not  be  changed  by  parol  agreement, 
unless  it  relates  to  the  running  and  marking  at  the  time  the  deed  was 
made.  Shaffer  v.  Hahn.  Ill — 1;  Buckner  v.  Anderson,  111 — 572;  Carra- 
way  v.  Chancy,  51 — 361;  Presnell  v.  Garrison,  122 — 595;  Turner  v. 
Baker.  64  Mo.,'  218.  27  A.  R.,  226;  Lewis  v.  Oeram,  149  Cal.,  505,  87 
Pac.  60.  10  L.  R.  A.  (N.  S.),  610;  Payne  v.  McBride,  96  Ark.,  168,  131 
S.  W.,  463,  Ann.  Cas.,  1912  B,  661.  Where  there  is  a  valid  contract 
between  A  and  B  for  land.  C  can  not  be  substituted  for  either  by  parol. 
Love  v.  Cobb.  63—324:  Flinner  v.  McAvoy,  37  Mont.,  306,  96  Pac,  340, 
19  L.  R.  A.  (N.  S.).  879,  15  Ann.  Cas.,  1175.  Where  A  conveys  land  to 
!'.  with  a  parol  agreement  that  B  is  to  reconvey  the  whole  or  a  part  to 
him,  no  equitable  clement  being  involved,  such  agreement  is  void. 
Campbell  v.  Campbell,  55 — 365.  So  where  A  buys  land  at  execution  sale 
under  a  parol  agreement  that  B  may  afterwards  have  it  at  the  price  bid 
with  interest.  McKee  v.  Vail,  79 — 194.  But  where  in  such  contract 
there  i-  an  equitable  element  growing  out  of  a  trust,  fraud,  relation  of 
tlie  parties,  etc..  it  will  be  enforced.  Blount  v.  Carraway,  67 — 396; 
Cohen  v.  Chapman,  62 — 92:  Vannov  v.  Martin.  41 — 169;  Neely  v.  Torian, 
2 1  — 4 1 0 :    Mien  v.  Caylor,  120  Ala..  251,  74  A.  S.  R.,  31. 

\n    exchange   of   land-    is    within    the    statute.      Barnes   v.   Teague,    54 — • 
277.   62    \.    !>..   200;   Gordon    v.   Simmons.   136  Ky.,  273,    124  S.   W..   306. 


statute;  of  frauds.  129 

Ann.  Cas.,  1912  A,  305.  As  to  party  walls,  division  fences,  etc.,  there 
is  a  division  of  opinion,  but  it  seems  that  generally  these  do  not  come 
within  the  statute.  Walker  v.  McAfee,  82  Kan.,  182,  107  Pac,  637,  27 
L  R.  A.  (N.  S.),  226;  Meyers  v.  Perkins,  89  Neb.,  59,  130  N.  W.,  986, 
Ann.   Cas.,   1912  C,  468. 

Fixtures,  as  a  cotton  gin  and  press  so  attached  to  the  land  as  to  be- 
come a  part  of  the  freehold,  can  not  be  excepted  by  parol,  when  the  land 
is  sold  and  deed  executed.  Bond  v.  Coke,  71—97;  but  when  buildings  are 
sold  without  the  land  and  intended  to  be  separated,  they  may  be  removed 
as  personalty.     Cowell  v.  Ins.  Co.,  126 — 684. 

Leases  for  more  than  three  years,  and  all  mining  leases,  and  all  con- 
tracts for  such  terms,  must  be  in  writing.  Briles  v.  Pace,  35 — 279; 
Krider  v.  Ramsay,  79—354;  Jordan  v.  Furnace  Co.,  126 — 243;  Wade 
v.  Newbern,  77 — 469.  But  in  most  States  all  leases  for  more  than  one 
year  must  be  in  writing.  Childers  v.  Lee,  5  N.  M.,  576,  25  Pac,  781,  12 
L.  R.  A.,  67;  Wallace  v.  Scoggins,  18  Ore.,  502,  17  A.  S.  R.,  749. 

2.    Growing    trees. 

(55)  MIZELL  v.  BURNETT, 
49  N.  C,  249,  69  A.  D.,  744—1857. 

Action  of  assumpsit.  The  defendant  was  the  owner  of  a  tract 
of  land  on  Roanoke  River,  on  which  there  was  a  large  number  of 
white-oak  trees,  suitable  for  making  staves.  The  plaintiff,  wishing 
to  purchase  the  timber,  went  to  examine  it,  and  then  went  to  see  the 
defendant  at  Williamston,  Martin  County,  about  February  1,  1853. 
On  February  14,  1853,  the  defendant  wrote  to  Mr.  Webb,  cashier 
of  the  bank  at  Windsor,  about  seven  miles  from  the  residence  of 
the  plaintiff : 

"Sir:  I  sold  Solomon  Mizell,  Jr.,  some  oak  timber,  amount 
$800.  I  was  to  take  such  names  to  the  notes  enclosed  as  you 
would  write  me  were  good  for  the  amount.  I  also  send  a  letter 
over  to  Solomon  Mizell,  Jr. ;  please  give  it  to  him  (to-day)  if  he 
is  in  town." 

In  the  letter  to  Mr.  Webb  was  enclosed  a  letter  of  the  same 
date,  directed  to  the  plaintiff: 

"Sir:  I  received  your  letter  of  the  10th  inst.,  and  would  say 
in  reply,  you  can  have  my  oak  timber  on  the  tract  of  land,  known 
as  the  Walling  tract,  on  Roanoke  River,  as  per  agreement  when 
you  were  here,  for  $800,  in  two  notes,  12  and  18  months  from 
date,  with  interest  from  date,  with  such  security  as  L.  S.  Webb 
says  is  sufficient  for  the  amount.  I  am  unable  to  get  over,  but 
you  may  consider  it  a  trade,  you  complying  with  the  above.  You 
can  get  your  notes  fixed  as  above  stated;  show  them  to  L.  S. 
Webb,  and  get  a  letter  from  him,  to  me,  stating  that  the  security 
is  sufficient,  and  all  will  be  right ;  then  I  will  give  you  a  right  to 
the  timber  as  per  agreement."     (Signed  by  defendant.) 

"P.  S—  I  have  enclosed  the  two  notes  to  L.  S.  Webb  for  you  to 
fill  up.    J,  H.  B. 


130  FORMATION    OF    CONTRACT. 

"I  will  be  at  home  Saturday  next,  or  any  day  this  week,  or  you 
can  write  me  what  day  you  will  come,  and  I  will  be  here.    J.  H.  B." 

This  letter,  with  the  two  notes,  were  delivered  to  the  plaintiff 
in  a  day  or  two,  and  he  remarked  that  he  and  the  defendant  had 
made  the  trade  as  stated  in  the  letters,  and  that  he  would  have  the 
notes  signed,  and  return  with  them  a  letter  from  Mr.  Webb,  or  go 
over  and  deliver  the  notes  to  defendant. 

On  the  19th  of  February,  one  Wynn  offered  the  defendant 
$1,000  for  the  timber  in  question.  And  on  the  22d  of  February 
the  defendant  wrote  to  Mr.  Webb  as  follows : 

"Sir:  I  enclosed  two  notes  for  Mr.  Mizell  to  sign,  and  directed 
him  to  let  me  hear  from  him.  Not  hearing  from  him,  or  seeing 
him,  I  promised  it  to  another  man,  presuming,  from  his  conduct, 
that  he  has  abandoned  the  trade.  The  other  man  has  been  waiting 
for  some  time,  and  has  been  urging  me  to  say  what  I  will  do  with 
him.  I  put  him  off  for  some  time,  until  Mizell  could  come  or 
write,  and  he  has  not  done  either."     (Signed  by  defendant.) 

This  letter  was  received  the  day  it  was  written,  and  about  twelve 
days  afterward  the  plaintiff  called  on  Mr.  Webb,  with  the  notes 
signed,  and  the  latter  gave  him  a  letter  to  the  defendant,  stating 
that  the  notes  were  good  beyond  doubt.  Mr.  Webb,  at  the  same 
time,  notified  the  plaintiff  of  the  contents  of  the  letter  of  February 
22,  not  having  seen  him  sooner.  The  plaintiff  gave  as  his  reason 
for  not  coming  sooner  with  the  notes  that  his  wife  had  been  very 
sick,  and  there  had  been  a  freshet  which  prevented  his  getting 
over  to  Williamston.  The  plaintiff  then  went  to  see  the  defendant, 
about  twenty-five  miles  away,  and  presented  the  letter,  and  the 
notes.  The  defendant  kept  the  letter,  returned  the  notes,  and  re- 
fused to  make  title  to  the  timber. 

The  defendant  resisted  the  plaintiff's  recovery  on  the  following 
grounds : 

1.  That  the  evidence  showed  only  a  proposition  on  the  part  of 
defendant  to  sell,  but  no  acceptance  of  the  terms  before  the  sale 
to  Wynn. 

2.  That  the  defendant  had  the  right,  at  any  time,  to  withdraw 
his  proposition  before  its  acceptance  by  the  plaintiff,  and  in  his 
second  letter  to  Mr.  Webb  had  done  so. 

3.  The  defendant  did  not  tender  the  notes  in  a  reasonable  time. 

4.  The  contract  was  not  written  so  as  to  comply  with  the  statute 
of  frauds. 

There  was  a  verdict  and  judgment  for  the  plaintiff  for  $200, 
and  defendant  appealed. 

PEARSON,  J.  Tt  was  properly  conceded  that  a  contract  to  sell 
"growing  trees"  is  within  the  statute  of  frauds,  being  a  contract 
to  sell  "land  or  some  interest  in,  or  concerning  the  same." 


STATUTE    OF    FRAUDS.  131 

We  are  of  opinion  with  His  Honor,  that  to  make  a  contract  to 
sell  growing  trees  binding  on  the  vendor,  it  is  sufficient  that  the 
contract  be  signed  by  him,  and  it  is  not  necessary  that  it  should 
also  be  signed  by  the  vendee.     The  statute  provides  that  the  con- 
tract shall  be  signed  by  the  "party  to  be  charged  therewith."    This 
answers  the  purpose,  which  is  to  exclude  perjury  in  an  action  to 
enforce  the  contract.     In  reference  to  the  other  party  the  statute 
is  silent,  and  there  is  consequently  nothing  to  justify  the  construc- 
tion, that  he  is  also  required  to  sign.     If  the  purchaser  of  land 
pays  the  price  in  cash,  taking  a  bond  for  title,  there  is  no  reason 
why  he  should  put  his  name  to  the  contract.     So,  if  he  gives  a 
note  for  the  price,  that  is  sufficient,  although  the  note  makes  no 
reference  to  the  contract.     So,  if  the  vendor  binds  himself  in  writ- 
ing, and  is  content  to  take  the  verbal  promise  of  the  purchaser  to 
pay  the  price,  it  is  his  own  fault,  and  he  must  blame  himself  for 
the   folly  of  getting  into  a  situation  where  he  is  bound,  but  the 
other  party  can  not  be  charged  if  he  chooses  to  insist  upon  the 
statute.     Common  justice,  and  the  general  principles  of  law,   re- 
quire that  there  shall  be  a  mutuality  in  contracts;  that  is,  if  one 
party  is  bound  the  other  ought  to  be.     But  there  may  be  excep- 
tions.    Although  it  is  a  maxim  that  a  contract  is  never  binding 
unless  there  be  a  consideration,  yet  there  is  a  distinction  between 
a   consideration   and   the   mutuality   of   contracts   in   reference  to 
the  obligation  thereof,  and  the  fact  that  by  some  other  principle  of 
law,  or  the  provisions  of  a  statute,  one  party  has  it  in  his  power 
to  avoid  the  obligation,  although  it  suggests  a  very  forcible  reason 
for  not  entering  into  a  one-sided  contract,   does   not  necessarily 
have  the  effect  of  making  such  contract  void  as  to  both  parties. 
One  agrees  to  deliver,  at  a  future  day,  a  certain  article  to  an  in- 
fant, in  consideration  of  his  promise  to  pay  the  price,  the  contract 
is  not  void,  although  the  infant  may  avoid  the  obligation  on  his 
part,  if  he  chooses  to  protect  himself  on  the  ground  of  infancy. 
So,  if  one  agrees  in  writing  to  convey  land  in  consideration  of  a 
verbal  promise  of  the  other  party  to  pay  the  price,  the  contract  is 
binding  on  the  vendor,  although  the  vendee  may  avoid  the  obliga- 
tion on  his  part  if  he  chooses  to  protect  himself  under  the  provi- 
sions of  the  statute.     It  is  not  considered,  in  either  case,  that  the 
contract  is  nudum  pactum  and  void  for  the  want  of  consideration. 
This  is  the  result  of  the  English  decisions  in  reference  to  the  stat- 
ute of  frauds,  and  although  our  statute  is  not  precisely  in  the  same 
words,  yet  the  substance  is  the  same,  the  purpose  is  the  same,  and 
the  difference  in  the  wording  is  not  such  as  to  justify  a  difference 
in  construction.    Laythoarp  v.  Bryant,  2  Bing.  N.  C,  744  (29  Eng. 
Com.  L.  Rep.,  469)  ;  Allen  v.  Bennett,  3  Taunt.  Rep.,  170. 

We  also  agree  with  His  Honor,  that  the  letter  of  the  defendant 


132  FORMATION    OF    CONTRACT. 

to  the  plaintiff,  dated  February  14,  1853,  is  a  sufficient  writing,  or 
memorandum  of  the  contract  to  bind  the  defendant  and  subject 
him  to  an  action  for  a  breach,  provided  there  be  no  other  difficulty 
in  the  way  of  the  plaintiff.  The  writing  is  required  only  as 
evidence  of  the  contract  and  not  to  constitute  it.  This  is  well  set- 
tled both  in  law  and  equity;  Jackson  v.  Lowe,  1  Bing.,  9;  Bate- 
man  v.  Phillips,  15  East.,  172;  Laythoarp  v.  Bryant,  supra,  3 
Atk.,  503,  1  Vern.,  110.  According  to  the  view  we  take  of  the 
case,  it  is  not  necessary  to  decide  whether  the  letter  of  the  14th  oi 
February,  above  referred  to,  is  only  a  proposition  to  sell,  or  con- 
tains in  itself  the  contract,  or  is  evidence  of  a  contract  previously 
made;  for  in  either  view  the  plaintiff  was  required  to  execute  the 
two  notes  with  approved  security,  and  the  only  question  is,  whether 
he  did  execute  and  tender  them  to  the  defendant  in  time  to  perfect 
his  right  of  action. 

If  the  plaintiff  had  tendered  the  notes  on  the  Saturday  referred 
to,  or  any  day  during  that  week,  it  is  clear  that  the  defendant 
would  have  been  bound.  There  is  strong  ground  to  support  the 
position,  that  according  to  the  proper  construction  of  the  letter, 
the  plaintiff  was  required  to  deliver  the  two  notes  during  the  week, 
or  at  all  events,  to  zvrite  during  the  week,  and  fix  on  a  day — the 
purpose  being  not  to  let  the  matter  stand  open  and  leave  him 
unbound  longer  than  that  week.  It  would  seem  the  defendant 
wrote  this  letter  reciting  the  agreement  or  purpose  to  bind  him- 
self in  writing,  with  the  expectation  that  the  plaintiff  was  also 
to  bind  himself  during  that  week.  But  we  put  our  decision  on  a 
broader  ground.  The  plaintiff  was  certainly  required  to  deliver 
the  notes  within  a  reasonable  time,  and  we  think  a  delay  of  twenty 
days  was,  under  the  circumstances,  unreasonable,  and  consequently 
the  plaintiff  did  not,  by  his  tender  of  the  notes,  acquire  a  right 
of  action. 

What  is  a  reasonable  time  must,  in  all  cases,'  depend  upon  the 
circumstances.  The  nature  of  the  transaction  may  make  a  delay 
unreasonable,  which,  in  a  transaction  of  a  different  kind  would 
not  be  so.  According  to  the  law  merchant,  notice  of  the  dishonor 
of  a  bill  must  be  by  the  return  mail,  for  "promptness  is  the  life  of 
trade."  So,  if  one  offers  to  take  one  hundred  dollars  for  his  horse, 
the  proposition  must  be  accepted  at  the  time;  for  nothing  else 
appearing,  his  object  is  to  sell  at  that  time.  So,  the  question  may 
depend  upon  the  condition  of  the  parties.  If  one  is  bound,  and 
the  other  is  foot-loose,  the  time  must  be  short,  for  it  would  be  un- 
reasonable to  keep  the  parties  in  so  unequal  a  condition  for  a  long 
time  This  is  onr  case.  The  defendant  was  bound  in  writing, 
the  plaintiff  was  foot-loose.  Tf  a  storm  had  destroyed  the  trees, 
In-  was  not  bound  to  complete  the  trade,  even  after  his  conversa- 


STATUTE    OF    FRAUDS.  133 

tion  with  Webb,  and  it  was  unreasonable  to  delay  twenty  days,  and 
then  seek  to  get  the  advantage  of  an  appreciation  in  the  value  of 
the  timber,  or  of  the  fact,  that  it  was  worth  more  by  some  $200, 
at  the  time  of  the  contract,  than  the  owner  supposed. 

This  delay  was  the  more  unreasonable,  because  the  defendant 
earnestly  insisted  that  the  business  should  be  closed  on  the  next 
Saturday,  or  some  day  during  that  week,  which  ought  to  have 
quickened  the  plaintiff's  diligence. 

The  suggestion  that  the  delay  was  occasioned  by  the  sickness 
of  the  plaintiff's  wife,  and  the  freshet  in  the  river,  will  not  avail. 
Assuming  that  she  was  sick,  it  does  not  appear  how  that  made  it 
impossible  for  him  to  procure  the  notes.  As  to  the  river  being  up, 
that  did  not  prevent  the  defendant's  letter  of  the  22d  from  reach- 
ing its  destination,  and  the  plaintiff  could  have  crossed  in  the  same 
way.  Nor  did  it  prevent  him  from  crossing  to  make  the  tender. 
It  is  true,  he  went  a  round-about  way,  but  his  being  able  to  do  so 
repels  the  idea  of  an  impossibility. 

But  in  the  second  place,  it  is  familiar  learning  that  a  right,  de- 
pending upon  a  condition  precedent,  does  not  accrue  unless  the 
condition  be  performed,  although  performance  becomes  impossible 
by  the  act  of  God.  There  is  a  diversity  between  a  condition  sub- 
sequent by  which  an  estate  is  to  be  defeated,  and  a  condition 
precedent  by  which  an  estate  is  to  be  created,  or  a  right  is  to  ac- 
crue.    Co.  Litt.  "Conditions." 

The  defendant  agreed  to  convey  the  timber  to  the  plaintiff,  pro- 
vided he  executed  the  notes  in  a  reasonable  time.  The  principle 
is  the  same  as  if  the  condition  had  been  to  execute  the  notes  in 
ten  days.     Performance  is  necessary  to  give  a  right  of  action. 

Per  Curiam.  There  is  error.  Judgment  reversed,  and  a  venire 
de  novo. 

Growing  trees,  fructus  naturales,  are  a  part  of  the  realty.  Moring  v. 
Ward.  50—272;  Dunkart  v.  Rinehart,  89—354;  Carpenter  v.  Medford, 
99^95;  Mizzell  v.  Ruffin,  118—69;  Drake  v.  Howell.  133—162;  Hawkins 
v.  Lumber  Co.,  139 — 160;  Lumber  Co.  v.  Corey,  140 — 462;  Tremaine  v. 
Williams,  144 — 114.  The  distinction  made  in  some  courts,  that  if  the 
contract  is  made  in  immediate  contemplation  of  severance  of  the  timber 
the  statute  does  not  apply,  is  not  recognized  in  this  State.  Ives  v.  R. 
R.,  142—131;  Midyette  v.  Grubbs.  145—85.  (See  Clark  on  Cont.,  76  and 
note;  28  Am.  &  Eng.  Encyc,  541  and  note.)  But  where  the  owner 
agrees  to  cut  timber  on  his  land  and  deliver  it  to  the  purchaser,  when 
cut,  such  contract  is  valid.  Green  v.  R.  R.,  73 — 524;  Ives  v.  R.  R., 
142—131,  115  A.  S.  R.,  732,  9  Ann.  Cas.,  188;  Midyette  v.  Grubbs,  145—85; 
Burwell  v.  Chapman,  159—209;  Turner  v.  Planters'  Lumber  Co.,  92 
Miss.,  767,  46  So.,  399,  131  A.  S.  R.,  552;  Hirth  v.  Graham,  50  Ohio  St., 
57,  40  A.  S.  R.,  641,  19  L.  R.  A.,  721;  Hurley  v.  Hurley,  110  Va.,  31,  65  S. 
E.,  468,  18  Ann.  Cas.,  968;  it  does  not  apply  to  trees  severed  as  logs. 
Lumber  Co.  v.  Brown,  160—281. 


134  FORMATION    OF    CONTRACT. 

3.    Growing  crops. 

(56)  FLYNT,  Extr.,  v.  CONRAD, 

61  N.  C,  190,  93  A.  D,  588—1867. 

This  was  an  action  of  trover,  for  corn.  The  facts  were  that  the 
plaintiff's  testator,  on  the  23d  day  of  June,  1865,  executed  to  the 
defendant  a  deed  in  fee  for  a  tract  of  land  on  which  there  was  a 
growing  crop  of  corn.  Evidence  of  various  acts  and  admissions 
was  given  to  show  that  the  crop  had  been  reserved  by  the  vendor. 
The  defendant  was  shown  to  have  converted  it ;  and  a  demand  and 
refusal  were  also  shown. 

The  defendant's  counsel  asked  His  Honor  to  charge  that  the  corn 
and  everything  else  upon  the  land  passed  by  the  deed,  and  that 
parol  declarations  by  the  defendant  could  not  revoke  the  deed  or 
raise  any  inference  from  which  a  tenancy  at  will  could  be  set  up. 

His  Honor  charged  the  jury  that  a  deed  for  land  passed  every- 
thing upon  the  land  except  what  was  legally  reserved ;  that  a  grow- 
ing crop  of  corn  could  be  sold  by  parol  so  as  to  pass  the  title,  and 
could  also  be  reserved  by  parol ;  that  if  they  were  satisfied  that 
it  was  the  intention  of  the  parties  at  the  time  the  deed  was  exe- 
cuted, that  only  the  land  should  pass,  and  the  growing  crop  should 
belong  to  the  testator,  the  plaintiff  could  recover ;  that  the  conduct 
of  the  parties  afterwards  might  be  considered  as  evidence  of  such 
intention. 

There  was  a  verdict  and  judgment  for  the  plaintiff,  and  defend- 
ant appealed. 

Pearson,  C.  J.  We  concur  in  the  opinion  of  His  Honor  for  the 
reasons  given  by  him. 

Tt  is  said  by  the  court  in  Brittain  v.  McKay,  23  N.  C,  265; 
"The  law  makes  a  pointed  distinction  between  those  profits  which 
are  the  spontaneous  products  of  the  earth  or  its  permanent  fruits, 
and  the  corn  and  other  growth  of  the  earth  which  are  produced 
annually  by  labor  and  industry,  and  thence  are  called  fructus  in- 
dustriales.  The  latter  for  most  purposes  are  regarded  as  personal 
chattels.  Upon  the  death  of  the  owner  of  the  land  before  they 
are  gathered,  they  go  to  his  executor,  and  not  his  heir.  Upon  the 
termination  of  an  estate  of  uncertain  duration,  by  an  act  other 
than  that  of  the  lessee,  they  belong  to  him  as  personal  chattels,  and 
do  not  go  over  to  the  owner  of  the  soil.  They  are  liable  to  be 
seized  and  sold  under  execution  as  personal  chattels,  and  a  sale  of 
them  while  growing  is  not  a  sale  of  land  or  any  interest  in  or  con- 
cerning land,  under  the  statute  of  frauds,  but  a  sale  of  goods." 

Thus  it  is  seen  that  a  growing  crop  is  regarded  as  a  personal 


STATUTE    OF    FRAUDS.  135 

chattel.  The  statute  (Rev.  Code,  ch.  34,  sec.  21),  puts  them  on 
the  same  footing  in  another  very  important  particular,  and  still 
farther  lessens  the  difference  by  making  it  larceny  to  steal  any 
Indian  corn,  wheat,  etc.,  growing  in  a  field.  So  that  the  only 
difference  now  seems  to  be  that  the  one  never  was  attached  to  land 
or  has  been  severed,  whereas  the  other  is  not  severed ;  and  the  legal 
effect  of  this  is,  that  when  land  is  conveyed  the  presumption  is  the 
wheat,  for  instance,  that  has  been  cut  and  remains  shocked  in  the 
field,  does  not  pass  with  the  land,  whereas,  if  it  has  not  been  cut, 
the  presumption  is  that  it  does  pass  with  the  land;  but  the  pre- 
sumption in  either  case  may  be  rebutted  by  the  acts  and  declara- 
tions of  the  parties.  If  the  grantee  hauls  in  and  houses  the  wheat 
that  has  been  cut,  with  the  knowledge  and  without  objection  on  the 
part  of  the  grantor,  or  if  he  admits  that  it  was  to  belong  to  the 
grantee  according  to  their  agreement,  no  question  would  be  made 
as  to  its  being  his  property.  The  same  acts  and  declarations  in 
regard  to  wheat  growing  would  rebut  the  presumption  and  justify 
the  inference  that  according  to  their  agreement  it  was  to  remain 
the  property  of  the  grantor.  This  may  be  shown  by  parol  evi- 
dence, for  the  statute  of  frauds  does  not  apply  to  an  agreement 
concerning  a  growing  crop.  Nor  does  the  admission  of  parol  evi- 
dence violate  the  rule  that  a  deed  shall  not  be  added  to,  varied  or 
contradicted  by  such  evidence. 

In  the  former  case  the  parol  proof  that  according  to  the  contract 
of  sale  the  grantee  was  to  have  the  wheat  that  remained  shocked 
in  the  field,  does  not  add  to  the  deed,  for  its  purpose  and  effect 
was  only  to  execute  one  part  of  the  contract,  and  there  is  no  rea- 
son why  the  other  part  may  not  be  established  by  parol  proof ;  so, 
and  for  the  same  reason,  in  the  latter  case  parol  proof,  that  accord- 
ing to  the  agreement  the  grantee  was  not  to  have  the  growing  crop, 
does  not  contradict  the  deed.  It  would  be  strange  if  the  execution 
of  one  part  of  the  agreement,  in  the  only  way  in  which  it  can  be 
executed,  should  exclude  proof  and  defeat  the  other  part,  for  it 
must  be  borne  in  mind  that  the  deed  does  not  purport  to  set  out 
the  agreement. 

In  respect  to  fruit  on  trees  and  "not  fallen,"  there  is  a  diversity, 
for  trees  are  a  substantial  and  permanent  part  of  the  land,  and  a 
deed  passing  the  land  actually  passes  the  trees  as  part  thereof,  and 
does  not  simply  raise  a  presumption  that  it  was  the  intention  to 
pass  them;  hence,  if  there  be  a  parol  agreement  to  convey  land 
and  to  except  the  fruit  on  trees,  or  certain  timber  trees,  and  a  deed 
is  executed  which  does  not  except  the  fruit  or  trees,  that  part  of 
the  agreement  in  respect  to  them  is  defeated,  for  the  statute  of 
frauds  requires  it  to  be  in  writing;  and  even  if  the  agreement  be 
in  writing,  that  part  of  it  can  only  be  set  up  by  a  bill  in  equity  to 


136  FORMATION    OF    CONTRACT. 

reform  the  deed  on  the  ground  of  accident  or  mistake  in  the 
draftsman,  for  the  effect  of  the  deed  is  to  pass  the  land  and  every 
substantial  part  of  it. 

Our  conclusion,  that  a  growing  crop  differs  only  from  a  personal 
chattel  in  the  circumstance  of  not  being  severed  from  the  land, 
and  that  the  presumption  that  it  passes  with  the  land  is  very  slight, 
seems  to  be  in  accordance  with  the  statute.  Rev.  Code,  ch.  46, 
sec.  63.  By  the  common  law,  if  one  died  intestate  his  administra- 
tor took  the  growing  crop  as  a  part  of  the  personal  estate,  and  the 
heir  took  the  land  and  the  trees  and  fruit  on  them  as  part  thereof. 
If  he  made  a  will  the  devisee  took  the  crop  under  the  presumption 
that,  not  being  severed,  it  passed  with  the  land,  unless  there  was 
something  in  the  will  to  rebut  this  presumption,  in  which  case  the 
executor  took  the  crops.  The  statute  makes  the  presumption  the 
other  way,  to  wit,  that  the  crop  does  not  pass  with  the  land  to  the 
devisee,  but  passes  to  the  executor  as  a  personal  chattel,  unless  it 
appears  by  the  will  that  the  devisee  was  to  have  it. 

The  doctrine  that  where  there  is  a  parol  agreement,  one  part  of 
which  is  carried  into  effect  by  a  deed  or  other  writing,  that  does 
not  prevent  the  other  part  from  being  established  by  parol  evidence, 
has  been  adopted  and  acted  upon  by  our  courts  in  several  cases. 
Twidy  v.  Saunderson,  31  N.  C,  5.  A  hires  a  negro  to  B,  who  gives 
a  note  for  $130,  "being  for  hire  of  boy,  Evartson."  A  sued  B  for 
taking  the  boy  out  of  the  county,  and  offered  to  prove  by  parol  that 
it  was  a  part  of  the  agreement  that  the  boy  should  not  be  carried 
out  of  the  county :  Held,  that  the  evidence  was  properly  admitted, 
"for  the  note  is  not  a  memorial  of  the  entire  agreement,  but  is 
simply  execution  of  a  part."  Manning  v.  Jones,  44  N.  C,  368: 
A  made  a  parol  agreement  to  purchase  a  tract  of  land  of  B  at  an 
agreed  price.  B  agreed  further  that  he  would  put  certain  repairs 
on  the  premises.  B  delivered  a  deed  to  A.  The  repairs  not  being 
made,  A  brought  assumpsit,  and  offered  to  prove  the  agreement  by 
a  witness:  Held,  that  the  proof  ought  to  have  been  received,  the 
deed  being  an  execution  of  one  part  of  the  agreement,  the  other 
having  been  left  in  parol.  The  proof  offered  was  not  to  "add  to, 
alter  or  explain  the  deed." 

Daughtry  v.  Booth,  49  N.  C,  87,  presents  the  same  question: 
Held,  that  a  bond,  given  for  the  price  of  the  hire  of  a  slave  and 
containing  other  stipulations  as  to  his  treatment  and  management, 
did  not  exclude  parol  evidence  of  another  stipulation  in  the  agree- 
ment, to  wit,  that  the  slave  was  not  to  be  taken  out  of  the  county. 

There  is  no  error.  Judgment  affirmed. 

Growing  crops,  fructus  industriales,  not  within  the  statute.  Brittain  v. 
McKay.  23— 265;  Smith  v.  Tritt,  18—241;  State  v.  Crook,  132—1053;  Thig- 
pen  v.  Statcn,  104—40;  Walton  v.  Jordan,  65—170;  State  v.  Green,  100— 
419.      So    with    crude    turpentine    on    the    body    of    the    tree,   known    as 


STATUTE    OF    FRAUDS.  137 

"scrape,"  but  not  after  the  new  turpentine  is  mingled  with  it.  Lewis  v. 
McNatt,  65—63.  Bricks  made  from  the  soil  are  personalty.  Brown  v. 
Morris,  83 — 251.  Perennial  crops,  fructus  naturales,  come  within _  the 
statute*  and  the  difficulty  is  in  determining  to  which  class  the  articles 
belong.  Backenstoss  v.  Stahler,  33  Pa.  St.,  251,  75  A.  D.,  592;  Kirkeby 
v  Erickson,  90  Minn.,  299,  96  N.  W.,  705,  101  A.  S.  R.,  411;  Grabow  v. 
McCracken,  102  Pac,  84,  23  L.  R.  A.  (N.  S.),  1218;  Simmons  v.  Wilh- 
ford,  60  Fla.,  359,  53  So.,  452,  Ann.   Cas.,   1912   C,  735. 

4.  Partnership  agreements  as  to  land. 

(57)  MAGUIRE  v.  KIESEL, 

86   Conn.,  453,  85   Atl.,  689—1913. 

This  was  an  action  for  breach  of  an  oral  contract  with  respect 
to  land.  The  plaintiff  and  the  defendant  were  to  purchase  real 
estate  jointly,  construct  a  building  thereon,  and  share  equally  in 
the  profits  to  be  derived  from  dealing  in  such  property.  The 
defendant  purchased  the  property,  took  title  in  his  own  name,  and 
refused  to  allow  the  plaintiff  to  have  any  interest  in  the  proceeds. 
Judgment  for  plaintiff,  and  defendant  appealed.  Affirmed. 

Prentice,  J.  .  .  .  The  agreement  was  not  within  the  operation  of 
the  statute.     The  statute  "contemplates  only  a  transfer  of  lands 
or  some  interest  therein."     Bostwick  v.  Leach,  3  Day,  476,  484; 
Hall  v.  Solomon,  61  Conn.,  476,  483,  23  Atl.,  876,  29  Am.  St.  Rep., 
218.     The  subject-matter  of  the  agreement  was  not  land  or  any 
interest  therein.      It   was   a    fund   of   money   representing   profits 
from  a  joint  enterprise  in  the  nature  of  a  partnership.     Bunnel  v. 
Taintor,  4  Conn.,  568,  573.     This  enterprise,  to  be  sure,  was  one 
which  contemplated  and  involved  a  real  estate  transaction,  and  the 
fund  to  be  divided  was  to  be  derived  from  that  source.     But  that 
touching  which  the  agreement  was  made,  and  in  which  by  reason 
of  the  agreement  the  plaintiff  claims  an  interest,  was  the  fund. 
Bunnel  v.  Taintor,  supra,  presented  a  situation  strikingly  similar  in 
its  details  to  the  present,  and  having  the  same  essential  features, 
and  we  there  held  that  the  contract  was  not  within  the  statute.  4 
Conn.,  586,  573.     The  overwhelming  weight  of  authority  in  other 
jurisdictions  is  to  the  same  effect,  that  an  agreement  for  a  joint 
enterprise  in  the  nature  of  a  copartnership  which  has  for  its  pur- 
pose the  purchase,  improvement,  and  sale  of   real  estate   for  the 
profit  arising  therefrom  to  be  divided  among  the  joint  undertakers 
as  among  partners,  and  which  does  not  undertake  to  operate  upon 
the  ownership  of  or  title  to  the  realty  or  anything  annexed  thereto 
as  a  part  or  parcel  of  it  and  transferable  alone  by  deed,  is  not 
within  the  statute.     Dale  v.  Hamilton,   5   Hare,  382;  Chester  v. 
Dickerson,  54  N.  Y.,  L  8,  13  Am.  Rep.,  550;  Bates  v.  Babcock,  95 
Cal ,  479,  484,  30  Pac,  605,  16  L.  R.  A.,  745,  29  Am.  St.  Rep., 


138  FORMATION    OF    CONTRACT. 

133;  Eaton  v.  Graham,  104  111.  App.,  296;  Bruce  v.  Hastings,  41 
Vt.,  380,  98  Am.  Dec,  592 ;  Richards  v.  Grinnell,  63  Iowa,  44,  54, 
18  N.  W.,  668,  50  Am.  Rep.,  727 ;  Fountain  v.  Menard,  53  Minn., 
443,  445,  55  N.  W.,  601,  39  Am.  St.  Rep.,  617;  Jones  v.  Davies, 
60  Kans.,  309,  314,  56  Pac,  484,  72  Am.  St.  Rep.,  354;  Dudley 
v.  Littlefield,  21  Me.,  418,  422 ;  Howell  v.  Kelly,  149  Pa.,  473,  475, 
24  Atl,  224.  .  .  . 
No  error. 

The   statute  does  not  apply — 

To  an  agreement  to  pay  for  services  in  selling  land.  Lamb  v.  Baxter, 
130 — 67;  Abbott  v.  Hunt,  129 — 403.  To  a  promise  to  pay  for  deficiency  in 
the  number  of  acres  in  a  tract  of  land.  Sherrill  v.  Hagan,  92 — 345; 
McGee  v.  Craven,  106 — 351;  Currie  v.  Hawkins,  118 — 593.  Where  A  sold 
land  to  B  with  a  parol  agreement  that  B  was  to  pay  him  one-half 
that  he  might  receive  for  the  sale  of  the  mineral  interest.  Michael  v. 
Foil,  100—178;  or  to  pay  him  a  part  of  the  proceeds  of  the  resale  of 
the  land.  Massey  v.  Holland.  25—197;  Sprague  v.  Bond.  108—382; 
Bourne  v.  Sherrill,  143 — 381.  Where  A  promises  to  pay  B  $100  if  he 
will  buy  C's  land.  Little  v.  McCarter,  89 — 233.  Where  several  persons 
agree  to  buy  land  at  a  judicial  sale  and  one  of  them  bids  it  off.  Trice 
v.  Pratt,  21 — 626.  To  the  transfer  of  a  docketed  judgment  which  is  a 
lien  on  land.  Winberry  v.  Koonce.  83 — 351:  post,  196.  To  a  mere 
license  as  distinguished  from  an  easement.  R.  R.  v.  Battle,  66 — 540; 
Kivett  v.  McKeithan,  90—106;  Bridger  v.  Purcell,  18—492.  To  an 
agreement  to  pay  for  improvements  on  land  when  the  contract  is 
rescinded.  Houston  v.  Sledge,  101 — 640;  or  an  agreement  by  the  vendor 
to  make  certain  improvements  which  are  not  mentioned  in  the  deed. 
Manning  v.  Jones,  44 — 368.  An  agreement  between  A  and  B  as  partners, 
that  B  is  to  buy  land  from  C,  on  which  the  firm  is  to  build  a  mill,  and 
after  paying-  for  the  land  and  all  expenses,  to  share  equally  in  the  profits. 
Falkner  v.  Hunt,  73 — 571:  Brown  v.  Hobbs,  147 — 73;  Brogden  v.  Gibson, 
165—16;  Tohnson  v.  Hogan,  158  Mich.,  635,  123  N.  W.,  891.  37  L.  R.  A. 
(N.  S.),  889;  Henderson  v.  Henri,  68  W.  Va.,  562,  71  S.  E.,  172,  34! 
L.  R.  A.  (N.  S.),  629.  Ann.  Cas.,  1912  B,  318;  but  an  oral  agreement  to 
receive  a  certain  number  of  acres  of  land  for  selling  is  invalid.  Fair- 
cloth  v.  Kenlaw,  165—228. 

Parol  trusts. — Since  section  7  of  the  English  Statute  of  Frauds  has 
not  been  adopted  in  this  State,  a  trust  in  land  may  be  created  by  parol  if 
declared  before  or  at  the  time  of  the  sale  or  transfer,  but  not  afterwards. 
Pittman  v.  Pittman.  107—159;  Cobb  v.  Edwards,  117—244;  Hamilton  v. 
Buchanan,  112—463;  McNair  v.  Pope,  100—404;  Mulholland  v.  York,  82— 
510;  Shields  v.  Whitaker,  82—516;  Tankard  v.  Tankard,  84—286;  McLeod 
v.  Rullard.  84 — 515:  Cheek  v.  Watson.  85—195:  Gidnev  v.  Moore,  86— 
484;  Smiley  v.  Pearce,  98—185;  Gorrell  v.  Alspaugh,  120—362;  Blount  v. 
Washington.  108—230:  Cloninger  v.  Summit.  55—513;  Cousins  v.  Wall, 
56-^3;  Shelton  v.  Shelton.  58—292;  Rigsrs  v.  Swan,  59—118:  Whitfield  v. 
Gate^.  50—136;  Hargrave  v.  King,  40—430;  Thompson  v.  Newlin.  38— 
338:  Gaylord  v.  Gaylord,  150—227;  Anderson  v.  Harrington,  163—140; 
Jones  v.  Jones,   164 — 320;   Brogden  v.   Gibson,   165 — 16. 

Discharge  in  pais. — While  a  writing  is  necessary  to  make  a  valid  con- 
tract to  convey  land,  it  may  be  discharged  in  pais,  but  there  must  be 
more  than  a  mere  oral  agreement,  it  must  be  acted  on  by  the  parties. 
Faw  v.  Whittington,  72—321;  Miller  v.  Pierce.  104—389;  Gordon  v.  Col- 
lrtt.  102—532;  Hemmings  v.  Doss.  125 — 400:  Holder  v.  Purefov,  108— 
163:  Joyner  v.  Stancill.  108—153:  Taylor  v.  Tavlor,  112—27;  Riley  v. 
Jordan,  75—180:  McDougald  v.  Graham.  75—310;  Falls  v.  Carpenter, 
21—237;  Fortune  v.  Watkins,  94—304;  Gorrell  v.  Alspaugh.  120—362; 
Bank  v.   Bank,  77—186:   Herron  v.  Rich,  95—500:   Lewis  v.   Gay,   151— 


STATUTE    OF    FRAUDS.  139 

168;  Cutright  v.  Union  Sav.  Dev.  &  Invest.  Co.,  33  Utah,  486,  14  Ann. 
Cas.,  725;  Richardson  v.  Johnson,  41  Wis.,  100,  22  A.  R.,  712. 

See,  generally,  Statute  of  Frauds,  Cent.  Dig.,  sees.  84-118;  Dec.  Dig., 
63-72. 

Sec.  4.     Contracts  in  consideration  of  marriage. 

(58)  DUNN  v.  THARP, 

39  N.  C,  7—1845. 

The  plaintiff  and  her  husband  made  an  oral  agreement  as  to  the 
settlement  of  certain  property  upon  her,  in  consideration  of  the 
marriage,  and  this  agreement  was  not  carried  out ;  she  asks  to  have 
the  settlement  corrected  to  include  the  property. 

Gaston,  J.    The  specific  execution  of  marriage  articles,  and  the 
reformation   of    settlements   executed   after   marriage,   because   of 
their  not  conforming  to  articles  entered  into  before  marriage,  are 
among  the  ordinary  subjects  of  equity  jurisdiction.     Parol  agree- 
ments in  consideration  of  marriage  are  within  the  statute  of  29th 
Charles  2d,   and,  therefore,   in  the   English   courts,  they  are  not 
executed,  nor  do  they  constitute  a  ground  for  correcting  settle- 
ments actually  made.  But  for  that  statute,  such  agreements,  clearly 
established,  would  have  the  same  claims  to  be  enforced,  as  if  they 
had  been  manifested  by  writing.     The  reason  of  this  provision  in 
the  statute  was   to   prevent   those  unguarded   expressions   of   gal- 
lantry and  improvident  promises  thoughtlessly  made,   or  artfully 
procured  during  courtship,  being  perverted  into  deliberate  and  sol- 
emn engagements,  conferring  a  right  to  compel  performance.  When 
the  alleged  agreement  in  this  case  was  made,  we  had  no  statute 
denying  efficacy  to  it,  unless  reduced  to  writing.     The  only  differ- 
ence, therefore,  which  we  can  regard  as  existing  between  such  an 
agreement  by  parol,  and  one  in  writing,  is  a  difference  in  the  de- 
gree of  proof  necessary  to  establish  it.  As  an  agreement,  peculiarly 
liable  to   misapprehension   and  misrepresentation,   it   calls   for  the 
greatest  caution  in  the  consideration  of  the  evidence,  by  which  it 
is   sought   to   be   made   out.      In   the   present   cause,   the   extrinsic 
proofs  are  as  full,  clear,  and  satisfactory  as  could  have  been  de- 
sired, and  the  instrument  itself   furnishes  no  slight  testimony  of 
the  alleged  mistake,  for  after  conveying  to  the  trustees  seven  ne- 
groes, by  name,  it  proceeds  to  declare  the  trusts  with  respect  to 
"the  nine  negroes  aforesaid."     ... 

The  court  is  of  opinion  that  she  is  entitled  to  have  the  mistake 
in  the  settlement  corrected,  as  prayed  for  in  her  bill. 

This  section  not  being  in  force  in  N.  C,  such  contracts  may  be  oral 
unless  they  come  within  some  other  section,  as  for  land,  etc.  Mont- 
gomery v   Henderson,  56—113.    For  the  protection  of  creditors,  marriage 


140  FORMATION    OF    CONTRACT. 

settlements  are  required  to  be  registered,  which  of  course  requires  a 
writing.  Rev.  963,  964,  985;  Credle  v.  Carrawan,  64—422;  Brinkley  v. 
Brinkley,  128 — 503.  In  many  States  this  section  has  been  adopted; 
but  it  does  not  apply  to  mutual  promises  to  marry,  but  to  agreements 
respecting  property  rights  based  upon  the  consideration  of  marriage. 
Frazer  v.  Andrews,  134  Iowa,  621,  112  N.  W.,  92,  11  L.  R.  A.  (N.  S.), 
593;  St.  of  Frds.,  Cent.  Dig.,  sees.  1-6;  Dec.  Dig.,  sees.  1-6. 

Sec.  5.     Contracts  not  to  be  performed  within  a  year. 

(59)  ARK.  MID.  R.  R.  v.  WHITLEY, 

54   Ark.,    199,    15    S.   W.,   465,    11    L.    R.    A.,   621—1891. 

Battle,  J.  This  was  an  action  for  damages  that  were  caused 
by  a  breach  of  a  verbal  agreement  entered  into  by  appellant  and 
appellees  in  1872,  that  appellee  (Whitley)  would  permit  appellant 
to  build  its  railroad  across  his  land,  and  that  appellant  would,  in 
consideration  thereof,  construct,  keep  and  maintain  good  and  suffi- 
cattle-guards  across  its  road  on  each  side  of  appellee's  land  to 
prevent  stock  running  at  large  from  trespassing  on  his  fields.  In 
pursuance  of  this  agreement,  the  road  was  built  over  the  land,  but 
good  and  sufficient  cattle-guards  were  not  kept  and  maintained. 
Appellant  insists  that  the  action  can  not  be  maintained  because  the 
agreement  comes  within  the  statute  of  frauds,  .  .  .  because  it 
was  not  to  be  performed  within  one  year  after  it  was  made.    .    .    . 

In  determining  when  contracts  come  within  the  one  year  statute 
of  frauds,  courts  have  been  governed  by  the  words  "not  to  be 
performed."  They  have  treated  them  as  negative  words.  In  con- 
struing them  it  is  said:  "It  is  not  sufficient  to  bring  a  case  within 
the  statute  that  the  parties  did  not  contemplate  the  performance 
within  a  year,  but  there  must  be  a  negation  of  the  right  to  per- 
form it  within  the  year."  According  to  this  rule  of  construction, 
it  is  well  settled  that  the  statute  only  includes  those  contracts  or 
agreements  which,  according  to  a  fair  and  reasonable  interpretation 
of  their  terms,  in  the  light  of  all  the  circumstances  which  enter 
into  their  construction,  do  not  admit  of  the  performance  in  accord- 
ance with  their  language  and  intention,  within  a  year  from  the 
time  they  were  made,  and  that  it  includes  no  agreement  if,  con- 
sistently with  its  terms,  it  may  be  performed  within  that  time. 
Accordingly,  it  is  also  well  settled  that  agreements  which  contain 
no  stipulation  as  to  time,  but  depend  for  performance,  either  ex- 
pressly or  by  reasonable  implication,  upon  the  happening  of  a 
certain  contingency  which  may  occur  within  the  year,  do  not  come 
within  the  statute ;  as,  for  instance,  promises  to  pay  money  on  the 
day  of  the  promisor's  marriage,  on  the  death  of  a  third  party,  or 
during  the  promisee's  life;  to  educate  a  child,  are  not  within  the 
statute;  "and  so,  of  course,  whatever  else  be  the  contingency,  pro- 


STATUTE    OF    FRAUDS.  141 

vided  it  may  happen  within  a  year."  Roberts  v.  Rockbottom  Co., 
7  Met.,  46;  Lyon  v.  King,  11  Met.,  411;  Foster  v.  McO'Blenis, 
18  Mo.,  88 ;  .  .  .  Peters  v.  Westborough,  19  Pick.,  364 ;  .  .  . 
Russell  v.  Slade,  12  Conn.,  460 ;  .  .  .  Jilson  v.  Gilbert,  26  Wis., 
637 ;  Meyer  v.  Roberts,  46  Ark.,  84 ;  Erowne,  Stat.  Fr.,  sees.  273- 
283,  and  cases  cited;  Peter  v.  Compton,  1  Smith  L.  C,  619-623, 
and  cases  cited.  In  this  case  the  duration  of  appellant's  promise 
.  .  .  is  limited  by  the  time  it  should  maintain  and  operate  its 
road  over  appellee's  land.  .  .  .  As  its  performance  depended 
on  an  implied  contingency  which  might  have  occurred  within  one 
year  after  it  was  made,  it  does  not  come  within  the  statute  of 
frauds.  Affirmed. 

This  provision  is  not  in  the  N.  C.  statute.  See  further,  Chase  v. 
Hinckley,  126  Wis.,  751,  105  N.  W.,  230,  110  A.  S.  R.,  896,  2  L.  R.  A. 
(N.  S.),  738. 

Sec.  6.     Sale  of  goods,  wares  and  merchandise. 

(60)   GODDARD  v.  BINNEY, 
115    Mass.,   450,    15    A.    R.,    112—1874. 

Action  to  recover  the  price  of  a  buggy  built  by  the  plaintiff  for 
the  defendant.  The  price  was  $675,  and  the  work  was  to  be  done 
in  four  months.  The  buggy  was  finished,  the  defendant  failed  to 
take  it  away  promptly,  and  it  was  destroyed  by  fire.  Judgment 
for  defendant,  and  plaintiff  appealed.  Reversed. 

Ames,  J.  Whether  an  agreement  like  that  described  in  this  re- 
port should  be  considered  as  a  contract  for  the  sale  of  goods, 
within  the  meaning  of  the  statute  of  frauds,  or  a  contract  for 
labor,  services  and  materials,  and  therefore  not  within  that  statute, 
is  a  question  upon  which  there  is  a  conflict  of  authority.  Accord- 
ing to  a  long  course  of  decisions  in  New  York,  and  in  some  other 
States  of  the  Union,  an  agreement  for  the  sale  of  any  commodity 
not  in  existence  at  the  time,  but  which  the  vendor  is  to  manufac- 
ture or  put  in  a  condition  to  be  delivered  (such  as  flour  from 
wheat  not  yet  ground,  or  nails  to  be  made  from  iron  in  the  ven- 
dor's hands),  is  not  a  contract  of  sale  within  the  meaning  of  the 
statute.  Crookshank  v.  Burrell,  18  Johns.,  58;  Sewall  v.  Fitch,  8 
Cow.,  215;  Robertson  v.  Vaughn,  5  Sandf.,  1;  Downs  v.  Ross,  23 
Wend.,  270;  Eichelberger  v.  McCauley,  5  Har.  &  J.,  213.  In  Eng- 
land, on  the  other  hand,  the  tendency  of  the  recent  decisions  is  to 
treat  all  contracts  of  such  a  kind  intended  to  result  in  a  sale,  as 
substantially  contracts  for  the  sale  of  chattels ;  and  the  decision  in 
Lee  v.  Griffin,  1  B.  &  S.,  272,  goes  so  far  as  to  hold  that  a  con- 
tract to  make  and  fit  a  set  of  artificial  teeth  for  a  patient  is  essen- 


142  FORMATION    OF    CONTRACT. 

tially  a  contract  for  the  sale  of  goods,  and  therefore  subject  to  the 
provisions  of  the  statute.  See  Maberley  v.  Sheppard,  10  Bing., 
99 ;  Howe  v.  Palmer,  3  B.  &  Aid.,  321 ;  Baldey  v.  Parker,  2  B.  & 
C,  37;  Atkinson  v.  Bell,  8  id.,  277. 

In  this  Commonwealth,  a  rule  avoiding  both  of  these  extremes 
was  established  in  Mixer  v.  Howarth,  21  Pick.,  205,  and  has  been 
recognized  and  affirmed  in  repeated  decisions  of  more  recent  date. 
The  effect  of  these  decisions  we  understand  to  be  this,  namely, 
that  a  contract  for  the  sale  of  articles  then  existing,  or  such  as 
the  vendor  in  the  ordinary  course  of  his  business  manufactures 
or  procures  for  the  general  market,  whether  on  hand  at  the  time 
or  not,  is  a  contract  for  the  sale  of  goods,  to  which  the  statute 
applies.  But  on  the  other  hand,  if  the  goods  are  to  be  manufac- 
tured especially  for  the  purchaser,  and  upon  his  special  order,  and 
not  for  the  general  market,  the  case  is  not  within  the  statute. 
Spencer  v.  Cone,  1  Mete,  283.  "The  distinction,"  says  Chief  Jus- 
tice Shaw,  in  Lamb  v.  Crafts,  12  Mete,  353,  "we  believe  is  now 
well  understood.  When  a  person  stipulates  for  the  future  sale  of 
articles,  which  he  is  habitually  making,  and  which,  at  the  time, 
are  not  made  or  finished,  it  is  essentially  a  contract  of  sale,  and 
not  a  contract  for  labor ;  otherwise,  when  the  article  is  made  pur- 
suant to  the  agreement."  In  Gardner  v.  Joy,  9  Mete,  177,  a  con- 
tract to  buy  a  certain  number  of  boxes  of  candles  at  a  fixed  rate 
per  pound,  which  the  vendor  said  he  would  manufacture  and  de- 
liver in  about  three  months,  was  held  to  be  a  contract  of  sale  and 
within  the  statute.  To  the  same  general  effect  are  Waterman  v. 
Meigs,  4  Cush.,  497,  and  Clark  v.  Nichols,  107  Mass.,  547.  It  is 
true  that  in  "the  infinitely  various  shades  of  different  contracts" 
there  is  some  practical  difficulty  in  disposing  of  the  questions  that 
arise  under  that  section  of  the  statute.  Gen.  Stat.,  ch.  105,  par.  5. 
But  we  see  no  ground  for  holding  that  there  is  any  uncertainty  in 
the  rule  itself.  On  the  contrary,  its  correctness  and  justice  are 
clearly  implied  or  expressly  affirmed  in  all  of  our  decisions  upon 
the  subject-matter.  It  is  proper  to  say  also  that  the  present  case 
is  a  stronger  one  than  Mixer  v.  Howarth.  In  this  case,  the  car- 
riage was  not  only  built  for  the  defendant,  but  in  conformity  in 
some  respects  with  his  directions,  and  at  his  request  was  marked 
with  his  initials.  It  was  neither  intended  nor  adapted  for  the  gen- 
eral market.  As  we  are  by  no  means  prepared  to  overrule  the 
decision  in  that  case,  we  must  therefore  hold  that  the  statute  of 
frauds  does  not  apply  to  the  contract  which  the  plaintiff  is  seeking 
to  i-n  force  in  tbis  action.     .     .     . 

Franklin  v.  Matoa  Gold  Mining  Co.,  158  Fed.,  941,  16  L.  R.  A.  (N.  S.), 
381,  14  Ann  Cas.,  302;  Gics'  Fstatc.  160  Mich.,  502.  125  N.  W..  420,  19 
Ann.  Cas.,  1288.  This  section  has  not  heen  adopted  in  N.  C.  Hurlbut 
v.    Simpson,    25 — 233.      "Earnest    money"    was    something   paid    to    hind 


STATUTE    OF    FRAUDS.  143 

the  trade,  and  not  necessarily  a  part  of  the  purchase  money.     Davis  v. 
Martin,    146—281. 

Sec.  7.     Requisites  of  the  writing. 

(61)   McCONNELL  v.  BRILLHART, 

17  111.,  354,  65  A.   D.,  661—1856. 

Bill  for  specific  performance  of  contract  to  convey  land,  and  the 
defendant  pleaded  the  statute  of  frauds.  The  evidence  consisted 
of  two  letters,  which  the  defendant  contended  were  insufficient  to 
make  the  contract.     Decree  for  plaintiff,  and  defendant  appealed. 

Affirmed. 

"I 
Scates,  C.  J.     The  leading  principle  that  governs  the  case  is 

one  requiring  contracts,  or  notes  or  memorandums  of  the  contract, 
to  be  in  writing,  and  signed  by  the  party  to  be  charged  therewith, 
or  by  someone  by  him  thereunto  lawfully  authorized  under  our 
statute  of  frauds  and  perjuries,  which  is  a  copy  of  the  English 
statute.  Cases  have  been  excepted  out  of  the  statute  where  parol 
contracts  have  been  in  part  performed  by  payments,  possession, 
and  improvements,  but  I  do  not  propose  to  examine  or  discuss  this 

class. 

Of  cases  within  the  statute,  courts  have  been  called  upon  to  dis- 
cuss every  clause  of  it,  and  apply  it  to  every  variety  of  circum- 
stances and  facts ;  in  ascertaining  what  sort  of  writing  is  sufficient, 
what  it  shall  express,  and  show  upon  its  face,  parties,  description 
of  the  property,  terms,  conditions,  and  price,  who  shall  sign  it — 
principal  and  agent — what  will  constitute  an  agency,  what  is  a 
sufficient  signing,  etc. 

1.  There  is  no  form  of  language  necessary;  anything  from 
which  the  intention  may  be  gathered,  as  in  other  contracts,  will 
be  sufficient. 

2.  Any  kind  of  writing,  from  a  solemn  deed  down  to  mere 
hasty  notes  or  memoranda  in  books,  papers,  or  letters,  will  suf- 
fice: Doty  v.  Wilder,  15  111.,  407,  60  A.  D.,  756;  Anderson  v. 
Harold,  10  Ohio,  402;  Ide  v.  Stanton,  15  Vt,  685,  40  A.  D.,  698; 
Parkhurst  v.  VanCortlandt,  1  Johns,  Ch.  273 ;  Mactier  v.  Frith,  6 
Wend.,  103,  21  A.  D.,  262.     (Other  citations  omitted.) 

3.  The  writings,  notes,  or  memoranda  shall  contain  on  their 
face,  or  by  reference  to  others  that  are  traceable,  the  names  of 
the  parties,  vendor  and  vendee,  a  sufficiently  clear  and  explicit  de- 
scription of  the  thing,  interest,  or  property,  as  will  be  capable  of 
identification  and  separation  from  other  of  like  kind,  together  with 
the  terms,  conditions,  and  price  to  be  paid,  or  other  consideration 
to  be  given:     Barry  v.  Coombe,  1  Pet.,  647,  650;  Abeel  v.  Rad- 


144  FORMATION    OF    CONTRACT. 

cliff,  13  Johns.,  296,  7  A.  D.,  377  \  Bean  v.  Burbank,  16  Me.,  458, 
33  A.  D.  681.     (Other  citations  omitted.) 

4.  The  party  to  be  charged,  or  vendor  of  land,  etc.,  or  his  law- 
fully authorized  agent,  shall  sign  it. 

5.  A  verbal  or  parol  agency  is  sufficient  for  this  purpose:  Doty 
v.  Wilder,  supra;  Johnson  v.  Dodge,  17  111.,  433.  (Other  cita- 
tions omitted.) 

6.  The  signing  will  be  sufficient  in  the  caption,  or  body  of  the 
memorandum,  or  by  a  subscription  to  it:  Anderson  v.  Harold, 
supra;  Barry  v.  Coombe,  supra. 

7.  The  contract  or  obligation  must  be  signed  with  intent  to 
enter  into  it,  must  be  mutual,  reciprocal,  and  upon  good  or  valid 
consideration:  Dorsey  v.  Packwood,  12  How.,  134;  Anderson  v. 
Harold,  supra;  Utica,  etc.,  R.  R.  Co.  v.  Brinckerhoff,  21  Wend., 
139,  34  A.  D.,  220;  Mactier  v.  Frith,  supra. 

Contracts  within  the  statute  of  frauds  are  no  more  subject  to 
change  or  alteration,  or  proof  of  their  contents,  etc.,  than  other 
written  contracts.  Yet  mistakes  may  be  corrected :  Pugh  v.  Ches- 
seldine,  11  Ohio,  109.  And  the  same  degree  of  certainty  required 
in  other  written  contracts  will  be  sufficient  in  contracts  under  the 
statute  of  frauds ;  Id  certum  est,  quod  certum  reddi  potest,  is  a 
maxim  equally  applicable  to  both.     .     .     . 

Testing  the  contract  presented  in  these  letters  by  the  principles 
laid  down,  and  we  find  nothing  wanting  to  show  a  valid  contract 
within  the  statute  of  frauds.     .     .     .  Affirmed. 

(62)  HALL  v.  MISENHEIMER, 

137  N.  C,  183,  49  S.  E.,  104,  107  A.  S.  R.,  474—1904. 

This  was  a  civil  action  by  the  vendor  against  the  vendee  to  re- 
cover the  price  agreed  to  be  paid  for  land. 

The  plaintiff  testified  that  he  agreed  to  sell  the  land  to  defendant 
for  $1,200,  and  defendant  agreed  to  buy  at  that  price.  That  after- 
wards defendant  presented  a  paper  to  him,  saying,  "The  price  is 
very  high,  but  I  will  take  the  land;  here  is  a  receipt  that  I  have 
prepared,  you  sign  it  now  and  T  will  pay  you  five  dollars."  The 
plaintiff  signed  the  paper,  which  was  as  follows: 

"Salisbury,  N.  C,  January  18,  1904. 
"Received    from   M,   J.   Misenheimer  five   dollars,   part  payment 
on  one  five-room  house  and  lot,  extending  across  Tar  Branch,  on 
Boundary  street.  No.  house,  630. 

"(Signed)  T-  A.  Hall. 

"Witness:     M.  D.  Lefler." 

This  receipl   was  written   fur  the  defendant  and  at  his  dictation. 


STATUTE    OF    FRAUDS.  145 

The  defendant  took  possession  of  the  lot,  and  afterwards  refused 
to  pay  the  purchase  money,  though  plaintiff  tendered  him  a  deed 
on  January  21,  as  defendant  had  requested.  Defendant  alleged 
that  he  was  to  have  until  January  20  to  decide  whether  he  would 
take  the  land,  and  he  had  notified  the  plaintiff  that  he  would  not 
take  it.  At  the  close  of  the  evidence  the  court  sustained  a  motion 
for  nonsuit,  and  the  plaintiff  appealed. 

Walker,  J.    The  argument  in  this  court  proceeded  mainly  upon 
the  question   whether  there  had  been  a   sufficient   signing  of   the 
receipt,  under  the  statute  of  frauds,  to  bind  the  defendant.    Upon 
this  point  our  opinion  is  with  the  plaintiff.     It  has  been  held  in 
England,   whose   statute    (29   Charles    II)    has   been   substantially 
copied  by  us,  that  if  the  name  of  the  party  to  be  charged  appears 
in  the  memorandum,  so  as  to  be  applicable  to  the  whole  substance 
of  the  writing,  and  was  written  by  the  party,  or  by  his  authorized 
agent,  it  is  immaterial  where  in  the  instrument  the  name  happens 
to  be  placed,  whether  at  the  top  or  at  the  bottom,  or  whether  it  is 
merely  mentioned  in  the  body  of  the  memorandum,  the  statute  not 
requiring  that  the  name  should  be  subscribed.     Evans  v.   Hoare, 
1    Q.   B.    (1892),   593.     The  principle,  as  thus   stated,   has   been 
adopted  by  Clark  in  his  work  on  Contracts  (2  Ed.),  p.  89,  and  he 
cites  numerous  cases  to  sustain  it.    To  those  he  cites  may  be  added 
Higdon  v.  Thomas,   12  Md.,   139.     We  think  the  same  rule  has 
been  approved  by  this  court  in  Plummer  v.  Owens,  45  N.  C,  254, 
in  which  case  it  appeared  that  the  names  of  the  vendor  and  the 
vendee   were   written  at   the   top   of   the   memorandum,   the   latter 
being  in  the  form  of  an  account.     The  court  held  that  the  memo- 
randum would  have  been  sufficient  in  other  respects  if  the  descrip- 
tion of  the  land  had  been  more  specific.    See  also  Clason  v.  Bailey, 
14  Johnson,  484,  and  other  cases  cited  in  Clark  on  Contracts    (2 
Ed.),  p.  89,  note  110.     In  our  case  the  name  of  the  vendee  was 
inserted  in  the  paper  by  his  own  direction,  and  it  can  not  be  ques- 
tioned that  he  fully  intended  thereby  to  bind  himself  by  the  receipt 
as  evidence  of  a  contract  to  buy  the  land,  so  far  as  a  signing  of 
the  writing  was  necessary  for  that  purpose.     Cherry  v.  Long,  61 
N.  C,  466,  seems  to  be  directly  in  point.     It  was  not  contended 
that  the  defendant  was  not  bound  by  what  his  agent  did  in  writing 
the    receipt,    though    the    latter's    authority    was    given    by    parol. 
Neaves  v.  Mining  Co.,  90  N.  C.  412,  47  Am.  Rep.,  529. 

But  we  think  there  is  a  serious  obstacle  in  the  way  of  plaintiff's 
recovery.  The  statute  expressly  requires  a  contract  to  sell  land, 
or  some  note  or  memorandum  thereof,  to  be  put  in  writing  and 
signed  by  the  party  to  be  charged  therewith  or  by  his  lawfully 
authorized  agent.  The  Code,  sec.  1554.  In  order,  therefore,  to 
charge  a  party  upon  such  a  contract,  it  must  appear  that  there  is 


146  FORMATION    OF    CONTRACT. 

a  writing  containing  expressly  or  by  implication  all  the  material 
terms  of  the  alleged  agreement,  which  has  been  signed  by  the  party 
to  be  charged,  or  by  his  agent  lawfully  authorized  thereto.  Gwath- 
ney  v.  Cason,  74  N.  C,  5,  21  Am.  Rep.,  481,  especially  at  page 
10,  where  Rodman,  J .,  states  the  rule.  Miller  v.  Irvin,  18  N.  C, 
104;  Mizell  v.  Burnett,  49  N.  C,  249,  69  Am.  Dec,  744;  Rice 
v.  Carter,  33  N.  C,  298;  Neaves  v.  Mining  Co.,  90  N.  C,  412; 
Mayer  v.  Adrian,  77  N.  C,  83.  Many  other  cases  could  be  cited 
from  our  Reports  in  support  of  the  rule,  but  those  we  have  already 
mentioned  will  suffice  to  show  what  is  the  principle  and  how  it  has 
been  applied.  In  commenting  on  the  policy  of  the  statute,  so  far 
as  it  affects  the  vendee,  and  answering  a  suggestion  that  the  statute 
applies  only  to  the  vendor,  who  alone  conveys  the  land  or  any  in- 
terest therein,  Ruffin,  C.  J.,  for  the  court,  in  Simms  v.  Killian, 
34  N.  C,  252,  says :  "The  danger  seems  as  great  that  a  purchase 
at  an  exorbitant  price  may  by  perjury  be  imposed  on  one  who  did 
not  contract  for  it,  as  that  by  similar  means  a  feigned  contract  of 
sale  should  be  established  against  the  owner  of  the  land.  Hence 
the  act  in  terms  avoids  entirely  every  contract,  of  which  the  sale 
of  land  is  the  subject,  in  respect  of  a  party,  that  is,  either  party 
who  does  not  charge  himself  by  his  signature  to  it  after  it  has 
been  reduced  to  writing."  So,  in  a  case  where  a  stipulation  that  the 
vendee  would  open  a  street,  which  constituted  a  part  of  the  price  to 
be  paid  for  the  land,  was  not  stated  in  writing,  it  was  held  by  this 
court  that  the  vendor  could  not  recover  for  a  breach  of  the  stipula- 
tion, because,  being  a  part  of  the  price,  it  was  also  a  part  of  the 
agreement,  and  was  not  evidenced  by  a  writing  which  had  been 
signed  by  the  defendant.  Hall  v.  Fisher,  126  N.  C,  205  ;  Ide  v. 
Stanton,  15  Vt.,  685,  40  Am.  Dec,  698.  The  fact  that  the  de- 
fendant in  this  case  paid  five  dollars  on  the  purchase-money  and 
took  possession  of  the  land  does  not  change  the  result.  The  doc- 
trine of  part  performance  is  not  now  recognized  by  this  court. 

The  party  to  be  charged  upon  a  contract,  within  the  meaning  of 
the  statute  is  the  defendant  in  the  action,  or  the  party  against 
whom  it  is  sought  to  enforce  the  obligation  of  the  contract.  It  is 
not  the  vendor,  unless  he  occupies  upon  the  record  the  position  of 
the  party  who  is  called  upon  to  perform  his  contract.  "The  object 
of  the  statute  was  to  secure  the  defendant."  Pearson,  J.,  in  Rice 
v.  Carter.  33  N.  C,  298.  See  also  Mizell  v.  Burnett,  49  N.  C, 
249.  60  Am.  Dec,  744;  Love  v.  Welch,  97  N.  C,  299;  Green  v. 
R.  R.,  77  X.  C.  95;  Love  v.  Atkinson,  131  N.  C,  544.  Any- 
thing said  in  Taylor  v.  Russell,  119  N.  C,  30,  in  conflict  with  this 
view  of  the  statute  can  not,  we  think,  be  sustained.  Green  v.  R. 
K..  supra,  which  is  cited  in  Taylor  v.  Russell,  does  not  support  the 
proposition   that  the  vendee  is  not  protected  by  the  statute.     In 


STATUTE    OF    FRAUDS.  147 

that  case  the  plaintiff,  who  was  the  vendee,  sued  the  defendant, 
who  was  the  vendor,  to  recover  the  value  of  the  wood  which  he 
agreed  to  give  for  the  land  at  a  stipulated  price.  The  court  held 
merely  that  as  the  plaintiff  had  sued  on  the  contract  and  the  de- 
fendant had  waived  that  statute  he  was  bound  by  its  terms  and 
must  recover,  if  at  all,  not  the  value  of  the  wood,  but  the  price 
agreed  upon.  He  could  not  in  such  a  case  repudiate  his  contract, 
when  the  defendant  was  willing  to  perform  it.  In  support  of  this 
ruling,  the  court  cited  Mizell  v.  Burnett,  supra,  which  case  directly 
sustains  the  doctrine  as  we  have  stated  it.  The  defendant,  there- 
fore, can  avail  himself  of  the  statute  as  the  party  to  be  charged. 

This  court  has  held,  it  is  true,  that  the  consideration  of  the  con- 
tract need  not  be  stated.  Miller  v.  Irvine,  18  N.  C,  104;  Ash- 
ford  v.  Robinson,  30  N.  C,  114;  Thornburg  v.  Hasten,  88  N.  C, 
293 ;  but  in  each  of  those  cases  the  vendor  was  the  defendant  and 
the  party  to  be  charged.  There  is  quite  a  difference  between  the 
price  to  be  paid  by  the  vendee  and  the  consideration  necessary  to 
support  the  contract  and  enforce  it  against  the  vendor.  The  latter 
can  be  shown  by  parol,  as  at  common  law,  and  the  writing,  as  said 
by  Ruffin,  C.  J .,  in  Miller  v.  Irvine,  supra,  need  not  contain  any 
matters  but  such  as  charge  him,  the  vendor,  that  is,  such  stipula- 
tions as  are  to  be  performed  on  his  part.  He  is  to  convey  and  the 
writing  must  be  sufficient  to  show  that  this  duty  rests  upon  him  as 
one  of  the  parties  to  the  contract  when  he  is  sought  to  be  charged. 
The  vendee  is  to  pay  a  certain  price,  and  the  writing  must  likewise 
show  his  obligation — its  nature  and  extent — when  the  action  is 
against  him.  Clark  on  Contracts  (2  Ed.),  pp.  85,  86  and  87;  Wil- 
liams v.  Morris,  96  U.  S.,  444.  It  must  show  the  price,  for,  other- 
wise, the  true  contract  of  the  vendee  as  to  one  of  its  essential 
terms  would  not  be  reduced  to  writing,  and  we  could  not  see  from 
the  writing  what  it  is  so  as  to  enforce  it  against  him.  It  we  per- 
mitted the  vendor  to  supply  this  defect  by  parol  proof,  it  would  at 
once  introduce  all  the  mischiefs  which  the  statute  was  intended 
to  prevent.     Simms  v.  Killian,  supra;  Williams  v.  Morris,  supra. 

The  receipt  in  this  case  does  not  show  the  price.  How  then  can 
the  court  be  informed  as  to  what  the  price  is,  unless  it  admits 
parol  testimony  to  prove  the  fact?  To  do  so  would  be  in  direct 
violation  of  the  statute — its  letter  and  its  spirit. 

The  judgment  of  nonsuit  was  properly  granted  in  the  court 
below.  No  error. 

Parties. — The  writing-  must  show  the  parties  to  the  agreement.  Kent 
v.  Edmondston,  49 — 529;  Mayer  v.  Adrian,  77 — 83;  Cherry  v.  Long,  61 
— 466;  Woodcock  v.  Merrimon,  122—731;  Haskell  v.  Tukesbury,  92  Me., 
551,  69  A.  S.  R.,  529;  Mentz  v.  Newwitter,  122  N.  Y.,  491,  25  N.  E.,  1004, 
11  L.  R.  A.,  97;  Frahm  v.  Metcalf.  75  Neb.,  241,  106  N.  W.,  227,  13  Ann. 
Cas.,  312. 


148  FORMATION    OF    CONTRACT. 

Terms. — The  writing  must  show  all  the  material  terms  of  the  agree- 
ment. Mayer  v.  Adrian,  77 — 83;  Cherry  v.  Long,  61 — 466;  Gwathney  v. 
Cason,  74 — 5;  Phillips  v.  Hooker,  62—193;  Plummer  v.  Owens,  45—254; 
Mallory  v.  Mallory,  45 — 80;  Hall  v.  Fisher,  126 — 205;  Dickerson  v.  Sim- 
mons, 141 — 325;  Neaves  v.  Mining  Co.,  90 — 412;  McGee  v.  Blankenship, 
92—563;  Gordon  v.  Collett,  102—532;  Wellman  v.  Horn,  157—170;  Wil- 
liams v.  Morris,  95  U.  S.,  444;  Ullsperger  v.  Meyer,  217  111.,  262,  75 
N.  E.,  482,  2  L.  R.  A.  (N.  S.),  221,  3  Ann.  Cas.,  1032. 

Subject-matter. — This  should  be  described  sufficiently  to  be  identified, 
and  this  does  not  exclude  parol  evidence  to  "fit  the  description  to 
the  thing.*'  Murdock  v.  Anderson,  57 — 77;  Farmer  v.  Batts,  83 — 387; 
Breaid  v.  Munger,  88 — 297;  Fortescue  v.  Crawford,  105 — 29;  Lowe  v. 
Harris,  112 — 472;  Farthing  v.  Rochelle,  131 — 563;  Bateman  v.  Hopkins, 
157 — 470;  Flegel  v.  Dowling,  54  Ore.,  40,  102  Pac,  178,  135  A.  S.  R.,  812, 
19  Ann.  Cas.,  1159;  Cunha  v.  Callery,  29  R.  I.,  230,  132  A.  S.  R.,  811,  69 
Atl.,  1001,  18  L.  R.  A.  (N.  S.),  811. 

Consideration  need  not  be  stated  in  the  writing.  See  cases  cited  in  the 
principal  case,  and  also  Green  v.  Thornton,  49 — 230;  Neaves  v.  Mining 
Co.,  90—412;  Tunstall  v.  Cobb,  109—316;  Hargrove  v.  Adcock,  111— 
166.  Contra,  see  Clark  Cont.,  pp.  86,  87,  and  note;  29  Am.  &  Eng.  Encyc, 
868  and  note,  which  seems  to  be  the  rule  in  England  and  most  of  the 
States;  Bateman  v.  Hopkins,  157 — 470;  Saunders  v.  Bank,  112  Va.,  443, 
71  S.  E.,  714,  Ann.  Cas.,  1913  B.  982;  Wain  v.  Warlters,  5  East,  10,  b 
E.  R.  C,  231;  Zimmerman  v.  Zehendner,  164  Ind.,  466,  73  N.  E.,  920,  3 
Ann.  Cas.,  655;  Siemers  v.  Siemers,  65  Minn.,  104,  67  N.  W.,  802,  60 
A.  S.  R.,  430. 

Several  papers. — If  more  than  one  writing,  they  must  be  connected 
physically  or  by  internal  evidence,  so  that  there  can  be  no  uncertainty 
as  to  their  meaning;  the  connection  can  not  be  shown  by  parol.  Mayer 
v.  Adrian,  77 — 83;  Dowdy  v.  White,  128 — 17;  Dickerson  v.  Simmons,  141 
—325;  Gordon  v.  Collett,  102—532;  Tunstall  v.  Cobb,  109—316;  Mfg. 
Co.  v.  Hendricks.  106 — 485;  Fortescue  v.  Crawford,  105 — 29;  Cunha  v. 
Callery,  29  R.  I.,  230,  69  Atl.,  1001,  132  A.  S.  R,  811,  18  L.  R.  A.  (N.  S.), 
616;   Halsell  v.   Renfrow,   14  Okla.,  674,  2  Ann.   Cas.,  286. 

Signed. — By  the  party  to  be  charged  therewith.  Rice  v.  Carter,  33 — 
298;  Green  v.  R.  R.,  77—95;  Wade  v.  New  Bern,  77—460;  Davison  v.  Land 
Co.,  126—704;  Love  v.  Atkinson,  131—544;  Lumber  Co.  v.  Corey,  140— 
462;  Neaves  v.  Mining  Co.,  90—412;  Love  v.  Welch,  97—200;  Improve- 
ment Co.  v.  Guthrie,  116—381;  Taylor  v.  Russell,  119—30;  Gudger  v. 
Fletcher.  29—372;  Plummer  v.  Owens,  45—254;  Brown  v.  Hobbs,  154 
—544;  Wellman  v.  Horn,  157—170:  Burriss  v.  Starr,  165—657;  Flowe 
v.  Hartwick,  167 — 448;  Harper  v.  Goldschmidt,  156  Cal.,  245.  104  Pac, 
451,  134  A.  S.  R.,  124,  28  L.  R.  A.  (N.  S.),  689.  In  the  sale  of  land 
it  has  been  held  in  some  cases  that  the  vendor  is  the  party  to  be  charged, 
and  that  he  must  sign  the  writing  though  the  vendee  does  not.  See 
cases  above  cited,  and  Murray  v.  Crawford,  138  Ky.,  25,  127  S.  W.,  494, 
L.  I\.  A.  (N.  S.),  680,  and  note.  It  may  be  signed  anywhere  in  the 
instrument,  and  may  be  by  pencil  or  any  way  indicating  the  intention, 
and  may  be  after  the  contract  is  made.  It  may  be  by  agent,  whose  au- 
thority need  not  be  in  writing-.  Oliver  v.  Dix,  21—158;  Phillips  v. 
Hooker,  62—193;  Washburn  v.  Washburn,  39—306;  Neaves  v.  Mining  Co., 
412:  I.aml.  v.  Baxter,  130—67;  Abbott  v.  Hunt,  129^03;  Sm'ith  v. 
Brown,  132—365:  Blacknall  v.  Parish,  59—70:  Love  v.  Harris.  156—88, 
3'.  L  R.  A.  (N.  S.),  ^27;  Burriss  v.  Starr,  165—656;  Wellman  v.  Horn, 
—170:  Walker  v.  TTafcr.  170  Fed.,  37,  24  L.  R.  A.  (N.  S.),  315;  Bran- 
Pritchett,  126  Ga.,  286,  55  S.  E.,  241,  7  Ann.  Cas..  1093.  Auction- 
the  agent  of  tl  ler  and  buyer  to  sign  such  writing  as  will  bind 

the  parties.  Cherry  v.  Long,  61 — 466;  Mayer  v.  Adrian,  77—83:  Gwath- 
ney  v.  C  ason.  74—5;  Proctor  v.  Finley,  119—536:  it  seems  that  this 
should  >.<•  fh,ne  at  the  time  of  the  transaction.  Dickerson  v.  Simmons, 
15;  Love  v.  Harris,  156—88,  36  L.  R.  A.  (N.  S.),  927,  Ann. 
Cas.   1912  D,   inr,o. 


STATUTE    OF    FRAUDS.  149 

Seal  is  not  necessary.  Simmons  v.  Spruill,  56 — 9;  Mitchell  v  Brideer 
113—63;  Worrall  v.  Munn,  5  N.  Y.,  229,  55  A.  D.,  330. 

Registration  is  not  necessary  between  the  parties  in  the  case  of  land, 
but  is  necessary  to  protect  against  the  claims  of  third  persons,  as  cred- 
itors and  purchasers  for  value.  Edwards  v.  Thompson,  71 — 177-  Mauney 
v.  Crowell,  84—314;  White  v.  Holley,  91—67;  Hargrove  v.  Ad'cock  111 
—166;   Wood  v.  Tinsley,   138—507. 

Delivery  is  not  necessary.  McGhee  v.  Blankenship,  95—563;  Flowe  v 
Hartwick,  167 — 448;  Charlton  v.  Col.  Real  Est.  Co.,  67  N.  J.  Eq  629  3 
Ann.  Cas.,  402.  J       4'        ' 

Sec.  8.    Effect  of  noncompliance  with  the  statute. 

(63)  ALBEA  v.  GRIFFIN  et  al., 
22  N.  C,  9—1838. 

This  was  a  bill  for  the  specific  execution  of  a  contract  for  the 
sale  of  a  tract  of  land  containing  fifty  acres.  The  defense  was  the 
Act  of  1819  avoiding  parol  contracts  for  the  sale  of  land  and 
slaves. 

Upon  the  hearing  the  case  was,  that  the  ancestor  of  defendants 
contracted  to  convey  the  land  to  the  plaintiff  for  $50,  to  be  taken 
up  in  goods  at  the  store  of  the  plaintiff;  that  the  goods  were  in 
part  delivered;  that  the  land  was  surveyed,  and  the  plaintiff  put 
in  possession  of  it  by  the  vendor;  that  he,  the  plaintiff,  built  a 
house  upon  it,  and  that  the  vendor  gave  him  the  assistance  in 
raising  it,  which  is  usual  between  neighbors  in  the  country.  The 
vendor  died  without  executing  a  deed  for  the  land,  and  it  de- 
scended to  the  defendants. 

Gaston,  J.  It  is  objected  on  the  part  of  the  defendants,  that 
by  our  Act  of  1819  all  parol  contracts  to  convey  land  are  void,  and 
that  no  part  performance  can,  in  this  State,  take  a  parol  contract 
out  of  the  operation  of  the  statute.  We  admit  this  objection  to  be 
well  founded,  and  we  hold  as  a  consequence  from  it  that  the  con- 
tract being  void,  not  only  its  specific  performance  can  not  be  en- 
forced, but  that  no  action  will  lie  at  law  or  in  equity  for  damages 
because  of  nonperformance.  But  we  are  nevertheless  of  opinion 
that  the  plaintiff  has  an  equity  which  entitles  him  to  relief,  and 
that  parol  evidence  is  admissible  for  the  purpose  of  showing  that 
equity.  The  plaintiff's  labor  and  money  have  been  expended  on 
improving  property  which  the  ancestor  of  defendants  encouraged 
him  to  expect  should  become  his  own,  and  by  the  act  of  God,  or 
by  the  caprice  of  the  defendants,  this  expectation  has  been  frus- 
trated. The  consequence  is  a  loss  to  him  and  a  gain  to  them.  It 
is  against  conscience  that  they  should  be  enriched  by  gains  thus 
acquired  to  his  injury.  (Baker  and  Wife  v.  Carson,  1  Dev.  &  Bat. 
Eq.,  381.)  If  they  repudiate  the  contract,  which  they  have  a  right 
to  do,  they  must  not  take  the  improved  property  from  the  plaintiff 


150  FORMATION    OF    CONTRACT. 

without  compensation  for  the  additional  value  which  these  im- 
provements have  conferred  upon  the  property. 

The  court  therefore  directs  that  it  be  referred  to  the  clerk  of 
this  court,  to  inquire  and  report  what  is  the  additional  value  con- 
ferred on  the  land  in  question  by  the  improvements  of  the  plain- 
tiff, and  that  he  state  an  account  between  the  parties,  charging  the 
plaintiff  with  a  fair  rent  since  the  death  of  Andrew  Griffin,  and 
crediting  him  with  what  has  been  advanced  towards  payment  for 
said  land,  and  with  the  amount  of  the  additional  value  so  con- 
ferred upon  it. 

Per  Curiam.  Decree  accordingly. 

(64)   LUTON  v.  BADHAM, 
127  N.  C,  96,  37  S.  E.,  143,  S3  L.  R.  A.,  337—1900. 

This  was  a  civil  action,  the  facts  being  given  in  the  opinion. 
From  a  judgment  of  nonsuit,  the  plaintiff  appealed. 

FurchES,  J.     The  plaintiff  is  the  administratrix  of   Alexander 
Badham,  her  former  husband,  and  the  defendant  is  the  father  of 
her   intestate.      The   plaintiff   alleges   that   the   defendant   was   the 
owner  of  a  vacant  lot  in  the  town  of  Edenton,  and  upon  the  mar- 
riage of  her  intestate  the  defendant  proposed  to  him  that,  if  he 
would  build  upon  and  improve  said  vacant  lot,  it  should  be  his ; 
that  he  would  make  him  a  fee  simple  title  to  it;  that  upon  this 
agreement   her   intestate    entered    upon    said   lot,    and   greatly    im- 
proved   the    same,    by    erecting    a    dwelling    and    other    outhouses 
thereon,  which  improvements  greatly  enhanced  the  value  of   said 
lot,  to  the  amount  of  $400;  that  her  husband,  the  intestate,  lived 
on  said  lot  in  the  dwelling-house  he  had  built  with  the  plaintiff, 
his  wife,  from  1892  until  1897,  when  he  died,  leaving  the  plaintiff 
and  two  children,  the  result  of  their  marriage;  that  plaintiff  con- 
tinued to  occupy  said  house  and  premises  for  some  time  after  the 
death  of  her  intestate,  when  she  surrendered  the  possession  to  the 
defendant  upon  his  request,  and  upon  his  promise  to  give  her  a 
part  of  the  rent  for  the  benefit  of  her  said  children,  but  that  since 
the  defendant  has  gotten  possession  of  said  property  he  refuses  to 
pay  her  any  part  of  the  rent,  and  refuses  to  convey  said  land  to  her 
children  ;  that  said  contract  and  agreement  between  her  intestate 
and  defendant  was  never  reduced  to  writing,  her  intestate  having 
full  confidence  in  the  defendant,  and  believing  that  he  would  keep 
his  said  promise,  and  convey  him  the  lot;  that  said  contract  and 
agreement  being  in  parol  only,  and  the  defendant  refusing  to  carry 
nut   the  agreemenl  and  to  convey  said  property,  the  plaintiff  asks 
thai   lie  may  he  decreed  to  account  and  pay  for  the  valuable  and 
permanent   improvements  her  intestate  put  upon  said  lot. 


STATUTE    OF    FRAUDS.  151 

The  defendant  answers,  and  admits  that  the  plaintiff's  intestate 
was  his  son;  that  he  went  upon  said  lot  and  occupied  the  same 
with  his  family  until  his  death ;  and  that  he  built  some  small  house 
for  his  use  while  there,  but  not  the  dwelling-house,  which  defend- 
ant alleges  he  built;  but  he  denies  that  there  was  any  agreement 
between  him  and  plaintiff's  intestate  that,  if  he  would  go  upon  said 
lot  and  improve  it,  he  would  convey  said  lot  to  the  plaintiff's  in- 
testate, and  denies  that  he  said  anything  to  said  intestate  to  induce 
him  to  improve  said  lot,  with  the  expectation  that  he  would  convey 
the  same  to  him ;  that,  as  the  intestate  was  his  son,  he  simply  per- 
mitted him  to  occupy  said  lot  without  rent,  and  defendant  admits 
a  demand  for  title,  and  for  an  account  and  settlement  for  im- 
provements, and  that  he  has  refused  the  same,  but  he  did  not  for- 
mally plead  the  statute  of  frauds. 

Upon  the  trial,  the  court  formulated  issues  as  to  whether  there 
was  a  parol  contract  or  agreement  between  defendant  and  intes- 
tate that,  if  intestate  would  improve  said  lot,  the  defendant  would 
make  him  a  title  to  it,  and,  if  there  was,  did  plaintiff's  intestate, 
in  pursuance  of  said  agreement,  enter  upon  said  lot  and  place 
valuable  permanent  improvements  thereon.  Upon  these  issues  the 
plaintiff  introduced  witnesses  and  asked  them  if  they  ever  heard 
the  deiendant  say  how  it  was  and  under  what  circumstances  the 
plaintiff's  intestate  entered  upon,  improved,  and  occupied  said  lot; 
stating  that  the  purpose  of  asking  these  questions  was  to  prove  that 
there  was  such  a  parol  contract  between  the  defendant  and  intes- 
tate as  that  alleged  in  the  complaint.  The  defendant  objected, 
objection  sustained,  and  the  witness  was  not  allowed  to  answer. 
Plaintiff  thereupon  submitted  to  a  judgment  of  nonsuit,  and  ap- 
pealed. This  is  the  case,  and  the  only  question  presented  for  our 
consideration  is  as  to  the  competency  of  this  evidence. 

It  would  seem  that  Sain  v.  Dulin,  59  N.  C,  195,  and  Dunn  v. 
Moore,  38  N.  C,  364,  cited  by  the  defendant,  sustain  the  ruling  of 
the  court.  But  the  question  has  been  before  the  court  a  great 
number  of  times,  and  we  must  admit  that  the  opinions  do  not 
appear  to  be  always  in  harmony.  A  parol  contract  for  the  sale 
of  land  is  not  a  void  contract,  but  voidable,  upon  denial  or  a  plea 
of  the  statute  of  frauds.  Thomas  v.  Kyles,  54  N.  C,  302;  Gulley 
v.  Macy,  84  N.  C,  434.  But  when  the  alleged  contract  is  denied, 
or  the  statute  of  frauds  pleaded,  this  avoids  the  contract,  because 
the  party  alleging  it  is  not  allowed  to  show  by  parol  evidence  what 
the  contract  was.  The  English  rule  seems  to  have  been  that  the 
statute  of  frauds  must  be  pleaded,  or  the  party  would  be  allowed 
to  proceed  with  parol  evidence  to  establish  the  contract.  But  our 
courts  have  extended  the  rule  so  as  to  include  a  denial  of  the  con- 
tract as  well  as  by  pleading  the  statute  of  frauds.    Gulley  v.  Macy, 


152  FORMATION    OF    CONTRACT. 

supra,  and  many  other  cases.  Whether  it  would  not  have  been 
better  that  we  had  followed  the  English  rule  is  not  now  an  open 
question,  as  the  rule  seems  to  be  firmly  established  the  other  way 
in  this  State. 

But  the  plaintiff  contends  that  she  is  not  claiming  the  right  to 
establish — to  set  up — a  parol  contract ;  that  she  is  not  asking  a  spe- 
cific performance,  nor  is  she  asking  damages  for  the  breach  of  a 
parol  contract;  that  her  contention  is  that,  by  reason  of  the  con- 
tract or  agreement  between  her  intestate  and  the  defendant,  the 
intestate  was  induced  to  enter  upon  the  defendant's  land,  and  place 
permanent  and  valuable  improvements  on  the  same;  and  that  this 
is  a  new  cause  of  action,  collateral  to  the  contract,  based  upon  a 
new  consideration  given  by  equity  to  prevent  fraud.  If  the  plain- 
tiff is  entitled  to  maintain  this  action  against  the  defendant,  it  is 
purely  upon  equitable  principles.  Before  the  junction  of  the  juris- 
diction of  law  and  equity  in  the  same  court,  a  bargainee,  in  a  parol 
contract  for  the  sale  of  land  where  the  contract  was  repudiated  by 
the  bargainor,  could  not  have  relief  against  the  bargainor  in  a 
court  of  equity,  if  legal  demands  alone  were  involved.  If  the  bar- 
gainee had  paid  the  purchase  price,  or  a  part  of  it,  in  money  or 
specific  personal  property,  he  had  a  right  of  action  at  law  to  re- 
cover the  same  back.  And  a  court  of  equity  would  not  aid  him, 
unless  there  was  something  else  connected  with  the  transaction 
that  gave  him  an  equity.  Then  the  court  of  equity,  having  ac- 
quired jurisdiction  of  the  matter,  would  proceed  to  investigate  and 
settle  legal  as  well  as  equitable  demands.  Chambers  v.  Massey, 
42  N.  C,  286.  But  no  such  question  as  this  can  arise  now,  as  the 
same  courts  have  both  jurisdictions,  and  administer  both  law  and 
equity. 

If  the  plaintiff's  intestate  entered  upon  the  defendant's  land 
under  a  parol  contract,  and  placed  valuable  and  permanent  im- 
provements thereon,  and  the  defendant,  after  such  improvements 
were  made,  repudiates  the  contract,  and  refuses  to  convey,  the 
plaintiff  has  an  equitable  cause  of  action.  Ellis  v.  Ellis,  16  N.  C, 
345;  Albea  v.  Griffin,  22  N.  C,  9;  Lyon  v.  Crissman,  Ibid.,  268; 
Pitt  v.  Moore,  99  N.  C,  85 ;  Tucker  v.  Markland,  101  N.  C,  422 ; 
Chambers  v.  Massey,  42  N.  C,  286;  Thomas  v.  Kyles,  54  N.  C, 
302;  Love  v.  Nelson,  54  N.  C,  339,  and  many  other  cases.  The 
court  says  in  many  of  these  cases  that  it  would  be  against  equity 
and  good  conscience  to  allow  the  bargainor  to  repudiate  his  con- 
tract, and  thereby  reap  the  benefit  of  the  bargainee's  money  and 
labor. 

But  it  is  contended  by  the  defendant  that,  if  this  is  so,  the  de- 
fendant is  protected  from  any  liability  to  account  for  the  reason 
that  he  had  denied  the  contract,  and  the  law  will  not  allow  the 


STATUTE    OF    FRAUDS.  153 

plaintiff  to  prove  it.  And  this  is  admitted  to  be  true,  so  far  as 
establishing  the  contract  for  the  purpose  of  enforcing  a  specific 
performance,  or  the  recovery  of  damages  for  the  breach  thereof. 
But  can  not  the  plaintiff  prove  there  was  a  contract  under  which 
her  intestate  was  induced  to  enter  and  put  valuable  improvements 
on  the  land?  If  she  can  not,  the  fraud  upon  which  the  plaintiff's 
action  is  based  is  protected  by  the  simple  answer  of  the  defendant. 
This,  it  seems  to  us,  can  not  be  and  is  not  the  law  in  this  State. 
In  Albea  v.  Griffin,  supra,  which  seems  to  be  regarded  as  the  lead- 
ing case,  it  does  not  distinctly  appear  that  the  defendant  denied 
the  contract,  and  if  he  did  not,  certainly  no  stress  is  put  upon  that 
fact  by  the  learned  Judge  who  wrote  the  opinion.  The  opinion  in 
Albea  v.  Griffin  was  written  by  Judge  Gaston  at  June  Term,  1838, 
and  at  June  Term,  1839,  he  wrote  the  opinion  in  the  case  of  Lyon 
v.  Crissman,  22  N.  C,  268,  in  which  he  uses  this  language:  "If 
the  objection  be  that  the  agreement  is  void,  because  not  reduced  to 
writing,  and  this  objection  could  avail  anything,  it  should  have 
been  set  up  in  the  pleadings.  But  this  has  not  been  done.  The 
plaintiff  avers  one  agreement,  and  the  defendant  sets  up  another, 
and  the  parties  have  left  to  proof  which  representation  is  the  true 
one."  Ellis  v.  Ellis,  16  N.  C,  245,  was  an  action  for  specific 
performance  of  a  parol  contract  for  the  sale  of  land,  and  alternate 
relief  was  demanded  for  betterments.  The  answer  denied  the 
contract,  and  the  court  held  that  it  could  not  be  specifically  en- 
forced, but  allowed  evidence,  and  ordered  an  account  as  to  rents 
and  profits  and  for  betterments.  In  Pitt  v.  Moore,  99  N.  C,  85, 
which  was  an  action  on  a  parol  contract  for  betterments,  where 
the  defendant  did  not  admit  the  contract  as  alleged,  and  set  up  a 
different  contract  or  state  of  facts  to  those  alleged  by  the  plaintiff 
(and  this  was  an  action  by  the  personal  representative),  and  the 
plaintiff  was  allowed  to  prove  the  agreement,  and  the  court  granted 
the  relief  prayed  for  and  ordered  an  account  to  be  taken,  in  the 
opinion  of  the  court  the  following  language  is  used :  "Whatever 
may  have  been  the  ancient  rule,  it  is  now  well  settled  by  many 
decisions,  from  Baker  v.  Carson,  16  N.  C,  381,  in  which  there  was 
a  divided  court,  but  Ruffin,  C.  /.,  and  Gaston,  /.,  concurring,  and 
Albea  v.  Griffin,  22  N.  C.,  9,  by  a  unanimous  court,  to  Hedgepeth 
v.  Rose,  95  N.  C,  41,  that  where  the  labor  or  money  of  a  person 
has  been  expended  in  the  permanent  improvement  and  enrichment 
of  the  propertv  of  another  by  parol  contract  or  agreement,  which 
can  not  be  enforced  because,  and  only  because,  it  is  not  in  writing, 
the  party  repudiating  the  contract,  as  he  may  do,  will  not  be  al- 
lowed to  take  and  hold  the  property  thus  improved  and  enriched, 
without  compensation  for  the  additional  value  which  these  im- 
provements have  conferred  upon  the  property,  and  rests  upon  the 


154  FORMATION    OF    CONTRACT. 

broad  principle  that  it  is  against  conscience  that  one  man  shall  be 
enriched  to  the  injury  and  cost  of  another,  induced  by  his  own 
acts.  This  was  an  action  by  the  personal  representative.  Tucker 
v.  Markland,  101  N.  C,  422,  is  to  the  same  effect  as  Pitt  v.  Moore, 
where  plaintiffs  brought  an  action  for  possession  of  land,  and  de- 
fendants answered,  setting  up  a  parol  contract  of  purchase  by 
their  ancestor,  alleging  permanent  improvements,  and  asking  pay- 
ment for  the  same.  The  plaintiffs  replied,  denying  the  contract 
and  defendant's  right  to  have  pay  for  improvements.  But  the 
court  allowed  evidence  to  be  introduced  to  establish  the  parol  con- 
tract, which  the  jury  found  to  have  been  made  by  defendants'  an- 
cestor, and  the  court  ordered  a  reference  as  to  rents  and  profits 
and  improvements,  and  this  court  affirmed  the  judgment.  Thomas 
v.  Kyles,  54  N.  C,  302,  is  a  case  where  the  plaintiff  alleged  that 
his  intestate  made  a  parol  contract  with  the  defendant  for  the 
purchase  of  land,  entered  upon  and  took  possession  thereof,  and 
put  valuable  improvements  on  the  same.  The  defendant  answered, 
denying  the  contract.  But  the  plaintiff  was  allowed  to  prove  the 
contract  by  parol  evidence,  and,  while  the  court  refused  to  compel 
a  specific  performance,  the  plaintiff's  claim  for  betterments  was 
allowed.  Other  cases  might  be  cited  as  authority  for  the  admis- 
sion of  parol  evidence,  to  show  that  the  party  entered  and  placed 
valuable  improvements  on  land  under  a  parol  contract  or  promise 
to  convey,  but  we  do  not  deem  it  necessary  to  do  so.  It  seems  to 
be  settled  by  this  court  that  it  may  be  done ;  and  the  cases  cited 
show  that  where  a  party  is  induced  to  go  upon  land,  and  put 
valuable  improvements  thereon,  by  the  owner  thereof,  upon  a  parol 
promise  to  convey  the  same  to  the  party  putting  the  improvements 
on  the  land,  and  the  owner  afterwards  refuses  to  convey,  it  is  held 
by  this  court  to  be  a  fraud  upon  the  party  so  induced,  and  the 
court  will  compel  him  to  pay  for  such  improvements. 

It  was  also  contended  for  the  defendant  that  the  right  to  have 
pay  for  improvements  only  exists  while  the  bargainee  is  in  posses- 
sion, and  Albea  v.  Griffin  and  Pass  v.  Brooks,  125  N.  C,  129, 
were  cited  as  authority  for  this  position.  But  neither  of  these  cases, 
nor  any  other  case  that  has  been  called  to  our  attention,  supports 
this  contention.  In  these  cases  and  other  like  cases,  the  bargainee 
being  in  possession,  the  court  said  that  such  bargainee  should  not 
be  turned  out  until  the  bargainor  paid  for  the  improvements.  This 
was  only  a  means  resorted  to  by  the  court  to  enforce  the  bar- 
gainee's recovery,  and  not  as  the  ground  of  the  plaintiff's  equity, 
which  was  made  distinctly  to  rest  upon  the  fraud  of  the  bargainor; 
and  it  would  be  just  as  fraudulent  and  unconscionable  for  the  bar- 
gainor to  take  profit  by  means  of  such  fraud,  if  the  bargainee  was 
out  of  possession,  as  if  he  was  still  in  possession.     It  is  the  fraud 


STATUTE    OF    FRAUDS.  155 

that  gives  the  right  of  action,  and  not  the  possession.  But  the 
cases  of  Tucker  v.  Markland,  Pitt  v.  Moore,  Thomas  v.  Kyles, 
supra,  and  other  cases,  seem  to  settle  this  contention  against  the 
defendant.  It  is  true  that  it  is  said  in  Pass  v.  Brooks  that  the 
contract  is  admitted,  and,  defendants  being  in  possession,  the  case 
of  Albea  v.  Griffin  was  followed  as  to  the  judgment;  and  the 
statement  that  the  contract  was  admitted  is  only  a  statement  of 
the  facts  of  the  case.  There  is  nothing  in  the  case  of  Pass  v. 
Brooks  that  conflicts  with  what  is  said  in  this  opinion.  The  doc- 
trines announced  in  this  case,  or  many  of  them,  are  held  in  the 
recent  case  of  North  v.  Bunn,  122  N.  C,  766,  in  which  case  it  is 
held  that  the  bargainee  was  entitled  to  an  account,  and  that,  if 
anything  should  be  found  in  her  favor,  it  should  be  a  lien  on  the 
land.  It  may  be  that  this  judgment  was  given  owing  to  the  pe- 
culiar circumstances  of  the  case.  But  from  the  authorities  cited, 
and  the  strong  equitable  reasons  appealing  to  our  consciences  for 
redress  against  a  fraud,  we  are  of  the  opinion  that  the  evidence 
should  have  been  admitted ;  and  if  it  shall  be  found  on  trial  that 
the  plaintiff's  intestate  was  induced  to  go  upon  the  lot  and  put 
valuable  permanent  improvements  upon  the  same,  by  reason  of  the 
promise  of  the  defendant  that  he  would  convey  the  lot  to  him, 
the  plaintiff  will  be  entitled  to  have  an  account  to  ascertain  the 
value  of  the  improvements,  subject  to  the  rents  and  profits,  while 
the  plaintiff  and  intestate  were  in  possession,  and,  if  a  balance  be 
found  in  her  favor,  the  judgment  shall  constitute  a  charge  on  the 
rents  and  profits  of  said  lot  until  it  is  paid,  and  a  receiver  may 
be  appointed  it  if  shall  be  deemed  necessary. 

Error.  New  trial. 

(65)   SEAMAN  v.  ASCHERMANN, 
51   Wis.,  678,  37  A.   R.,  849—1881. 

Orton,  J.  The  facts  stated  in  the  complaint  make  a  clear  case 
of  a  verbal  agreement  to  execute  a  five  years'  lease,  fully  per- 
formed by  the  plaintiff,  and  partly  performed  by  the  defendants. 
The  only  question  presented  is,  can  this  verbal  agreement  under 
these  circumstances  be  enforced?  Aside  from  the  above  facts  of 
performance,  it  is  conceded  that  the  agreement  is  void  by  the 
statute  of  frauds,  and  can  neither  be  enforced  in  equity  nor  dam- 
ages recovered  for  its  breach  in  a  court  of  law.  That  this  agree- 
ment for  or  as  a  lease  for  five  years,  even  under  the  circumstances 
stated  in  the  complaint,  is  so  invalid  under  the  statute  that  the 
rents  reserved  thereby,  or  damages  for  the  breach  of  the  same, 
could  not  be  recovered  in  an  action  at  law,  is  perfectly  well  set- 
tled.    Story  Eq.  Jur.,  sec.  757.     It  is  only  in  a  court  of  equity,  if 


156  FORMATION    OF    CONTRACT. 

at  all,  that  relief  can  be  obtained,  and  that  for  specific  perform- 
ance, if  performance  is  possible.  The  general  principle  by  which 
courts  of  equity  grant  specific  performance  of  parol  contracts  for 
the  sale  of  lands  or  interests  in  lands  is  clearly  stated  by  Mr.  Jus- 
tice Story,  in  his  great  work  on  Equity  Jurisprudence:  "That 
they  do,  however,  interfere  in  some  cases  within  the  reach  of  the 
statute  is  equally  certain.  But  they  do  so,  not  upon  any  notion  of 
any  right  to  dispense  with  it,  but  for  the  purpose  of  administering 
equities  subservient  to  its  true  objects,  or  collateral  to  it  and  in- 
dependent of  it."     Story  Eq.  Jur.,  sec.  754. 

The  same  learned  author  lays  down  more  strictly  the  ground  of 
equitable  interference  in  such  cases,  as  follows :  "Courts  of  equity 
will  enforce  a  specific  performance  of  a  contract  within  the  statute 
where  the  parol  agreement  has  been  partly  carried  into  execution. 
The  distinct  ground  upon  which  courts  of  equity  interfere  in  cases 
of  this  sort  is,  that  otherwise  one  party  would  be  able  to  practice 
a  fraud  upon  the  other,  and  it  could  never  be  the  intention  of  the 
statute  to  enable  any  party  to  commit  such  a  fraud  with  impunity." 
And  again,  "Where  one  party  has  executed  his  part  of  the  agree- 
ment in  the  confidence  that  the  other  party  would  do  the  same,  it 
is  obvious,  that  if  the  latter  should  refuse,  it  would  be  a  fraud 
upon  the  former  to  suffer  his  refusal  to  work  to  his  prejudice." 
Id.,  sec.  759.  (The  court  here  quotes  from  Potter  v.  Jacobs,  111 
Mass.,  32;  Paine  v.  Wilcox,  16  Wis.,  202,  and  other  cases.) 

We  are  aware  that  in  a  very  few  of  the  States  this  doctrine  is 
not  upheld,  but  in  England  and  in  most  of  the  States  it  is  now 
undisputed.  The  facts  stated  in  the  complaint  make  one  of  the 
strongest  and  clearest  cases  for  its  application  to  be  found  in  the 
books.  The  plaintiff  was  put  to  great  expense  to  change  and  re- 
model the  block  of  stores  to  make  them  suitable  for  the  business 
of  the  defendants,  and  at  their  special  instance  and  request,  and 
in  consequence  and  fulfillment  of  the  agreement,  and  made  out  and 
tendered  the  lease  to  the  defendants  for  them  to  execute  on  their 
part ;  and  the  defendants  went  into  full  possession  and  enjoyment 
of  the  premises  under  said  agreement,  and  for  two  years  paid  the 
plaintiff  the  rents  stipulated  in  the  agreement  and  the  lease  to  be 
executed,  and  merely  delayed,  by  sheer  neglect  and  without  re- 
fusal, to  execute  the  lease  on  their  part.  A  stronger  case  for  the 
exercise  of  this  equity  jurisdiction  could  hardly  be  made.  The 
complaint  stated  a  good  cause  of  action,  and  the  demurrer  should 
have  been  overruled. 

For  effect  of  noncompliance  generally,  see  29  A.  &  E.  Enc,  801;  20 
Cyc,  283;   (lark  Cont.,  sees.  50,  51;   Pollock  Cont,  783. 

The  contract  is  not  void  but  voidable.  Dail  v.  Freeman,  92 — 351;  Cur- 
tis v.  Lumber  Co.,  109--40:  Williams  v.  Lumber  Co..  118—928;  Loughran 
v.  Giles,  110—423. 


STATUTE    OF    FRAUDS. 


157 


The  contract  can  be  proved  only  by  the  writing  itself,  not  as  the  best 
evidence,  but  as  the  only  admissible  evidence.  Morrison  v.  Baker,  81 — 
76;  Williams  v.  Lumber  Co.,  118—928. 

The  parol  contract  is  valid  unless  the  statute  is  invoked  in  some  way. 
Kenner  v.  Mfg.  Co.,  91—421;  Hemmings  v.  Doss,  125—400;  Cowell  v.  Ins. 
Co.,  126—684;  but  the  defendant  could  not  take  advantage  of  it  by 
demurrer.  Loughran  v.  Giles,  110—423;  Hemmings  v.  Doss,  125-^00. 
In  Lyon  v.  Crissman,  22—268,  it  was  held  that  the  statute  should  be 
pleaded;  but  a  denial  by  the  defendant  was  held  sufficient  in  Barnes  v. 
Brown,  71—507;  Bonham  v.  Craig,  80—224;  Young  v.  Young,  81—91; 
Hall  v.  Lewis,  118—509;  North  v.  Bunn,  122—766.  The  rule  as  now 
adopted  is  that  if  the  plaintiff  declares  upon  a  verbal  promise  void 
under  the  statute,  and  the  defendant  either  submits  in  his  answer  to 
perform  it,  or  admits  the  contract  and  does  not  insist  upon  the  statute, 
the  court  will  give  effect  to  it;  but  if  the  defendant  denies  the  promise, 
or  sets  up  a  different  agreement,  or  admits  the  contract  and  pleads  the 
statute,  parol  evidence  can  not  be  used  to  show  the  contract.  Holler 
v.  Richards,  102—545;  Vann  v.  Newsom,  110—122;  Pitt  v.  Moore,  99— 
85;  Jordan  v.  Furnace  Co.,  126—143;  Loughran  v.  Giles,  110—423;  Wil- 
liams v.  Lumber  Co.,  118—928;  Hall  v.  Lewis,  118—509;  Haun  v.  Burrell, 
119_544;  Browning  v.  Berry,  107—231;  Thigpen  v.  Staten,  104 — 40; 
Washington  v.  Blount,  100—230;  Anders  v.  Hill,  144—614;  Allen  v. 
Chambers,  39—125;  Taylor  v.  Russell,  119—30;  Fortescue  v.  Craw- 
ford, 105—29;  Tucker  v.  Markland,  101 — 422;  Improvement  Co.  v.  Guth- 
rie, 116—381;  Henry  v.  Hilliard,  155—372.  In  some  courts  it  is 
held  that  objection  may  be  made  by  demurrer  where  the  defect  appears 
in  the  complaint.    20  Cyc.  312,  and  cases  cited. 

The  English  courts  hold  that  the  statute  does  not  affect  the  substance 
of  the  contract,  but  simply  prescribes  a  rule  of  evidence,  and  hence  must 
be  pleaded;  but  our  courts  hold  that  the  statute  affects  the  contract 
itself,  so  that  whenever  the  party  has  to  prove  it  he  must  do  so  by  the 
legal  evidence.     Gulley  v.   Macey,  84 — 434. 

Part  performance. — For  what  will  bring  a  case  within  this  doctrine, 
see,  Halligan  v.  Frey,  161  Iowa,  185,  141  N.  W.,  944,  49  L.  R.  A.  (N.  S.), 
113,   and   note;   Adams   Eq.,  86;    Bishp.    Eq.,   sees.   384,   385. 

Specific  performance  of  the  parol  contract  can  not  be  had  where  the 
statute  is  invoked  in  any  way;  the  doctrine  of  part  performance  is  not 
recognized  in  this  State.  Ellis  v.  Ellis,  16—345;  Allen  v.  Chambers, 
39—125;  Barnes  v.  Teague,  54 — 277.  The  remedy  of  the  parties  where 
the  contract  is  repudiated  is  stated  fully  in  the  case  above,  Luton  v. 
Badham.  Other  cases  not  cited  in  that  case  are,  Smith  v.  Smith,  36 — 83; 
Winton  v.  Fort,  58—251;  Barnes  v.  Brown,  71—507;  Long  v.  Finger, 
74 — 502;  Daniel  v.  Crumpler,  75—184;  Simmons  v.  Beaman,  76 — 43; 
Wilkie  v.  Womble,  90—254;  Pendleton  v.  Dalton,  92—185;  Syme  v.  Smith, 
92—338;  Vann  v.  Newsom,  110—122;  Loughran  v.  Giles,  110—423;  Field 
v.  Moody,  111—353;  Rumbough  v.  Young,  119—567;  Love  v.  Atkinson, 
131—544;  Ford  v.  Stroud,   150—362. 

In  Dunn  v.  Moore,  38—364,  Allen  v.  Chambers,  39—125,  and  Sain  v. 
Dulin,  59—196,  it  was  held  that  where  the  contract  was  denied  or  a 
different  agreement  set  up,  the  court  could  grant  no  relief  because  it 
could  hear  no  evidence;  but  it  seems  that  these  cases  are  virtually  over- 
ruled  by   Luton   v.    Badham. 

A  parol  vendee  may  interplead  in  a  suit  by  a  subsequent  purchaser,  and 
claim  compensation  for  his  improvements  as  against  the  amount  due  the 
vendor.  Kelly  v.  Johnson,  135—647.  But  a  parol  vendee  can  not  resist  a 
suit  for  possession  by  a  subsequent  purchaser  under  a  duly  registered 
deed;  the  right  of  the  vendee  is  not  under  the  contract  nor  to  have  the 
original  vendor  declared  a  trustee,  but  to  have  compensation.  Wood  v. 
Tinsley,  138—507;  Collins  v.  Lackey,  31  Okla.,  776,  123  Pac,  1118,  40 
L.   R.  A.    (N.   S.),  883. 

Who  may  repudiate.— The  vendor  if  bound  orally  may  repudiate  when 
sued  or  may  sue  for  the  land,  but  he  can  not  keep  the  money  or  the 


158  FORMATION    OF    CONTRACT. 

improvements.  The  vendee  if  bound  orally  may  repudiate  when  sued, 
but  he  can  not  sue  for  his  money  or  compensation  when  the  vendor  is 
willing  to  perform  or  is  bound  in  writing.  If  either  is  bound  in  writing, 
he  can  not  take  advantage  of  the  statute  as  against  the  other.  Clancy 
v.  Craine,  17—363;  Long  v.  Finger,  74—502;  Green  v.  R.  R.,  77—95;  Syme 
v.  Smith,  92—338;  Improvement  Co.  v.  Guthrie,  116 — 381;  Love  v.  Welch, 
97_200;  Simms  v.  Killian,  34—252;  Davis  v.  Yelton,  127—348;  Davison 
v.  Land  Co.,  126—704;  Love  v.  Atkinson,  131—544;  Faust  v.  Shoffner, 
62—242.  (Taylor  v.  Russell,  119—30,  contra,  overruled  in  Hall  v.  Misen- 
heimer,  supra.)     Brown  v.   Hobbs,   154 — 544. 

Where  A  had  an  option  in  writing  on  B's  land  and  it  was  extended  by 
parol  at  B's  request,  B  is  estopped  to  plead  the  statute  if  A  has  been 
ready  to  comply  with  the  terms.  Alston  v.  Connell,  140 — 485;  20 
Cyc,  287. 

Strangers  to  the  contract  can  not  take  advantage  of  the  statute. 
Davis  v.  Inscoe,  84 — 396;  Parker  v.  Allen,  84 — 466;  Cowell  v.  Ins.  Co., 
126—684;  Plaster  Co.  v.   Plaster  Co.,  156 — 455. 

Avoidance  of  the  contract  avoids  it  in  toto.  Clancy  v.  Craine,  17 — 363; 
but  in  a  divisible  contract  the  part  not  within  the  statute  may  be  valid 
and    the    other    invalid.      Wooten    v.    Walters,    110 — 251. 

The  measure  of  compensation  in  case  of  repudiation  by  vendor  is  the 
enhanced  value  of  the  property  and  not  the  cost  of  the  improvements. 
Wetherell  v.  Gorman,  74 — 603;  Daniel  v.  Crumpler,  75—184;  North  v. 
Bunn,   128—196. 

Conflict  of  laws. — If  a  contract  is  made  in  a  foreign  State,  not  re- 
quired by  the  law  there  to  be  in  writing,  but  so  required  in  this  State,  it 
can  not  be  enforced  in  this  State  because  proof  in  writing  is  necessary. 
McGee  v.  Blankenship,  95—563;  64  L.  R.  A.,   119. 

The  Statute  of  Frauds  does  not  include: 

1.  Executed  contracts.  Choat  v.  Wright,  13—289;  Mushat  v.  Brevard, 
15—73;  Eppes  v.  McLemore,  14—345;  White  v.  White,  20—563;  Reeves 
v  Edwards,  47 — 457;  Hall  v.  Fisher,  126—205;  McManus  v.  Tarleton, 
126—790;  Brinkley  v.  Brinkley,  128—503;  Smith  v.  Arthur,  110^00;  Sat- 
terfield  v.  Kindley,  144—455,  15  L.  R.  A.  (N.  S.),  399,  12  Ann.  Cas., 
1098;  Rogers  v.  Lumber  Co.,  154 — 108;  Manning  v.  Foster,  49  Wash., 
541,  96  Pac,  233,  18  L.  R.  A.  (N.  S.),  337;  20  Cyc,  302;  St.  of  Frds., 
Cent.  Dig.,  sees.  295,  334;  Dec.  Dig.,  sec.  139. 

2.  Contracts  created  by  law.  This  applies  to  quasi  contracts  where  the 
law  implies  the  obligation;  and  to  sales  made  by  the  sheriff  under  execu- 
tion. Tate  v.  Greenlee,  15—149;  or  to  sales  under  order  of  court.  Trice 
v  Pratt,  21—626;  Atty.-Gen.  v.  Nav.  Co.,  85 — 411 :  In  re  Dickerson, 
111—114. 

3.  Obligations  arising  from  special  statute.  As  in  case  of  the  claims  of 
subcontractors,  etc.     Revisal,  sec.  2019. 

Contracts  required  to  be  in  writing  in  North  Carolina: 

1.  Bills  of  exchange  and  promissory  notes.  Revisal,  sec.  2151.  Mc- 
Arthur  v.  McLeod,  51 — 475;  and  may  be  written  in  pencil,  Gudger  v. 
Fletcher,   29—372. 

2.  Acceptance  of  bill  of  exchange  or  order  for  the  payment  of  money. 
Revisal,  sees.  2882-2885.  Formerly  written  acceptance  was  not  necessary. 
Short  v.  Blount,  99—49. 

3.  Assignment  of  copyright  or  patent.  Under  U.  S.  Statute,  Rev.  Stat., 
sees.  4898,  4955. 

4.  New  promise  or  acknowledgment  of  a  debt  barred  by  the  Statute 
of  Limitations.     Revisal,  sec.  371;  Clark's  Code,  sec.  172,  and  cases  cited. 

5.  Promise  to  pay  a  debt  after  a  discharge  in  bankruptcy.  Revisal,  sec. 
978.  Verbal  promise  was  sufficient  before  the  act  of  1899.  Hornthal  v. 
McRae,  67—21;  Fraley  v.  Kelly,  67—78;  Ibid,  79—348;  Kull  v.  Farmer, 
78—339;  Shaw  v.  Burney,  86—331. 

6.  Limited  partnership  contracts  are  required  to  be  in  writing  and 
registered.     Revisal,   sec.   2523.     Davis  v.   Sanderlin,   119 — 84. 


STATUTE    OF    FRAUDS.  159 

7.  Certain  contracts  of  married  women,  requiring  written  consent  of 
husband.     Revisal,  sees.  2094,  2096,  2107. 

8.  All  contracts  with  Cherokee  Indians,  where  the  amount  is  over  $10. 
Revisal,  sec.  975.     Lovingood  v.  Smith,  52 — 601. 

9.  Sale  of  liquor  by  retail  on  credit  over  $10.  Revisal,  sec.  977.  Cov- 
ington v.  Threadgill,  88 — 186. 

10.  Promise  to  bind  executor,  etc.,  personally.     See   above. 

11.  Promise    to   pay   the    debt   of   another.      See   above. 

12.  Conveyances   of  land  and  contracts  to   convey.     See  above. 

13.  Leases  for  more  than  three  years,  and  all  mining  leases. 

14.  Agricultural  liens.  Revisal,  sec.  2052;  Patapsco  v.  Magee,  86 — 350; 
Odom  v.  Clark,   146—544. 

Conditional  sales,  Revisal,  983;  chattel  mortgages,  Revisal,  1039-1041; 
are  valid  between  the  parties  without  writing,  but  are  required  to  be  in 
writing  for  registration  as  against  third  persons.  White  v.  Carroll, 
146—230;   Roberts  v.   Hudson,   158—210. 

Insurance  contracts  are  not  required  to  be  in  writing,  though  Revisal, 
4759,  requires  a  certain  form  of  policy.     Floare  v.  Ins.  Co.,  144 — 232. 

The  promise  of  an  infant  to  ratify  a  contract  after  coming  of  age  need 
not  be  in  writing.     See  post,  Infants'  contracts. 

Corporations  were  required  by  The  Code,  683,  to  make  contracts  in 
writing  if  the  amount  was  over  $100;  but  that  has  been  repealed.  The 
same  rules  as  under  the  Statute  of  Frauds  applied.  Kenner  v.  Mfg.  Co., 
91—421;  Cozart  v.  Land  Co.,  113 — 294;  Rumbough  v.  Improvement  Co., 
106—461.  It  did  not  apply  to  foreign  corporations.  Curtis  v.  Piedmont 
Co.,  109 — 401;  nor  to  executed  contracts.  Roberts  v.  Woodworking  Co., 
111—432;  Luttrell  v.  Martin,  112—593;  Clowe  v.  Pine  Product  Co.,  114— 
304.  The  contract  being  void  under  the  statute,  could  not  be  ratified 
after  its  repeal.  Spence  v.  Cotton  Mills,  115 — 210;  Jenkins  v.  Mfg.  Co., 
115 — 535;  Mordecai's  Law  Lectures,  986. 


160  FORMATION    OF    CONTRACT. 


CHAPTER  V. 

Consideration. 

Sec.  1.     What  constitutes  a  consideration. 

1.  Valuable    consideration. 

(66)  LEAKSVILLE-SPRAY  INSTITUTE  v.  MEBANE, 
165   N.   C,  644,  81   S.   E.,   1020—1914. 

This  was  an  action  to  recover  a  sum  of  money  upon  the  follow- 
ing writing:  "On  sixty  days  demand,  I  will  pay  to  the  order  of 
D.  F.  King,  Dr.  John  Sweaney,  and  B.  F.  Ivey,  $1,500  (one  thou- 
sand five  hundred  dollars),  said  parties  to  dispose  of  this  amount 
in  connection  with  the  Leaksville-Spray  Institute  in  any  way  they 
may  see  fit.  (Signed)   B.  Frank  Mebane. 

"Payable  at  the  Bank  of  Spray,  N.  C." 

The  plaintiff  King,  the  defendant  Mebane  and  others  were  seek- 
ing to  establish  the  Spray  School  of  Technology,  and  in  doing  so 
it  was  thought  desirable  to  purchase  the  Leaksville-Spray  Institute 
and  the  Leaksville  Furniture  Factory,  in  both  of  which  King 
owned  stock.  Part  of  the  furniture  company  stock  was  purchased 
by  the  defendant  or  by  the  American  Warehouse  Co.,  when  a 
question  arose  as  to  whether  this  property  was  to  be  used  for  the 
benefit  of  the  school,  and  King  refused  to  sell  his  stock  until  this 
was  settled.  Thereupon  the  defendant  executed  this  paper,  and 
King  and  others  sold  him  their  stock.  The  principal  defense  was 
that  there  was  no  consideration  for  this  promise  to  pay. 

The  court  instructed  the  jury :  "That  a  valuable  consideration 
consists  either  in  some  right,  interest,  benefit,  or  profit  accruing  to 
the  party  who  makes  the  payment,  or  some  forbearance,  detri- 
ment, loss  or  responsibility,  act  or  service  given,  suffered  or  un- 
dertaken by  the  other  to  whom  it  is  made. 

"In  order  to  support  the  contract,  it  is  not  required  that  the 
consideration  shall  be  for  the  full  value  of  the  sum  named  in  the 
contract,  or  for  full  value  of  the  property  passed.  Mere  inade- 
quacy of  consideration  will  not  avoid  a  contract,  in  the  absence  of 
fraud,  where  a  contract  is  legally  sufficient  on  its  face ;  and  so 
full  value  was  not  required  to  support  the  simple  promise,  but  it 
must  be  of  some  value.     .     .     . 

"If  you  should  find  from  the  evidence  in  this  case  that  the  de- 


CONMDKKATIUX. 


161 


fendant  desired  to  purchase  stock  of  D.  F.  King  and  others  in  the 
furniture  factory,  that  King  and  others  refused  to  sell  this  stock 
to  the  defendant  unless  he  would  execute  the  note  sued  on,  and  in 
order  to  accomplish  the  purchase  of  this  stock  the  defendant  was 
required  to  execute  the  note,  and  that  this  stock  was  of  some 
value,  then  there  was  a  sufficient  consideration  for  the  note." 

There  was  a  judgment  for  the  plaintiff,  and  the  defendant  ap- 
pealed. Affirmed. 

AllKx,  J.  The  authorities  fully  support  the  charge  of  His 
Honor.  Brown  v.  Ray,  32  N.  C,  73,  51  Am.  Dec,  379;  Faust  v. 
Faust,  144  N.  C,  386,  57  S.  E.,  22;  Kirkman  v.  Hodgin,  151  N. 
C,  591,  66  S.  E.,  616.     In  the  first  of  these  cases,  Pearson,  C.  J., 

said : 

"To  make  a  consideration,  it  is  not  necessary  that  the  person 
making  the  promise  should  receive  or  expect  to  receive  any  benefit. 
It  is  sufficient  if  the  other  party  he  subjected  to  loss  or  incon- 
venience. A  trust  or  confidence  reposed,  by  reason  of  an  under- 
taking to  do  an  act,  is  held  to  be  a  sufficient  consideration  to  sup- 
port an  action  on  the  promise." 
— and  this  was  approved  in  the  last  case  cited. 

In  9  Cyc,  312,  the  author  cites  many  authorities  to  support  the 
position  that : 

"There  is  a  consideration  if  the  promisee  in  return  for  the  prom- 
ise, does  anything  legal  which  he  is  not  bound  to  do,  or  refrains 
from  doing  anything  which  he  has  the  right  to  do,  whether  there 
is  any  actual  loss  or  detriment  to  him,  or  actual  benefit  to  the 
promisor  or  not." 

In  Hamer  v.  Sidway,  124  N.  Y.,  538,  27  N.  E.,  256,  12  L.  R. 
A.,  463,  21  Am.  St.  Rep.,  693,  the  court  applied  this  principle  to  a 
contract  to  refrain  from  the  use  of  tobacco  and  intoxicating 
liquors,  and  said : 

"The  defendant  contends  that  the  contract  was  without  consid- 
eration to  support  it,  and  therefore  invalid.  He  asserts  that  the 
promisee  by  refraining  from  the  use  of  liquor  and  tobacco  was  not 
harmed  but  benefited;  that  that  which  he  did  was  best  for 
him  to  do  independently  of  his  uncle's  promise,  and  insists  that  it 
follows  that,  unless  the  promisor  was  benefited,  the  contract  was 
without  consideration,  a  contention  which,  if  well  founded,  would 
seem  to  leave  open  for  controversy  in  many  cases  whether  that 
which  the  promisee  did  or  omitted  to  do  was  in  fact  of  such  ben- 
efit to  him  as  to  leave  no  consideration  to  support  the  enforcement 
of  the  promisor's  agreement.  Such  a  rule  could  not  be  tolerated, 
and  is  without  foundation  in  the  law.  The  exchequer  chamber  in 
1875  defined  consideration  as  follows:  'A  valuable  consideration 
in  the  sense  of  the  law  may  consist  either  in  some  right,  interest, 


162  FORMATION    OF    CONTRACT. 

profit  or  benefit  accruing  to  the  one  party,  or  some  forbearance, 
detriment,  loss  or  responsibility  given,  suffered,  or  undertaken  by 
the  other.'  Courts  'will  not  ask  whether  the  thing  which  forms 
the  consideration  does  in  fact  benefit  the  promisee  or  a  third 
party,  or  is  of  any  substantial  value  to  anyone.  It  is  enough  that 
something  is  promised,  done,  forborne,  or  suffered  by  the  party 
to  whom  the  promise  is  made  as  consideration  for  the  promise 
made  to  him.'  Anson  on  Contracts,  63.  'In  general,  a  waiver  of 
any  legal  right  at  the  request  of  another  party  is  a  sufficient  con- 
sideration for  a  promise.'  Parsons  on  Contracts,  444.  'Any  dam- 
age, or  suspension,  or  forbearance  of  a  right  will  be  sufficient  to 
sustain  a  promise.'  2  Kent's  Com.  (18th  Ed.),  465.  Pollock,  in 
his  work  on  Contracts,  page  166,  after  citing  the  definition  given 
by  the  exchequer  chamber  already  quoted,  says :  'The  second 
branch  of  this  judicial  description  is  really  the  most  important 
one.  Consideration  means,  not  so  much  that  one  party  is  profiting 
as  that  the  other  abandons  some  legal  right  in  the  present,  or 
limits  his  legal  freedom  of  action  in  the  future  as  an  inducement 
for  the  promise  of  the  first.'  "  Hamer  v.  Sidway,  124  N.  Y.,  538, 
27  N.  E.,  256,  12  L.  R.  A.,  463.  21  Am.  St.  Rep.,  693. 

Applying  these  principles,  there  can  be  no  doubt  that  there  was 
evidence  of  a  consideration  sufficient  to  support  the  promise  of  the 
defendant,  as  the  plaintiff  testified  that  he  refused  to  sell  his  stock 
in  the  furniture  company  except  upon  condition  that  the  defendant 
executed  the  paper  declared  on  in  the  complaint.     .     .     . 

The  fact  that  King  was  benefited  by  the  sale  of  his  stock,  if 
shown  to  be  true,  would  not  destroy  the  consideration  for  the 
promise  of  the  defendant,  because  the  consideration  consists  in 
yielding  the  legal  right  to  retain  the  stock,  and  to  impose  the  con- 
ditions upon  which  he  would  sell.     . 

It  appears  to  us  from  the  record  that  the  defendant  has  not 
been  seeking  profit  or  advantage  for  himself,  and  that  he  has  been 
actuated  by  high  public  motives,  but  there  is  evidence  to  support 
the  verdict,  and  we  can  not  disturb  it. 

Xo  error. 

A  consideration  is  that  which  moves  from  the  promisee  to  the 
promisor  as  the  basis  of  his  promise.  While  the  definition  generally 
.uives  it  as  "a  benefit  to  the  promisor  or  a  loss  or  detriment  to  the 
promisee,"  the  loss  or  detriment  is  the  important  feature.  It  is  imma- 
terial that  the  promisor  is  not  benefited,  if  the  promisee  has  parted 
with  some  right  which  in  law  he  could  exercise.  Pollock  Cont.,  167; 
Rank  v.  Bridgers,  ''8—67,  2  A.  S.  R.,  317;  Devecmon  v.  Shaw,  60  Md., 
199,  9  A.  S.  R.,  422;  Freeman  v.  Morris,  131  Wis.,  216.  109  N.  W., 
083.   11   Ann.  Cas.,  482;  6  R.  C.  L.,  654;  Contracts,  Cent.  Dig.,  sec.  248. 

A  contract  for  any  valuable  consideration,  as  for  marriage,  for  money, 
for  work  done,  or  for  other  reciprocal  contracts,  can  never  be  im- 
peached at  law:  and  if  it  be  of  a  sufficient  adequate  value,  is  never  set 
aside    in    equity;    for    the    person    contracted    with    has    then    given    an 


CONSIDERATION.  163 

equivalent    to    recompense,    and    is    therefore    as    much    an    owner,    or    a 
creditor,  as  any  other  person.     2  Blk.,  444. 

Sufficient  Consideration. — It  is  only  necessary  that  there  should  be 
either  a  gain  or  benefit  to  the  promisor,  or  a  loss,  injury  or  detriment 
to  the  promisee.  So  where  A  sold  a  slave  to  B,  and  B  put  handcuffs  on 
the  slave,  then  A  promised  to  pay  B  $100  if  he  would  take  the  handcuffs 
off  and  the  slave  should  escape;  B  took  the  handcuffs  off  and  the  slave 
escaped;  A  was  liable  on  his  promise,  but  he  should  have  been  notified 
of  the  escape.  Weatherly  v.  Miller,  47 — 166.  A  was  about  to  buy  B's 
land,  but  being  undecided,  C  promised  to  pay  him  $100  if  he  would  buy 
the  land,  in  order  to  get  rid  of  B  as  a  neighbor;  A  bought  the  land,  and 
C's  promise  was  sustained.  Little  v.  McCarter,  89 — 233.  A  promise  to 
guarantee  the  purchaser  against  loss  for  5  percent  of  the  profits  on  a 
resale  of  the  land,  is  sufficient.  Shelton  v.  Reynolds,  111 — 525.  A  prom- 
ise by  the  vendor  to  repay  a  part  of  the  purchase-money,  if  the  vendee 
will  have  the  land  surveyed  and  there  is  a  deficiency  in  the  number  of 
acres.  Sherrill  v.  Hagan,  92 — 345.  The  sale  and  conveyance  of  a  tract 
of  land  is  sufficient  consideration  for  a  promise  to  pay  for  improvements. 
Manning  v.  Jones,  44 — 368;  or  to  pay  part  of  the  proceeds  from  the  sale 
of  the  mineral  interest.  Michael  v.  Foil,  100 — 178.  See  also  Bourne  v. 
Sherrill,  143 — 387.  The  defendant  was  induced  by  fraud  to  execute  a  bill 
of  sale  for  certain  property,  and  then  refused  to  give  it  up;  the  consid- 
eration was  the  endorsement  of  a  bond  to  the  defendant  with  the  name  of 
the  surety  erased;  this  was  valid  consideration,  though  the  validity  of 
the  bond  may  have  been  affected  by  the  alteration,  because  the  plaintiff 
had  a  right  to  keep  it.  The  fraud  being  in  the  consideration  and  not  in 
the  factum,  could  only  be  inquired  into  in  equity.  Gwyn  v.  Hodge,  49 — 
168;  but  under  the  present  practice  it  could  be  investigated.  Hughes  v. 
Boone,  102 — 137.  The  assignment  of  a  judgment  is  a  sufficient  considera- 
tion for  a  promise  to  pay  one-third  of  the  amount  of  the  judgment, 
whether  it  is  collected  or  not.  Winberry  v.  Koonce,  83 — 351;  post,  196. 
An  agreement  to  support  two  deaf  and  dumb  brothers  is  a  valuable  con- 
sideration in  a  deed  from  a  father  to  a  son.     Worthy  v.  Brady,  91—265. 

A  and  B  were  members  of  a  corporation;  A  conveyed  land  to  the 
corporation  on  the  agreement  that  one-fourth  was  to  be  paid  for  in  cash 
or  personal  notes  of  the  members,  and  the  balance  secured  by  a  mort- 
gage by  the  corporation;  the  corporation  was  also  to  give  its  note  and 
issue  stock  to  the  members  for  the  amounts  so  paid  or  secured  by  them, 
and  this  was  done;  B  gave  his  note  for  part  of  the  price  and  was  held 
hable  in  an  action  by  A.  Johnson  v.  Rodeger,  119 — 446.  A  sold  goods 
to  B,  an  infant,  upon  his  promise  to  pay  certain  debts  of  A;  this  was  a 
valuable  consideration,  though  the  promise  of  the  infant  was  voidable. 
Hislop  v.  Hoover,  68 — 141.  A  wrote  to  B,  "Let  M  see  statement  of  my 
account,  and  give  him  any  money  due  me";  M  presented  this  and  B 
promised  to  pay  the  amount  due,  but  afterwards  refused;  the  promise 
was  binding.  Brem  v.  Covington,  104 — 587.  A  promise  to  devise  land, 
based  upon  sufficient  consideration,  may  be  enforced.  East  v.  Dolihite, 
72 — 562;  Price  v.  Price,  133 — 494.  An  agreement  to  arbitrate  can  not  be 
set  up  as  a  defense,  but  may  be  a  cause  of  action  for  breach.  Carpenter 
v.  Tucker,  98—316. 

In  dealings  during  the  Civil  War,  Confederate  Treasury  notes  were 
sufficient  consideration.  Kingsbury  v.  Lyon,  64 — 128;  Phillips  v.  Hooker, 
62 — 193.  A  Confederate  bond  was  given  in  payment  of  a  debt,  and  the 
assignor  promised  that  if  the  transfer  was  not  valid  he  would  make  it  so 
or  pay  $10,000;  the  promise  was  absolute  and  could  be  enforced.  Bryan 
v.  Heck,  67 — 322.  A  railroad  company  can  make  a  valid  agreement 
fixing  the  value  of  property  in  case  of  loss,  but  it  must  be  reasonable 
and  based  on  a  valuable  consideration.  Gardner  v.  R.  R.,  127 — 293.  The 
word  "sold"  in  a  deed  ex  vi  termini  imports  a  valuable  consideration,  to 
rebut  the  presumption  of  a  resulting  trust.  Reves  v.  Copper  Co.,  74 — 
593.  A  valuable  consideration  is  money  or  money's  worth.  Jackson  v. 
Hampton,  30 — 477;   Springs  v.   Hanks,  27 — 30. 


164  FORMATION    OF    CONTRACT. 

On  valuable  consideration  generally,  see  1  Page  Cont.,  sees.  274-278; 
sec.  282  et  seq.;  Harriman  Cont.,  pp.  3J-79;  9  Cyc,  308  et  seq.;  1  Parsons 
Cont.,  466  et  seq.;  6  Am.  &  Eng.  Encyc,  673,  677;  Clark  Cont..  106; 
Mordecai's   Lectures,  694. 

Insufficient  Consideration — Nudum  Pactum. — In  the  Roman  law  a 
nudum  pactum  was  so  called  to  distinguish  it  from  pactum  verbis  prcscriptis 
vestitum.  1  Parsons  Cont.,  p.  463.  A  promise  by  an  attorney,  during  the 
pendency  of  a  suit,  to  indemnify  his  client  against  loss  is  nudum  pactum. 
Mitchell  v.  Bell,  1 — 157.  A  promise  by  a  daughter  to  reconvey  land  to 
her  father  which  he  had  conveyed  to  her  is  without  consideration.     Ray 

v.   Wilcoxon,   107 — -514.     A  gave   B   an   order  on   C  for  $ ;   B   failed 

to  present  it  to  C,  but  afterwards  asked  A  to  pay  it;  A  said  "produce 
the  paper  and  I  will  pay  it";  B  took  the  paper  out  of  his  pocket,  and  A 
refused  to  pay  it;  the  first  promise  of  A  was  conditional,  and  the  second 
was  without  consideration.  Brown  v.  Teague,  52 — 573.  A  sold  property 
belonging  to  the  wife  in  the  lifetime  of  the  husband,  and  after  the 
husband's  death  gave  his  note  to  the  wife  for  the  money;  the  note  was 
without  consideration,  as  the  money  belonged  to  the  husband's  estate. 
Bryan  v.  Philpot,  25—467.  (Under  the  present  law  the  note  would  be 
valid.) 

A  leased  land  to  K  for  4,800  pounds  of  cotton,  and  made  advances  to 
the  amount  of  1,600  pounds  more;  K  paid  all  but  580  pounds,  and  then 
delivered  six  bales  to  F;  F  asked  A  to  allow  him  to  pay  the  money  to 
K  and  A  consented,  but  before  it  was  paid  withdrew  his  consent  and 
refused  to  waive  his  lien;  his  promise  was  without  consideration  and 
could  be  revoked  at  any  time  before  acted  on.  Sugg  v.  Farrar,  107 — 123. 
A  was  the  owner  of  a  rice-mill  and  had  a  "turn  of  rice,"  1,500  bushels, 
at  his  mill;  he  agreed  to  let  his  customer  have  it,  but  no  particular 
inducement  or  other  explanation  was  shown;  the  promise  was  nudum 
pactum.  Ashe  v.  DeRosset,  53 — 240.  A  contracted  to  build  a  house  for 
B,  and  before  it  was  finished  sold  his  interest  in  it  to  C;  C's  promise  was 
nudum  pactum.  Johnson  v.  Carson,  12 — 80.  A  agreed  with  B  that  if  the 
referees  in  an  arbitration  intended  to  allow  a  certain  credit,  it  should 
be  credited  on  B's  note;  B  offered  to  show  in  a  suit  that  the  arbitrators 
intended  to  allow  it  but  omitted  it;  A's  promise  was  without  considera- 
tion. Patton  v.  Garret,  116 — 847.  Where  the  town  located  a  deep-water 
line  for  a  wharf,  and  A  obtained  a  grant  recognizing  that  line,  but  the 
location  was  incorrect,  there  was  no  consideration  for  A's  waiver  of  his 
right  to  have  it  properly  located.  Wool  v.  Edenton,  117 — 1.  A  sold  to 
B  property  belonging  to  C  without  C's  consent;  afterwards  C  ratified  the 
sale,  then  tried  to  hold  A  for  the  amount.  After  ratification  A's  promise 
to  pay  wa-;  nudum  pactum.     Rowland  v.  Barnes,  81 — 234. 

2.  Consideration  and   motive. 

(67)  JOHNSON,  Admrx.,  v.  JOHNSON, 

10  N.  C,  556—1825. 

Action  of  assiuiipsit  on  a  promissory  note  of  defendant  payable 
to  plaintiff's  intestate. 

On  the  trial  the  question  was  whether  the  defendant,  who  was 
the  son  of  the  intestate,  had  been  discharged  from  the  payment  of 
the  note.  For  the  purpose  of  showing  this,  the  defendant  offered 
evidence  that  the  intestate,  just  before  his  death,  said  to  a  witness 
specially  called  by  him,  that  the  defendant  should  never  pay  any 
part  of  the  amount  of  the  note,  for  he  was  an  industrious  man  and 
would  take  care  of  what  he  had.     This  evidence  was  objected  to, 


CONSIDERATION.  165 

but  was  received  by  the  court.  There  was  further  evidence  that 
the  intestate  had  said  that  he  had  induced  the  defendant  to  pur- 
chase the  tract  of  land,  to  pay  for  which  the  money  secured  by 
the  note  was  loaned,  by  which  purchase  he  had  embarrassed  him- 
self ;  that  he  had  received  of  defendant  some  pork,  flour  and  beef ; 
that  the  defendant  had  rendered  him  many  valuable  services ;  that 
he  had  brought  the  defendant's  negro  blacksmith  to  Warrenton 
against  the  wishes  of  defendant,  where  he  died;  and  that,  there- 
fore, the  defendant  should  not  pay  any  part  of  the  money.  The 
note  was  found  among  the  intestate's  papers  after  his  death,  with 
several  credits  for  interest  and  part  of  the  principal  endorsed. 

The  Judge  instructed  the  jury  that  a  mere  declaration  by  the 
intestate  that  the  defendant  should  not  pay  the  money  due  on  the 
note,  unless  accompanied  with  destruction  of  the  note,  would  not 
discharge  the  defendant ;  but  if  they  found  the  facts  to  be  that  the 
intestate  had  induced  the  defendant  to  purchase  the  land  men- 
tioned and  thereby  involved  him;  that  the  intestate  had  received 
the  money,  flour,  pork  and  beef  of  the  defendant,  and  the  defend- 
ant had  rendered  to  him  valuable  services,  and  that  he  had  brought 
the  defendant's  blacksmith  to  town  against  his  wishes,  where  he 
died ;  and  that  the  intestate,  in  consideration  thereof,  declared  that 
the  defendant  should  not  pay  the  note,  the  defendant  would  thereby 
be  discharged. 

There  was  a  verdict  and  judgment  for  the  defendant,  and  plain- 
tiff appealed. 

Taylor,  C.  J.     It  is  very  evident  that  the  testator's  having  said 
that  the  defendant  should  never  pay  any  part  of  the  note  was  not 
obligatory  on  him,  unless  it  was  founded  on  a  consideration  yield- 
ing a  benefit  to  him,  or  attended  with  trouble  or  prejudice  to  the 
defendant.     The   motives   inducing   him   to   make   this   declaration 
are  of  different  characters    and  should  have  been  discriminated  to 
the  jury  according  to  their  legal  operation.     The  testator's  having 
induced  the  defendant  to  purchase  the  land  by  which  he  became 
involved  does  not  form  a  valid  consideration  ;  for  understanding  it 
as  proceeding  from  advice  honestly  given,  although  the  event  might 
have  been  unfortunate,  he  thereby  incurred  no  moral   obligation, 
and  such  a  promise  could  not  become  legally  obligatory  on  him. 
His    having    brought    the    defendant's    blacksmith    to    Warrenton 
against  the  zvishes  of  his  master  is  subject  to  the  same  construc- 
tion, for  the  testator  must  be  understood,   from  the  statement  of 
the  evidence,  to  have  acted  according  to  the  best  of  his  judgment 
for  the  defendant's  interest,  and  as  it  does  not  appear  that  it  was 
done  against  the  consent  of  the  owner,  the  accident  of  the  negro's 
death  could  not  make  the  testator  liable  either  in  law  or  conscience. 
The  promise  not  to  require  payment  of  the  note,  so  far  as  it  was 


166  FORMATION    OF    CONTRACT. 

founded  on  these  two  considerations,  was  perfectly  gratuitous  and 
could  only  be  enforced  by  applying  to  the  feelings  and  bounty  of 
the  testator,  but  could  in  no  view  be  made  the  subject  of  an  action. 
But  he  further  acknowledged  that  the  defendant  had  rendered  him 
many  valuable  services  and  had  delivered  him  various  articles  of 
produce.  These  would  form  the  proper  subject  of  a  set-off  could 
their  amount  be  ascertained.  May  not  the  credit  on  the  note  have 
been  in  part  for  them?  That  these  alone  did  not,  in  the  testator's 
opinion,  amount  to  a  full  payment  of  the  note  seems  certain  from 
his  adding  the  other  motives  to  them.  The  true  inquiry  for  the 
jury  to  have  made  was  whether  the  note  had  been  paid  off  in 
whole  or  in  part,  or  whether  the  testator  had  promised  that  he 
would  not  require  payment  on  such  considerations  as  were  valid 
in  law.  The  first  was  plainly  a  question  of  fact ;  and  on  the  latter 
the  jury  should  have  been  instructed  that  all  the  considerations 
were  insufficient,  except  the  produce  delivered  and  the  services 
performed.     In  this  opinion  the  other  Judges  concurred. 

Judgment   reversed. 

The  consideration  and  the  purpose  or  motive  are  not  the  same  thing. 
The  consideration  is  the  immediate  present  compensation  which  the 
grantor  receives,  be  it  real  or  nominal,  and  which  is  necessary  in  a  deed 
of  bargain  and  sale  to  raise  a  use;  the  motive  is  the  remote  purpose 
which  the  grantor  had  in  mind  and  which  is  manifested  by  the  uses  and 
trusts  declared.     Morris  v.  Pearson,  79 — 253. 

See  also  1  Page  Cont.,  sec.  275;  Clark  Cont.,  103;  Little  v.  McCarter.  89 
—233;  Philpot  v.  Gruninger.  14  Wall.  570;  6  R.  C.  L.,  653. 

3.    Good    consideration. 

(68)   BLOUNT  v.  BLOUNT, 
4  N.  C,  389—1815. 

This  is  an  action  of  trespass  q.  c.  /.,  in  which  the  jury  found 
a  verdict  for  the  plaintiff,  subject  to  the  opinion  of  the  court  on 
the  sufficiency  of  a  deed. 

The  plaintiff  claimed  as  heir-at-law  of  Levi  Blount,  and  the  de- 
fendant claimed  under  Judith  Whidbie,  to  whom  Levi  Blount  had 
executed  a  deed,  with  the  expression  "as  well  for  and  in  consid- 
eration of  the  natural  love  and  affection  which  he  hath  for  and 
beareth  unto  the  said  Judith  Whidbie,  his  natural  born  daughter, 
as  for  the  better  maintenance,  etc.,  of  said  Judith  Whidbie." 

Taylor,  C.  I.  The  question  arising  upon  this  record  is,  whether 
the  deed  relied  upon  by  the  defendant  is  sufficient  in  law  to  convey 
the  title  from  Levi  Blount.  The  distinction  between  a  deed  and 
a  parol  contract  is  well  settled  at  common  law,  and  upon  the  basis 
of  sense  and  justice.  The  inconsiderate  manner  in  which  words 
frequently  pass   from   men,   would  often  betray   them   into  acts  of 


CONSIDERATION.  167 

imprudence,  and  not  un frequently  expose  them  to  the  artifices  of 
fraud,  were  they  not  placed  under  the  safeguard  of  that  rule, 
which  denies  validity  to  a  parol  contract,  unsupported  by  a  consid- 
eration. On  the  other  hand,  the  ceremonies  which  accompany  a 
deed  imply  reflection  and  care,  and  serve  to  enable  a  man  to  avoid 
either  surprise  or  imposition. 

This  rule  was  changed  only  when  Chancery  assumed  jurisdic- 
tion of  uses,  when  they  acted  upon  the  maxim  of  the  civil  law, 
ex  undo  pacto  non  oritur  actio,  and  would  not  carry  a  deed  into 
execution  which  was  not  supported  by  a  consideration. 

Lord    Bacon,    in    his    reading   on   the   statute   of    uses,    remarks, 
"They  say  that  a  use  is  but  a  nimble  and  light  thing  and  now  con- 
trawise,  it  seemeth  to  be  weightier  than  anything  else,  for  you  can 
not  weigh  it  up  to  raise  it,  neither  by  deed,  nor  by  deed  enrolled 
without  the  weight  of  a  consideration.     But  you  shall  never  find  a 
reason  of  this  to  the  world's  end  in  the  law  ;  but  it  is  a  reason  of 
Chancery,  and  it  is  this:  that  no  court  of  conscience  will  enforce 
donum  gratuititm,  though  the  intent  appear  never  so  clearly,  where 
it  is  not  executed  or  sufficiently  passed  by  law ;  but  if  money  have 
been  paid  and  so  a  person  damnified,  or  that  it  was  for  the  estab- 
lishment of  his  house,  then  it  is  a  good  matter  in  the  Chancery." 
Of   common   law   conveyances   it   is   necessary   to   notice   only   a 
feoffment,  and  it  is  very  clear  that  this  deed  can  not  operate  as 
such.  Because  the  case  does  not  state  that  Levi  Blount  was  in  pos- 
esssion,  nor  that  he  gave  livery  of  seisin  ;  and  if  the  deed  were  in 
all   other   respects    formally   in    feoffment,    the    mere    signing   and 
sealing  such  a  deed  was,  in  no  instance,  sufficient  to  transfer  an 
estate  of   freehold,  unless  the  possession   was   delivered   from  the 
feoffer  to  the  feoffee,  and  without  which  a  deed  of  feoffment  only 
passed  an  estate  at  will.     1  Co.  Lit.,  43a.     The  livery  of  seisin  is 
the  delivery  of  actual  possession  ;  and  therefore  can  not  be  made 
by  a  person  who  has  not  at  the  moment  actual  possession.     Con- 
sequently, if  a  person  make  a  feoffment  of  lands  which  are  let  at 
lease,  he  must  obtain  the  assent  of  the  lessee  to  the  livery.     The 
old   practice   was    for  the  lessee  to   give   up  the  possession    for   a 
moment  to  the  lessor,  in  order  to  enable  him  to  give  the  livery. 
Betterworth's  case,  2  Rep.,  31. 

It  is  next  to  be  inquired  whether  the  deed  can  operate  under  the 
statute  of  uses,  the  effect  of  which  is  to  impart  efficacy  to  certain 
convevances  without  a  transmutation  of  possession. 

A  bargain  and  sale  is  a  contract  by  which  a  person  conveys  his 
land  to  another  for  a  pecuniary  consideration  ;  whence  a  use  arises 
for  the  bargainee,  and  the  statute  immediately  transfers  the  legal 
estate  and  possession  to  him  without  any  entry  or  other  act  on  his 


168  FORMATION    OF    CONTRACT. 

part.  For  want  of  a  pecuniary  consideration,  then,  it  is  perfectly 
clear  that  this  deed  can  not  operate  as  a  bargain  and  sale. 

Nor  can  it  operate  as  a  covenant  to  stand  seized  to  uses,  because 
it  is  essential  to  this  sort  of  conveyance,  that  the  consideration  be 
either  affection  to  a  near  relation  or  marriage.  The  love  and  af- 
fection which  a  man  is  supposed  to  bear  to  his  brothers  and  sis- 
ters, nephews  and  nieces,  and  heirs-at-law,  as  well  as  the  natural 
desire  of  preserving  his  name  and  family,  all  form  good  consid- 
erations. 

There  is  an  implied  obligation  subsisting  between  parent  and 
children,  who  are  considered  in  equity  as  creditors,  claiming  a 
debt  arising  from  the  duty  a  parent  is  under  to  provide  for  them. 
But  love  and  affection  to  an  illegitimate  child  is  not  a  sufficient 
consideration  to  raise  a  use  in  a  covenant  to  stand  seized. 

Where  a  person  covenanted  in  consideration  of  natural  love  and 
affection,  to  stand  seized  to  the  use  of  himself  for  life,  remainder 
to  A,  his  reputed  son  (who  was  illegitimate),  for  life,  etc.,  and 
also  covenanted  to  levy  a  fine  or  make  a  feoffment  for  further  as- 
surance, and  he  afterwards  made  a  feoffment  in  fee  to  the  covenan- 
tees, in  performance  of  his  covenant  to  the  same  uses,  it  was  re- 
solved that  no  use  arose  to  A,  the  bastard,  by  the  covenant,  for 
want  of  a  consideration.  Nor  could  he  take  anything  by  the  feoff- 
ment, it  being  only  made  for  further  assurance.     Dyer,  364,  p.  16. 

This  case  is  expressly  in  point,  and  its  authority  is  unques- 
tionable ;  wherefore,  there  must  be  a  judgment  for  the  plaintiff. 

A  good  consideration  is  such  as  that  of  blood,  or  of  natural  love  and 
affection,  where  a  man  grants  an  estate  to  a  near  relative,  heing  founded 
on  motives  of  generosity,  prudence  and  natural  duty.  2  Blk.,  297.  Re- 
lationship by  blood  or  marriage  is  a  good  consideration  and  is  sufficient 
in  a  covenant  to  stand  seized  to  uses.  Hatch  v.  Thompson,  14 — 411; 
Egerton  v.  Carr,  94—648.  As  distinguished  from  the  case  given,  a  con- 
veyance by  the  mother  to  an  illegitimate  child  is  good,  for  such  child 
may  by  our  statute  inherit  from  her.  Tvey  v.  Granberry,  66 — p.  228.  An 
executory  agreement  in  consideration  of  marriage,  where  the  parties 
covenant  to  make  provision  for  the  illegitimate  child  of  the  wife,  will  be 
enforced.     Kimbrough   v.   Davis,   16 — 71. 

See  1  Page  Cont.,  sec.  272;  Clark  Cont..  108:  6  Am.  &  Eng.  Encyc, 
679,  683;  Mordecai's  Lectures.  694;  Powell  v.  Morisey,  98—426;  Fink  v. 
Cox.  18  Johns.,  145.  9  A.  D.,  191;  Sullivan  v.  Sullivan.  122  Ky..  707,  92 
S.  \\  ..  ''66,  7  L.  R.  A.  (N.  S.),  156.  13  Ann.  Cas.,  163;  6  R.  C.  L.,  653. 

4.    Moral  obligation. 

(69)   HATCHELL  v.  ODOM,  Admrx., 

16   N.    C.  302—1837. 

This  was  an  action  of  assumpsit  upon  the  following  facts: 
The   plaintiff,   being  about    to   move   to  the  West,   purchased   a 
slave    of    defendant's    intestate    for   $584;    it    did    not    appear   that 
there  was  any  warranty  of   soundness,   nor  that  the  intestate  had 


CONSIDERATION. 


169 


fraudulently  represented  the  slave  to  be  sound.  After  the  plaintiff 
had  commenced  his  journey,  the  negro  failed  in  walking  from  a 
caries  of  the  bone  of  one  of  his  legs;  upon  which  the  plaintiff 
sent  him  back  to  one  Vaughan,  his  agent,  to  be  returned  to  the  in- 
testate. When  informed  of  these  facts,  the  intestate  desired 
Vaughan  to  return  the  negro  to  him,  and  promised  that  he  would 
either  cure,  or  have  him  cured,  or  would  otherwise  return  the 
price.  Vaughan  sent  the  slave  to  the  intestate,  who  placed  him 
under  the  care  of  a  physician.  It  was  proved  that  the  disease  very 
seriously  affected  the  value  of  the  slave;  that  after  an  operation, 
nature  sometimes  effected  a  cure,  but  such  a  result  was  unusual, 
and  not  expected.  The  negro  was  returned  to  the  intestate  in 
May,  1836,  and  the  action  was  brought  in  November  following, 
the  intestate  having  died  in  the  meantime. 

Counsel  for  defendant  moved  for  nonsuit,  because  the  promise 
upon  which  the  action  was  brought,  was  without  consideration,  but 
the  court  denied  the  motion.  The  counsel  then  asked  the  court  to 
instruct  the  jury  that  no  breach  was  shown,  because  sufficient  time 
had  not  elapsed  to  effect  a  cure  or  to  show  that  the  disease  was 
incurable,  and  this  was  refused.  His  Honor  instructed  the  jury 
that  the  intestate  was  entitled  to  a  reasonable  time  to  effect  a  cure ; 
that  if  he  neglected  to  attempt  it,  or  attempting  it  failed  to  suc- 
ceed, and  gave  up  the  attempt  as  hopeless,  or  if  the  disease  turned 
out  to  be  incurable,  a  reasonable  time  having  elapsed  for  a  cure, 
then  the  plaintiff  would  be  entitled  to  a  verdict. 

There  was  a  general  verdict  for  the  plaintiff,  and  defendant 
appealed. 

Gaston,  J.  .  .  .  The  point  mainly  relied  on,  in  the  argument 
by  the  plaintiff's  counsel,  was,  that  the  intestate  was  under  a  moral 
obligation  to  reimburse  the  plaintiff  and  this  obligation  constituted 
a  sufficient  consideration  to  make  the  intestate's  promise  binding  in 
law.  It  was  not  contended  that  he  was  under  a  legal  obligation 
to  make  reimbursement ;  for  the  sale  having  been  without  warranty 
and  without  fraud,  the  vendee  was  bound  in  law  to  bear  the  losses 
arising  from  defects  in  the  thing  sold.  Erwin  v.  Maxwell,  7  N.  C, 
241.  But  it  was  insisted  that  no  man  could  keep,  with  a  safe  con- 
science, the  price  of  an  article  sold  as  valuable  and  afterwards 
found  to  be  worthless ;  and  that  although  the  law,  while  the  obli- 
gation to  make  restitution  rests  only  in  conscience,  can  not  inter- 
pose to  compel  performance  of  the  duty,  yet  it  will  gladly  seize  on 
a  promise  to  perform  it,  and  uphold  it  as  binding.  It  is  always 
gratifying  in  the  administration  of  the  law  to  behold  it  enforcing 
the  precepts  of  natural  justice;  but  it  can  not  successfully  under- 
take to  compel  the  performance  of  all  of  them,  even  on  those  who 
have  expressly  assumed  to  perform  them.     There  are  many  duties 


170  FORMATION    OF    CONTRACT. 

to  our  fellow  men,  which  an  enlightened  conscience  recognizes,  that 
are  either  too  refined  to  he  discerned,  too  indefinite  to  he  pre- 
scribed, or  too  imperfect  to  he  enforced,  by  human  institutions,  or 
which  are  regulated  by  a  standard  of  morals  too  high  to  be  applied 
as  an  ordinary  instrument  for  measuring  legal  obligations.  Those 
duties  which  are  plain,  definite  and  positive,  and  which  can  be 
practically  enforced  in  the  business  life,  are  recognized  as  legal 
obligations,  and  undertaking  to  perform  them  is  raised  through  the 
fiction  of  an  implied  promise.  There  is,  however,  a  class  of  cases, 
where,  although  the  moral  obligation  may  be  plain  and  perfect,  and 
ordinarily  a  proper  subject  for  legal  enforcement,  yet  its  perform- 
ance can  not  be  compelled,  because  of  some  rule  of  public  policy, 
and  where  therefore  the  law  will  not  imply  a  promise.  If,  how- 
ever, in  these  cases  a  promise  be  afterwards  made,  when  the  inter- 
dict shall  have  been  removed,  so  that  allowing  legal  validity  to  the 
promise  will  not  conflict  with  the  rule,  there  is  no  longer  a  diffi- 
culty in  enforcing  it.  Thus  it  is  a  clear  moral  obligation  to  return 
money  which  has  been  borrowed ;  and  in  general  the  law  compels 
the  performance  of  the  duty.  From  principles  of  public  policy, 
however,  it  will  not  enforce  such  an  obligation  against  a  feme 
covert  or  an  infant,  because  it  denies  to  the  one  the  legal  capacity 
to  contract,  and  allows  it  to  the  other  only  to  a  very  limited  extent. 
But  if,  after  the  feme  covert  becomes  a  widow  and  the  infant 
attains  full  age,  they  distinctly  and  unequivocally  promise  to  pay 
what  they  would  have  been  bound  to  pay  but  for  the  protecting 
and  disabling  rule  of  law,  the  promise  is  regarded  as  binding  as  it 
would  have  been  had  there  been  no  such  rule.  In  these  cases  the 
express  promise  gives  an  original  cause  of  action,  although  there 
never  was  an  antecedent  legal  obligation  ;  not  merely  because  there 
was  a  former  moral  obligation,  but  because  there  was  a  former 
moral  obligation  which  would  have  had  legal  efficacy  but  for  tem- 
porary causes  removed  before  the  new  promise  was  made.  So  if 
a  certificated  bankrupt,  or  one  set  at  liberty  after  being  taken 
by  a  ca.  sa.,  promise  to  pay  his  former  creditor,  or  a  debtor  prom- 
ise to  pay  a  debt,  the  recovery  of  which  is  barred  by  the  statute 
of  limitations,  the  law  will  compel  the  performance  of  the  promise, 
founded  on  the  former  obligation,  because  it  was  once  a  complete 
legal  obligation,  and  it  is  distinctly  and  unequivocally  reassumed, 
when  there  is  no  rule  of  legal  policy  to  forbid  it.  Rut  it  is  be- 
lieved that  a  promise,  however  express,  must  be  regarded  as  nudum 
pactum,  and  not  binding  in  law,  if  founded  solely  on  considera- 
tions which  the  law  holds  altogether  insufficient  to  create  a  legal 
obligation  ;  and  from  which,  therefore,  it  refuses  to  raise  the  in- 
ference of  a  promise  against  any  person.  (See  note  to  3  Bos.  & 
Pul.,  p.  249,  and  the  cases  there  collected.)     The  result  of  all  the 


CONSIDERATION.  171 

cases  as  summed  up  in  the  note  referred  to,  is,  "an  express  prom- 
ise can  only  revive  a  precedent  good  consideration,  which  might 
have  heen  enforced  at  law  through  the  medium  of  an  implied 
promise,  had  it  not  heen  suspended  hy  some  positive  rule  of  law, 
but  can  give  no  original  right  of  action,  if  the  obligation  on  which 
it  is  founded  never  could  have  been  enforced  at  law,  though  not 
barred  by  any  legal  maxim  or  statute  provision."  This  summary 
expresses  the  rule,  we  think,  with  as  much  precision  as  can  be 
expected  on  a  subject,  where  there  is  an  excess  of  nice  learning, 
and  upon  which  there  have  been  many  decisions  which  it  is  diffi- 
cult to  reconcile  with  each  other.  It  has  been  adopted,  we  see, 
with  approbation  in  the  Supreme  Court  of  New  York,  in  a  case 
analogous  to  the  present — that  of  Smith  v.  Ware,  13  Johns.,  257. 

If  we  dismiss,  as  not  constituting  a  sufficient  consideration  for 
the  promise  of  the  intestate,  the  supposed  moral  obligation  incum- 
bent on  him  to  remunerate  the  plaintiff  for  his  unexpected  loss,  we 
can  see  in  neither  count  of  the  declaration  any  other  matters 
averred  constituting  such  a  consideration.  This  is  not  an  action 
to  recover  damages  for  an  injury  done  to  the  plaintiff's  property. 
It  is  not  an  action  on  mutual  promises,  but  simply  to  recover  a 
sum  of  money  promised  to  be  paid  under  certain  circumstances ; 
that  is,  if  a  cure  was  not  effected.  Now,  in  such  an  action,  it  is 
certainly  the  general  principle,  and  we  are  not  aware  of  any  excep- 
tion embracing  the  case  before  us,  that  the  consideration  necessary 
to  support  the  promise  must  be  some  act  or  omission  beneficial  to 
the  defendant  (or  accruing  to  a  third  person  at  the  defendant's 
request)  or  prejudicial  to  the  plaintiff.  Johnson  v.  Johnson,  10 
N.  C,  556. 

No  benefit  has  resulted  to  the  defendant's  intestate  from  being 
permitted  by  the  plaintiff  to  incur  the  expense  and  trouble  of  en- 
deavoring to  cure  the  plaintiff's  slave.  No  inconvenience  or  preju- 
dice has  been  occasioned  to  the  plaintiff.  The  slave  has  not  been 
injured — it  is  averred  only  that  he  has  not  been  cured.  No  loss 
of  service  is  charged  or  can  be  presumed,  for  the  declaration  avers 
that  the  slave  was  worthless  when  the  plaintiff  put  the  slave  into 
the  hands  of  the  defendant's  intestate  to  be  cured,  and  continues 
worthless. 

Whatever,  therefore,  might  be  the  character,  in  foro  conscientiac, 
of  the  intestate's  promise,  in  law  it  was  without  consideration  and 
void.  It  is  the  opinion  of  this  court  that  the  judgment  rendered 
below  must  be  reversed,  with  costs  to  the  appellant  in  this  court ; 
and  that  judgment  on  the  verdict  must  be  arrested. 

Per  Curiam.  Judgment  reversed. 

On  moral  obligation  as  consideration,  see,  Eastwood  v.  Kenyon,  11 
Ad.    &   E.,  438,  6   E.    R.    C,   23;    Lee   v.    Muggeridge,    5   Taunton,   36.    1 


172  FORMATION    OF    CONTRACT. 

E.  C.  L.  R.,  32;  Cook  v.  Bradley,  7  Conn.,  57,  18  A.  D.,  79;  Mills 
v.  Wyman,  3  Pick.,  207;  Shepard  v.  Rhodes,  7  R.  I.,  470,  84  A.  D.,  573; 
Trimble  v.  Rudy,  22  Ky.,  1406,  60  S.  W.,  650,  53  L.  R.  A,  353;  Muir 
v.  Kane,  55  Wash.,  131,  104  Pac,  153,  26  L.  R.  A.,  (N.  S.),  519;  Fergu- 
son v.  Harris,  39  S.  C,  323,  39  A.  S.  R.,  731;  6  R.   C.  L.,  667. 

See  also  1  Page  Cont.,  sec.  320;  Clark  Cont.,  109;  6  Am.  &  Eng. 
Encyc,  679,  and  notes.  See  also  Past  Consideration,  post.  The  cases 
there  cited  show  that  the  promise  of  a  married  woman,  void  during 
coverture,  will  not  be  sufficient  consideration  to  support  a  new  promise. 

Sec.  2.     Necessity  for  consideration. 

1.  Simple  contracts. 

(70)   JONES  v.  HOLLIDAY, 

11   Tex.,  412,  62   A.   D.,  487—1854. 

Action  by  Holliday  against  Jones  on  the  acceptance  of  the  fol- 
lowing order,  alleging  that  it  was  given  for  a  valuable  considera- 
tion:  "Mr.  Jesse  Jones.  Please  deliver  to  Mr.  Holliday  fifteen 
bales  of  cotton,  weighing  five  hundred  pounds  each,  by  the  first  of 
November,  and  oblige  Randolph  Foster.  September  26,  1851. 
Accepted.  J.  Jones."  The  defendant  demurred  to  the  petition 
because  it  did  not  allege  in  what  the  consideration  consisted,  but 
the  demurrer  was  overruled. 

Wheeler,  J.  The  question  is,  whether  to  entitle  the  plaintiff  to 
recover,  it  was  necessary  for  him  to  aver  and  prove  a  considera- 
tion for  the  order  on  which  the  suit  was  brought.  A  consideration 
is  essential  to  the  validity  of  a  simple  contract,  whether  it  be 
verbal  or  in  writing.  This  rule  applies  to  all  contracts  not  under 
seal,  with  the  exception  of  bills  of  exchange  and  negotiable  notes, 
after  they  have  been  negotiated  and  passed  into  the  hands  of  an 
innocent  indorsee.  2  Kent's  Com.  (5th  Ed.),  464.  In  contracts 
under  seal,  a  consideration  is  implied  in  the  solemnity  of  the  in- 
strument. And  bills  of  exchange  and  promissory  notes  are  of 
themselves  prima  facie  evidence  of  a  consideration,  and  in  this  re- 
spect are  distinguished  from  all  other  parol  contracts.  Mandeville 
v.  Welch,  5  Wheat.,  277.  As  to  all  other  contracts,  if  the  consid- 
eration be  not  expressed  or  admitted  in  the  writing,  it  must  be 
proved.  Arms  v.  Ashley,  4  Pick.,  71  ;  Tingley  v.  Cutler,  7  Conn., 
291.  All  contracts  are  by  the  law  distinguished  into  agreements 
by  specialty  and  agreements  by  parol.  If  they  be  merely  written 
and  not  specialties,  they  are  parol  contracts,  and  a  consideration 
must  be  proved.  Rann  v.  Hughes,  7  T.  R.,  350,  note  a;  People 
v.  Shall,  9  Cow.,  778 ;  Burnet  v.  Bisco,  4  Johns.,  235 ;  Thacher  v. 
Dinsmore,  5  Mass.,  301,  4  A.  D.,  61;  Brown  v.  Adams,  1  Stew., 
51,  18  A.  D.,  36;  Beverleys  v.  Holmes,  4  Munf.,  95. 

It  has  been  held  that  an  admission  in  a  contract  in  writing  that 


CONSIDERATION.  173 

it  was  made  for  a  valuable  consideration  is  prima  facie  evidence 
of  a  sufficient  consideration  to  support  it.  Wyatt  v.  Ribb,  16 
Me.,  394. 

In  the  present  case,  however,  the  writing  contains  no  such  ad- 
mission. Had  it  been  expressed  to  be  for  value  received,  that 
might  have  been  held,  as  an  admission,  sufficient  evidence  of  a 
consideration  to  support  the  judgment.     .     .     . 

In  declaring  upon  such  a  contract,  the  rule  under  the  common- 
law  system  of  pleading  is  that  the  consideration  upon  which  it  is 
founded  must  be  stated,  and  must  appear  to  be  legally  sufficient 
to  support  the  promise  for  the  breach  of  which  the  action  is 
brought.  The  declaration  must  disclose  a  consideration,  or  the 
promise  will  appear  to  be  a  nudum  pactum,  and  the  declaration 
will  consequently  be  insufficient.  1  Ch.  PL,  321  ;  Douglass  v. 
Davis,  2  McCord,  218;  Powell  v.  Brown,  3  Johns.,  100;  Burnet  v. 
Bisco,  4  Id.,  235  ;  Bailey  v.  Freeman,  Id.,  280.  On  principle,  the 
same  specialty  would  seem  to  be  required  by  the  rules  of  pleading 
which  we  have  adopted.     .     .     .  Reversed. 

2.    Contracts    under    seal. 
WALKER  v.  WALKER, 

Ante    (40). 

Nudum  pactum  applies  only  to  simple  contracts.  Deeds  need  no  con- 
sideration except  under  the  statute  of  uses  and  as  against  creditors  and 
purchasers  for  value.  Harrell  v.  Watson,  63 — 454;  Salms  v.  Martin, 
63—608;  Mosely  v.  Mosely,  87—69;  Love  v.  Harbin,  87—249;  Ivey  v. 
Granberry,  66 — 223;  Howard  v.  Turner,  125 — 107;  Springs  v.  Hanks,  27 
—30;  Hogan  v.  Strayhorn,  65—279;  Morris  v.  Pearson,  79—253.  An 
exception  to  the  rule  that  contracts  under  seal  need  no  consideration 
is  given  in  contracts  in  restraint  of  trade.  Clark  Cont.,  59.  This  seems 
to  be  based  upon  the  idea  that  the  restraint  is  only  incidental  to  the 
contract  by  which  the  other  party  acquires  an  interest  in  the  business 
to  be  protected,  and  its  enforcement  does  not  depend  upon  the  mere 
pecuniary  consideration,  but  upon  all  the  circumstances  of  the  case. 
7  Am.  &  Eng.  Encyc,  93;  24  Ibid.,  852,  853;  6  R.  C.  L.,  680;  Mitchell  v. 
Reynolds,  1  P.  Wms.,  181,  1  Smith,  L.  C,  70,  92  A.  D.,  754,  and  note. 
In  some  States  the  common  law  effect  of  a  seal  has  been  abolished, 
and  in  others  the  seal  is  made  presumptive  evidence  of  a  consideration. 
6  R.   C.   L.,  652. 

(71)  WOODALL  v.  PREVATT, 

45    N.    C,    199—1853. 

This  was  a  bill  in  equity,  which  stated  that  on  August  1,  1851, 
the  defendant,  brother  of  plaintiff's  wife,  executed  his  note  under 
seal,  and  delivered  the  same  to  the  plaintiff's  wife,  by  which  he 
promised  to  pay  the  plaintiff  the  sum  of  $250;  that  afterwards, 
and  before  any  part  of  said  money  had  been  paid,  the  defendant 
fraudulently  availing  himself   of   his   influence   over  the   plaintiff's 


1/4  FORMATION    OF    CONTRACT. 

wife,  persuaded  her  to  deliver  the  hond  to  him,  and  that  she  did 
so,  without  the  plaintiff's  knowledge  or  consent ;  that  the  bond  has 
thus  been  lost  or  destroyed,  and  that  the  defendant  refuses  to  re- 
deliver the  same,  or  another  for  a  like  amount.  The  bill  prays 
that  defendant  be  compelled  to  pay  the  amount.  The  defendant 
admits  making  the  bond  and  avers  that  it  was  made  for  a  certain 
scheme  well  known  to  the  parties,  which  scheme  had  failed,  and 
the  bond  was  given  up  in  accordance  with  their  plan  and  with  the 
knowledge  of  the  plaintiff. 

Pearson,  J.  (after  referring  to  the  pleadings).  The  case  was 
made  to  depend  upon  the  sufficiency  of  the  bill;  and  Mr.  Strange, 
the  counsel  for  the  plaintiff,  was  called  upon  to  support  the  propo- 
sition that  a  bill  to  enforce  the  collection  of  a  bond  need  not  con- 
tain an  allegation  of  a  consideration,  either  good  or  valuable.  For 
the  bill  before  us  does  not  allege  any  consideration,  but  avers  sim- 
ply that  the  defendant  executed  to  the  plaintiff  a  bond  for  $250, 
and  avoids  on  purpose  saying,  how  or  why,  or  under  what  circum- 
stances the  bond  was  given  ;  and  asks  a  decree  for  its  payment,  on 
the  ground  that  it  is  lost  or  destroyed. 

A  court  of  equity  never  interferes  except  when  the  thing  is 
done  and  a  right  is  vested,  so  as  to  entitle  the  party  to  have  the 
right  protected  unless  there  be  a  valuable  consideration  ;  that  is, 
when  the  one  party  has  been  benefited  or  the  other  has  suffered  a 
loss,  for  these  are  the  only  cases  which  affect  conscience.  Excep- 
tions are  made  under  peculiar  circumstances,  when  there  is  a  nat- 
ural, or,  as  it  is  termed,  a  good  consideration,  and  in  a  few  in- 
stances of  meritorious  consideration.  But  these  exceptions  prove 
the  general  rule.  To  affect  the  conscience  and  entitle  the  party 
to  the  aid  of  a  court  of  equity,  there  must  be  an  allegation  of  a 
consideration.  If  I  give  a  man  a  horse,  or  give  him  money,  the 
thing  is  done,  and  the  right  of  property  is  vested.  But  if  I  prom- 
ise to  give  him  a  horse  or  to  pay  him  money,  and  afterwards  see 
proper  not  to  do  so,  this  is  no  matter  which  affects  conscience  un- 
less there  be  a  consideration.  It  is  in  the  language  of  the  civil  law, 
nudum  pactum — a  naked  promise.  Mr.  Strange  conceded  the  gen- 
eral rule,  and  assumed  the  position,  that  while  in  law  a  seal  im- 
ports a  valuable  consideration  which  is  conclusive,  in  equity  a  seal 
only  raises  a  presumption  of  a  valuable  consideration,  which  may 
be  rebutted.  And  from  thence  he  inferred  that  when  it  is  set  out 
in  the  bill  (as  in  the  one  under  consideration),  that  the  note  is 
under  seal,  the  presumption  of  a  valuable  consideration  makes  an 
express  averment  of  the  fact  unnecessary.  The  expression  that 
"in  law.  a  seal  imports  a  valuable  consideration,"  which  is  a  very 
common  one.  is  accurate,  provided  the  meaning  is  properly  under- 
stood; which  is,  a  seal  gives  to  an  instrument  the  same  validity  at 


CONSIDERATION. 


175 


law  as  if  there  was  a  consideration.  It  amounts  to,  and  dispenses 
with  the  necessity  of  the  proof  of  a  valuable  consideration,  be- 
cause by  the  rules  of  the  common  law  everyone  is  conclusively 
bound  by  the  solemn  act  of  sealing  and  delivering  a  writing  as  his 
deed.  He  is  thereby  estopped,  and  shall  not  be  heard  to  say  that 
it  did  not  create  a  legal  obligation.  If  one  seals  and  delivers  a 
deed  of  gift  of  a  horse,  or  a  note  under  seal  for  the  payment  of 
a  sum  of  money,  expressing  in  the  face  of  the  writing,  that  it  is 
not  for  a  valuable  or  good  consideration,  but  simply  on  account  of 
friendship,  the  property  passes,  and  the  money  may  be  collected 
in  an  action  of  debt,  because  a  consideration  is  not  necessary  to 
the  validity  of  a  deed  at  common  law.  Walker  v.  Walker,  35 
N.  C,  335. 

The  idea  that  a  seal  imports,  that  is,  raises  a  presumption  of 
payment  of  a  valuable  consideration  in  a  court  of   equity,  is  not 
supported  by  a  single  case,  and  it  would  have  been  strange  if  such 
a  case  could  be  found,  for  the  idea  is  wholly  fallacious.     A  court 
of  equity  addresses  itself  to  the  conscience  of  the  parties,  and  of 
course  pays  no  respect  to   form,  and  disregards  even  the  solemn 
act  of  sealing  and  delivering,  and  looks  behind  all  forms  to  see  if 
there    be    a   consideration   binding   the   conscience    of    the   parties. 
What  tendency  has  the  mere  fact  of  a  seal  to  prove  the  payment 
of  a  valuable  consideration?     The  inference  of  the  payment  of  a 
valuable  consideration  can  be  drawn  with  as  much  force  of  reason- 
ing from  the  fact  of  the  writing,  or  of  the  signing,  or  of  the  de- 
livery of  the  paper,  as  from  the  fact  of  its  being  sealed.     But,  in 
truth,  neither  act  raises  a  presumption  of  the  payment  of  a  val- 
uable consideration,  without  which  a  court  of  equity,  except  under 
very  peculiar  circumstances,  never  interferes,  but  leaves  the  party 
to  such  relief  as  can  be  obtained  at  law. 

Mr.  Strange  then  insisted  that  the  contract  was  in  the  present 
case  executed  and  the  right  vested,  so  that  the  plaintiff  was  entitled 
to  the  protection  of  the  court,  without  reference  to  the  considera- 
tion;  and  he  suggested  this  case:  One  agrees  to  give  his  note 
under  seal  for  $250,  payable  in  six  months,  as  the  price  of  a  horse, 
which  is  then  delivered  to  him.  The  contract,  says  he,  is  executed 
—each  party  has  done  all  that  he  agreed  to  do.  That  is  true,  and 
it  would  make  no  sort  of  difference  whether  the  price  of  the  horse 
was  secured  by  a  note  with  a  seal  or  without  a  seal;  for  the  first 
contract  is  executed,  and  the  vendor  has  taken  a  note  of  the  ven- 
dee for  the  payment  of  the  price  at  a  future  day.  In  other  words, 
there  is  a  second  executory  contract.  It  is  not  necessary  to  pursue 
the  idea  any  further.  Suffice  it  to  say,  the  supposed  case  has  no 
application.  For  here  it  is  only  alleged  that  the  defendant  exe- 
cuted to  the  plaintiff  a  note  under  seal  for  $250,  and  we  declare 


176  FORMATION    OF    CONTRACT. 

our  opinion  to  be  that  a  court  of  equity  will  not  aid  one  who  does 
not  allege,  and  hold  himself  ready  to  prove  that  the  note  in  refer- 
ence to  which  he  seeks  aid  (although  it  may  be  under  seal),  was 
given  for  a  consideration  binding  upon  the  conscience  of  the  other 
party. 

(The  court  then  referred  to  a  distinction  between  bonds  and 
simple  contract  debts  in  the  settlement  of  estates,  which  distinction 
does  not  now  exist.) 

Per  Curiam.  Bill  dismissed. 

A  part  of  the  above  case  has  been  omitted,  because  not  material  to 
the    question    now   presented. 

See  also  Scott  v.  Jones,  75 — 112;  Buxly  v.  Buxton,  92 — 479;  Angier  v. 
Howard,  94 — 27;  Ducker  v.  Whitson,  112—44;  Webster  v.  Bailey,  118— 
193;  Boutten  v.  R.  R.,  128—337. 

3.    Negotiable    instruments. 

(72)  CAMPBELL  v.  McCORMAC, 
90    N.    C,    491—1884. 

This  was  a  civil  action  upon  a  promissory  note.  The  complaint 
alleged  that  the  defendant  executed  his  promissory  note  to  the 
plaintiff  for  $273.33,  and  that  no  part  thereof  had  been  paid.  The 
defendant  demurred  because  the  complaint  failed  to  state  facts 
sufficient  to  constitute  a  cause  of  action,  in  that  it  did  not  allege 
that  the  note  was  given  for  a  consideration  either  good  or  valua- 
ble.    Demurrer  was  overruled,  and  the  defendant  appealed. 

Ashe,  J.  At  the  common  law,  promissory  notes  were  not  nego- 
tiable, but  were  made  so  by  the  statute  of  3  and  4  Anne,  ch.  9, 
which  was  reenacted  in  this  State  by  the  Act  of  1762,  and  that 
act  was  amended  by  the  Act  of  1786,  which  declared  them  to  be 
negotiable,  whether  expressed  to  be  payable  to  order  or  for  value 
received.  Rev.  Stat.,  ch.  13,  sees.  1,  2;  Rev.  Code,  ch.  13,  sec.  1; 
The  Code,  sec.  41. 

All  such  notes  thus  made  negotiable  import  prima  facie  that 
they  are  founded  upon  a  valuable  consideration ;  and  while  such 
consideration  is  essential  to  their  support,  yet  it  is  not  necessary, 
in  an  action  upon  them,  for  the  plaintiff  to  aver  and  prove  such 
consideration  ;  yet  when  evidence  has  been  introduced  by  the  de- 
fendant to  rebut  the  presumption  which  they  raise,  the  burden  is 
thrown  upon  the  plaintiff  to  satisfy  the  jury  by  a  preponderance 
of  evidence  that  there  was  a  consideration. 

It  was  so  held  in  McArthur  v.  McLeod,  51  N.  C,  475,  where 
the  court  says :  "Although  notes  as  simple  contracts  require  a  con- 
sideration, it  has  long  been  settled  that  they  import  a  consideration 
prima  facie  from  the  holder,  so  as  to  throw  the  onus  on  the  other 


CONSIDERATION.  177 

side  to  show  the  want  of  a  consideration."  The  same  principle  is 
laid  down  in  Story  on  Promissory  Notes,  181,  where  it  is  said: 
"Between  the  original  parties,  and  a  fortiori  between  others  who 
by  endorsement  or  otherwise  become  bona  fide  holders,  it  is  wholly 
unnecessary  to  establish  that  a  promissory  note  was  given  upon  a 
consideration  ;  and  the  burden  of  proof  rests  upon  the  other  party 
to  establish  the  contrary,  and  to  rebut  the  presumption  of  validity 
and  value  which  the  law  raises  for  the  protection  and  support  of 
negotiable  paper."  To  the  same  effect  is  Daniel  on  Neg.  Inst., 
sec.   164,  and  Edwards  on  Bills,  217. 

The  demurrer  was  properly  overruled.  Let  this  be  certified  to 
the  Superior  Court  of  Robeson  County  that  the  defendant  may 
answer  the  complaint,  if  he  shall  be  advised  so  to  do,  otherwise  to 
abide  the  judgment  of  the  court. 

No  error.  Affirmed. 

At  common  law  a  promise  without  consideration  was  void;  a  con- 
sideration must  have  been  alleged  and  shown.  The  first  exception  was 
as  to  contracts  under  seal  and  of  record,  on  account  of  their  form. 
The  next  was  as  to  bills  of  exchange  and  promissory  notes,  which  were 
held  to  be  prima  facie  evidence  of  a  consideration.  The  execution  of  the 
note  imports  a  consideration,  as  does  the  endorsement.  The  possession 
and  the  introduction  of  the  note  in  evidence  by  the  endorsee  import  that 
he  obtained  it  in  due  course.  When  the  defendant  shows  fraud  or  other 
defense,  the  holder  must  prove  adequate  consideration  in  the  transfer. 
Meadows  v.  Cozart,  76 — 450;  Bank  v.  Burgwyn,  108 — 62;  Tredwell  v. 
Blount,  86—33;  Applegarth  v.  Tillery,  105—407;  Pugh  v.  Grant,  86—39; 
Bank  v.  Bridger,  98—67.  An  unsealed  note,  not  negotiable  in  form, 
given  for  "value  received,"  furnishes  sufficient  evidence  of  consideration. 
Stronach  v.  Bledsoe,  85—473;  but  a  consideration  must  be  shown  when 
it  does  not  appear  in  such  instrument.  Stamps  v.  Graves,  11 — 102;  Bur- 
bage  v.  Windley,  108—357;  Conservatory  v.  Dickinson,  158—207;  Carn- 
wright  v.  Gray,  127  N.  Y.,  92,  27  N.  E.,  835,  15  L.  R.  A.,  845;  Ginn  v. 
Dolan,  81  Ohio  St.,  121,  90  N.  E.,  141,  135  A.  S.  R.,  761. 

See  also  1  Page  Cont.,  sec.  279;  Clark  Cont.,  Ill;  6  Am.  &  Eng. 
Encyc,  763;  Mordecai's  Lectures,  989;  Revisal,  2172. 

4.    Gratuitous   employment. 

(73)   BROWN  v.  RAY, 

32  N.   C,   72,  51   A.   D.,  379—1849. 

This  was  an  action  on  the  case.  In  March,  1846,  the  defendant 
had  a  crib  of  corn,  containing  1,200  bushels.  The  sheriff  levied 
on  the  corn  under  execution,  and  sold  600  bushels  to  different  per- 
sons, in  lots  of  100  bushels  each,  and  the  plaintiff  bought  three 
lots.  After  the  sale  the  sheriff  said  that  it  was  his  duty  to  attend 
to  measuring  and  delivering  the  corn,  but  that  it  was  inconvenient 
for  him  to  do  so,  and  that  the  defendant  would  undertake  to  do 
this.  The  defendant  consented,  and  the  corn  was  left  in  his  crib, 
with  the  understanding  that  he  would  measure  and  deliver  it  to 
the  purchasers  as  they  called  for  it.     In  July,   1846,  the  plaintiff 


178  FORMATION    OF    CONTRACT. 

called  for  his  corn  and  defendant  refused  to  let  him  have  it,  and 
this  action  was  brought. 

The  court  charged  the  jury,  "that  to  entitle  the  plaintiff  to  re- 
cover, he  must  not  only  prove  a  promise  by  the  defendant  to  de- 
liver the  corn,  but  he  must  also  prove  a  consideration  to  support 
the  promise."  There  was  a  verdict  and  judgment  for  the  defend- 
ant, and  the  plaintiff  appealed. 

Pearson,  J.  As  an  abstract  proposition,  it  is  true  there  must 
be  a  consideration  to  support  a  promise,  but  to  make  the  charge  in 
this  case  pertinent  it  must  be  understood  that  the  Judge  assumed 
that  the  evidence  did  not  show  a  consideration.  In  this,  we  think, 
there  was  error,  for  in  our  opinion  the  evidence  did  show  a  con- 
sideration, and  the  jury  should  have  been  so  charged.  To  make 
a  consideration,  it  is  not  necessary  that  the  person  making  the 
promise  should  receive  or  expect  to  receive  any  benefit.  It  is  suffi- 
cient if  the  other  party  be  subjected  to  loss  or  inconvenience.  A 
trust  or  confidence  reposed,  by  reason  of  an  undertaking  to  do  an 
act.  is  held  to  be  a  sufficient  consideration  to  support  an  action  on 
the  promise  ;  as  if  one  voluntarily  undertakes  to  deliver  a  cask  of 
wine  safely  at  a  cellar,  although  he  is  to  receive  no  pay  for  it,  an 
action  will  lie  upon  the  promise,  if  he  be  guilty  of  negligence,  and 
</  fortiori,  if  he  retain  the  wine  and  refuse  to  deliver  it.  Coggs  v. 
Bernard.  2  Ray.,  909,  919.  Lord  Holt  says :  "The  owner's  trust- 
ing him  with  the  goods  is  a  consideration.  The  taking  the  trust 
upon  himself  is  a  consideration,  though  nobody  could  have  com- 
pelled him  to  undertake  the  trust.  As  he  entered  upon  it,  he  must 
perform  it." 

So,  in  this  case,  nobody  could  have  compelled  the  defendant  to 
undertake  to  measure  out  and  deliver  the  corn,  when  applied  for; 
but  as  the  trust  was  reposed  in  him,  and  he  kept  the  corn,  and 
undertook  to  deliver  it,  he  is  bound  to  do  so,  and  is  liable  to  this 
action  for  refusing,  whether  he  had  used  the  corn  or  still  had  it  in 
his  crib.  In  the  language  of  Lord  Holt,  "the  owner  trusted  him 
with  the  goods,  and  he  entered  upon  the  trust." 

But  for  this  promise  the  plaintiff  would  have  required  the  sheriff 
to  deliver  the  corn.  This  puts  the  plaintiff  to  inconvenience,  and 
there  is  an  expressed  trust,  and  an  undertaking  to  do  the  act.  If 
one  undertakes  to  lead  my  horse  to  Statesville,  and  turns  him 
loose  on  the  road  or  refuses  to  deliver  him,  he  is  liable,  although 
no  compensation  was  to  be  given;  for  he  has  entered  upon  the 
trust,  and  I  have  been  put  to  inconvenience  by  reason  of  his  under- 
taking. 

"The  confidence  induced  by  undertaking  any  service  for  another 
is  a  sufficient  legal  consideration  to  create  a  duty  in  the  perform- 
ance of  it."     Smith's   Leading  Cases,  1,  vol.,  169;  where  the  ques- 


CONSIDERATION.  179 

tion  is  fully  discussed  in  the  valuable  notes  of  Air.  Smith,  and  of 
the  American  annotators,  Hare  and  Walker. 

Per  Curiam.  Judgment  below  reversed,  and  a  venire  dc  novo 
awarded. 

To  the  same  effect  is  Robinson  v.  Threadgill,  35 — 39;  Bank  v.  Kenan, 
76—340;    Sprinkle    v.    Brimm.    144 — 401. 

A  promised  to  get  certain  drafts  for  B's  tobacco  and  credit  the  amount 
on  a  debt  which  he  held  against  B,  and  A  failed  to  get  the  money  or  the 
drafts;  the  court  held  that  A  was  liable  on  his  promise.  "An  under- 
taking to  do  anything  is  a  sufficient  consideration  provided  it  is  acted 
upon,  either  by  the  one  party's  entering  upon  the  trust,  or  by  the  other's 
relying  upon  him  to  do  so,  provided  loss  is  thereby  sustained.  Here  the 
plaintiff  trusted  the  defendant's  promise  to  get  the  drafts;  but  for  the 
promise  he  would  have  attended  to  the  business  himself."  Watkins  v. 
lames,   50 — 105.      (This   seems   to   go   beyond   the   ordinary   rule.) 

See  1  Page  Cont.,  sec.  303;  1  Parsons  Cont.,  448;  Clark  Cont..  Ill; 
Thorne  v.  Deas,  4  John.   (N.  Y.),  84;   19  Am.  &  Eng.   Encyc,  914. 

Sec.   3.     Adequacy  of  consideration. 

(74)    SHEPARD  v.  RHODES, 
7   R.   I..  470,  84   A.   D.,   573—1863. 

Bullock,  J.  The  count  demurred  to  states,  in  substance,  that 
the  plaintiffs  had  discharged  the  defendants  from  a  certain  debt 
then  due  and  owing  from  them  to  the  plaintiffs,  in  consideration 
of  dividends  to  be  received  from  the  proceeds  of  certain  effects 
assigned  by  the  defendants  ;  and  that  subsequent  to  such  discharge, 
the  defendants,  feeling  themselves  honorably  bound  to  pay  to  the 
plaintiffs  this  debt,  in  consideration  thereof  and  of  one  dollar  to 
them  paid,  made  the  following  new  promise,  to  wit,  to  pay  to  the 
plaintiffs  in  one  year  after  a  final  dividend,  any  difference  that 
might  then  exist  between  their  full  debt  and  interest  and  the 
amount  of  any  dividend  or  dividends  the  plaintiffs  might  have 
previously  received.  The  count  further  states  that  more  than  one 
year  has  elapsed  since  the  plaintiffs  received  notice  that  no  divi- 
dend would  be  paid  them  from  the  assigned  effects. 

This  statement  of  the  cause  of  action  shows,  in  effect,  two  sep- 
arate and  distinct  considerations  as  the  foundation  of  the  new 
promise:  1.  A  moral  consideration,  that  the  defendants,  notwith- 
standing their  discharge,  felt  themselves  in  honor  bound  to  pay  the 
plaintiff's  debt ;  and  2.  The  valuable  consideration  of  one  dollar, 
paid  to  the  defendants  by  the  plaintiffs  when  the  new  promise  was 
made.  (After  discussing  moral  obligation  as  a  consideration,  the 
court  proceeds.) 

Ordinarily,  courts  do  not  go  into  the  question  of  equality  or 
inequality  of  considerations ;  but  act  upon  the  presumption  that 
parties  capable  to  contract  are  capable,  as  well,  of  regulating  the 
terms  of  their  contracts,  granting  relief  only  when  the  inequality 


180  FORMATION    OF    CONTRACT. 

is  shown  to  have  arisen  from  mistake,  misrepresentation,  or  fraud. 
A  different  rule  would,  in  every  case,  impose  upon  the  court  the 
necessity   of   inquiring   into   and   of   determining  the   value  of   the 
property  received  by  the  party  giving  the  promise.     Such  a  course 
is  obviously  impracticable.     In  all  cases,  therefore,  where  the  as- 
sumption or  undertaking  is  founded  upon  the  sale  or  exchange  of 
merchandise  or  property,  or  upon  other  than  a  money  considera- 
tion, and  the  promise  has  been   deliberately  made,  the  law   looks 
no  further  than  to  see  that  the  obligation  rests  upon  a  considera- 
tion ;  that  is,  one  recognized  as  legal,  and  of  some  value.     But  the 
reason  of  the  rule  ceases,  and  hence  the  rule  ceases,  when  applied 
to  contracts  to  pay  money,  and  founded  solely  upon  a  money  con- 
sideration.    How  far  a  forbearance  to  sue,  or  the  giving  of  time 
or  the  mere  waiver  of  some  right,  may  support  a  promise,  we  do 
not  consider,  since  the  question  does  not  arise.     Nor  for  the  like 
reason  do  we  consider  how  far  the  rule  is  qualified  or  limited  by 
special   statutes   regulating  interest ;   or   in   that  class  of   contracts 
peculiar  to  the  law  merchant,  as  bottomry,   respondentia,  and  the 
course  of  exchange.     Aside  from  these  and  some  other  exceptions, 
at  common  law  a  contract   for  the  exchange  of  unequal  sums  of 
money  at  the  same  time,  or  at  different  times,  when  the  element 
of  time   is   no   equivalent,   is   not   binding ;   and   in   such   cases   the 
courts  may  and  do  inquire  into  the  equality  of  the  contract ;  for  its 
subject-matter,  upon  both  sides,  has  not  only  a  fixed  value,  but  is 
itself   the   standard   of   all   values ;   and   so,    for   the   difference    of 
value,  there  is  no  consideration.     In  this  principle  the  earliest  pro- 
hibitions— earlier  than  the  time  of  Alfred — and  the  later  legislative 
enactments   against   usury,   both   in   England   and   in   this   country, 
have   their   origin.      The   rule   is   deemed   to   be    founded   in   good 
policy. 

In  the  case  before  us  the  only  legal  consideration  the  defendants 
received  was  one  dollar,  for  which  they  engaged  to  pay  a  much 
larger  sum.  This  case  falls  therefore  within  the  principle  ad- 
verted to.  The  consideration  was  not  only  unequal,  but  grossly  so. 
It  was  a  mere  nominal  consideration  ;  if  even  received  by  the  de- 
fendants, it  was,  no  doubt,  regarded  as  such  by  them,  and  in- 
tended as  such  by  the  promisees.  It  was,  at  best,  purely  technical 
and  colorable,  and  obviously  is  wanting  in  that  degree  of  equitable 
equality  sufficient  to  support  the  promise  declared  upon.  The  de- 
murrer to  the  first  count  is  therefore  sustained. 

Mere  inadequacy  of  consideration  alone  is  not  sufficient  to  set  aside 
a  contract  at  law  or  in  equity,  but  it  is  a  cogent  circumstance  to  be 
considered  with  other  circumstances  indicating  fraud  and  imposition. 
Davis  v.  Kean,  142—496:  McLeod  v.  Rullard,  84 — 515;  Potter  v.  Everett, 
42—152;  Trust  Co  v.  Forbes,  120—355;  Monroe  v.  Fuchtler,  121—101; 
Osborne  v.  Wilkes,  108—651;  Barnett  v.  Spratt,  39—171;  Williams  v. 
Powell.   36—460;    Berry   v.    Hall.    105—154;    Gunter   v.   Thomas,   36—199; 


CONSIDERATION.  181 

Grier  v.  Thompson,  21 — 493;  Barnwell  v.  Threadgill,  56 — 50;  Orrender 
v.  Chaffin,  109—422;  Fulenwider  v.  Roberts,  20 — 420;  Leonard  v.  Power 
Co.,   155—6;  6  R.   C.   L.,  678. 

Inadequacy  alone  is  not  sufficient  to  set  aside  a  written  instrument, 
unless  it  is  so  gross  as  to  "shock  the  moral  sense"  and  cause  a  reasonable 
person  to  say  "he  got  the  property  for  nothing."  Dorsett  v.  Mfg.  Co., 
131 — 254.  But  it  is  not  necessary  that  the  "moral  sense  should  be 
shocked,"  any  other  terms  indicating  gross  disparity  would  be  sufficient. 
Williams  v.  Johnston,  82—288. 

As  to  inadequacy,  see  further  5  L.  R.  A.,  856;  12  L.  R.  A.,  463;  13  L.  R. 
A.,  581;  1  Page  Cont.,  sec.  522;  1  Parsons  Cont.,  473  et  seq.;  Clark  Cont., 
112;  Bispham  Equity,  330;  6  Am.  &  Eng.  Encyc,  694;  Mordecai's  Lec- 
tures, 700;  Seymour  v.  Delaney,  3  Cowen,  445,  15  A.  D.,  270;  Marks  v. 
Gates,  154  Fed.,  481,  14  L.  R.  A.  (N.  S.),  317. 

Exchange  of  fixed  values. — Where  the  law  has  fixed  the  value,  as  of 
money,  a  particular  sum  is  not  a  consideration  for  an  immediate  obli- 
gation to  pay  a  greater  sum.  Clark  Cont.,  Ill;  1  Parsons  Cont.,  474,  and 
note;  1  Page  Cont.,  sec.  323;  Bishop  Cont.,  sec.  410;  Walford  v.  Powers, 
85  Ind.,  294;  44  Am.  Rep.,  16;  Schnell  v.  Nell,  17  Ind.,  29. 

Celebrated  cases. — A  promise  to  give  another  a  grain  of  rye  on  Mon- 
day and  double  the  amount  every  Monday  for  a  year.  Thornborrow  v. 
Whitacre,  2  Ld.  Ray,  1164.  A  horse  sold  for  one  barleycorn  for  the  first 
nail,  and  double  for  each  nail  in  the  shoe.  James  v.  Morgan,  1  Lev., 
Ill,  6  Am.   &  Eng.   Encyc,  695,  and  note,  33  A.   R.   182,   note. 

Sec.  4.     Sufficiency  of  consideration. 

1.  Marriage. 

(75)  GURVIN  v.  CROMARTIE, 

33   N.   C,   174,   53   A.   D.,  406—1850. 

This  was  an  action  of  assumpsit  upon  the  following  facts : 
A  tract  of  land  was  devised  to  the  plaintiff  in  fee  simple,  but 
with  a  limitation  over  to  another  person,  in  case  the  plaintiff  should 
die  without  leaving  lawful  issue  surviving  him.  In  1843  the  plain- 
tiff sold  the  land  to  defendant's  testator  for  $1,000,  and  conveyed 
it  to  him  by  a  deed  of  bargain  and  sale  in  fee  with  general  war- 
ranty. After  the  deed  was  executed  the  testator  said  to  defendant, 
who  had  never  married,  "Now,  Charles,  be  smart  and  get  a  wife 
and  have  a  child,  and  I  will  give  you  $500."  In  December,  1844, 
the  plaintiff  married ;  and  upon  hearing  of  it,  the  testator  said  that 
he  was  bound  to  pay  the  $500,  if  the  plaintiff's  wife  should  have 
a  child.  In  February,  1846,  the  plaintiff's  wife  had  a  child,  and 
the  testator  being  then  dead,  the  plaintiff  gave  notice  to  the  de- 
fendant and  requested  payment ;  this  being  refused,  the  action  was 
brought. 

The  defendant  insisted  that  there  was  no  consideration  for  the 
promise ;  that  there  was  no  assent  to  the  contract  by  the  plaintiff ; 
that  the  plaintiff  had  not  married  and  had  issue  within  a  reason- 
able time ;  and  that  there  was  no  evidence  that  the  plaintiff  was  the 
father  of  the  child.  There  was  a  verdict  and  judgment  for  the 
plaintiff  for  $500  and  interest,  and  the  defendant  appealed. 


182  Formation   of   contract. 

RlFFin.  C.  J.  It  is  not  needful  to  consider  of  the  benefit, 
which  the  marriage  of  the  plaintiff  and  the  birth  of  issue  might 
have  been  to  the  testator  in  preventing  the  estate,  which  he  had 
purchased,  from  going  over  and  making  his  fee  absolute ;  since, 
without  doubt,  marriage  is  a  valuable  consideration,  and  sufficient 
to  support  a  contract,  whether  executed  or  executory.  It  is  gener- 
ally the  sole  consideration  on  which  marriage  settlements  are 
founded,  and  it  sustains  them  against  the  creditors  of  the  con- 
tracting parties  and  purchasers  from  them.  It  was  so  decided  by 
Lord  Clarendon  in  Douglass  v.  Ward,  1  Chan.  Cas.,  99 ;  and  in 
Brown  v.  Jones,  1  Atk.,  188,  Lord  Hardwick  said  that  a  settle- 
ment on  the  wife  before  marriage,  though  without  a  portion,  is 
good — for,  marriage  itself  is  a  consideration.  It  is  most  clearly 
so ;  for,  by  the  marriage,  the  respective  parties  incur  duties  and 
obligations  to,  or  in  respect  of  each  other,  and  the  one  acquires  in 
the  estate  of  the  other,  or  loses  in  his  or  her  own,  certain  rights, 
which  are  valuable  in  a  pecuniary  sense.  So,  mutual  promises  be- 
tween a  man  and  woman  to  marry  will  sustain  each  other,  and  the 
partv  violating  his  or  her  promise  is  liable  to  the  action  of  the 
other,  as  is  often  seen.  In  like  manner  a  promise  by  one  man  to 
another  to  pay  him  so  much,  in  consideration  that  he  will  marry 
a  certain  woman,  is  valid.  The  same  reasons  make  it  so,  upon 
which  a  marriage  settlement  is  upheld  upon  the  consideration  of 
the  marriage.  There  are  many  cases  of  actions  on  collateral  prom- 
ises to  one,  in  consideration  that  the  promisee  will  marry  a  third 
person.  In  Brown  v.  Garborough,  Cro.  Eliz.,  63,  the  promise  was 
to  a  woman,  that,  if  she  would  marry  one  R  B,  and  one  J  B 
should  not  assure  to  them  certain  land,  then  the  defendant  would 
pay  her  £100,  and  the  marriage  took  effect,  and  an  action  was 
brought  thereon  by  the  husband  and  wife.  After  verdict  for  the 
plaintiffs  on  iwu  assumpsit  it  was  moved  in  arrest  of  judgement, 
that  there  is  no  sufficient  consideration,  as  the  defendant  was  a 
stranger  to  the  feme.  But  the  court  gave  judgment  on  the  ver- 
dict, giving  as  one  reason  that  it  was  intended  the  woman  was 
induced  by  the  promisee  to  marry  R  B,  which  otherwise  she  would 
not  have  done,  and  peradventure  she  trusted  the  defendant  rather 
than  J  B.  Bradford  v.  Foder,  Cro.  Jac,  22S,  and  Berisford  v. 
Woodroff,  Ibid.,  404,  are  other  instances  in  which  similar  actions 
were  sustained.  It  is  true  that  in  those  cases  it  happened  that 
the  person  whom  the  plaintiff  was  to  marry,  was  a  relation  of  the 
defendant,  and  that  in  Browne  v.  Oarborough,  some  stress  was 
laid  on  that  circumstance.  But  it  is  quite  clear  that  was  not  mate- 
rial ;  for,  it  is  not  the  benefit  that  may  accrue  to  the  promisor  or 
his  relation  which  constitutes  the  consideration  in  such  a  case,  but 
the  liabilities  incurred  by  the  person  marrying  and  the  effects  the 


CONSIDERATION.  183 

marriage  may  have  on  his  or  her  estate,  real  or  personal.     Accord- 
ingly we  find  a  precedent,  2  Went.,  492,  in  which  the  declaration 
was  on  a  promise  to  pay  the  plaintiff  £7,  in  consideration  that  he 
would  marry  one  D  B,  who  then  had  a  bastard ;  and  there  is  an- 
other precedent,  2  Chit.   PL,  254,  in  which  the  declaration  is  on  a 
promise  to  pay  the  plaintiff  a  sum  named  for  marrying  one  E  F, 
without  otherwise  describing  her  as  of  kin  to  the  defendant,  or  as 
under  any  particular  discredit  or  disadvantage.     In  Ex  parte  Cot- 
trell,  Cowp.,  742,  a  person  gave  to  another  a  bond  to  pay  him  cer- 
tain  sums  by   installments,  in  consideration  that   he   would  marry 
a  woman,  by  whom  the  obligor  had  several  bastard  children,  and 
after  the  marriage  had,  the  obligor  became  bankrupt,  and  the  ques- 
tion was,  whether  the  obligee  could  prove  this  debt  under  the  com- 
mission.    A  case  was  sent  out  of  Chancery  to  the  Court  of  King's 
Bench  for  the  opinion  of  the  court  of  law.     The  court  interrupted 
the  counsel   for  the  creditor  by  inquiring  what  could  be  objected 
to  the  bond;  and  when  the  counsel  on  the  other  side  contended  that 
the  debt   could   not  be  proved,  because   it   was  not    founded  on   a 
good  consideration,  Lord   Mansfield  replied,  that  the  consideration 
was  good  between  the  parties,  as  it  was  a  stipulation  between  them 
in   consideration  of  marriage  ;  the  one  having  performed  his  part 
and    married   the    woman,    the   other   was   bound   to    perform    his. 
Those  cases  and  precedents  fully  establish  that  a  promise  to  pay  a 
man    for   marrying   a    particular   woman    will    maintain    an    action, 
after  the  marriage  had.     It  follows  that  a  promise  to  pay  him  for 
marrying  any  woman,  without  designating  one  in  particular,  is  like- 
wise valid  ;  for  there  is  no  perceptible  distinction  on  which  the  law 
can  give  an  action  in  the  one  case  and  not  in  the  other.     It  was 
argued,   indeed,  that   it   might   be  a   prejudice  to   one   to   marry   a 
particular  woman,  and  by  possibility,  in  such  a  case,  the  man  would 
not  have  married  her,  had  it   not  been   for  the  promise;   whereas 
marriage  generally  is  to  be  taken  to  be  to  the  party's  gratification 
and  benefit,  and,  when  he  is  left  at  large  to  his  own   free  choice, 
his  marriage  can  not  be  intended  to  be  to  his  disadvantage;  and 
therefore,  that  in  this  last  case  the  marriage  is  not  a  sufficient  con- 
sideration.    But  the  distinction  seems  to  be  entirely  untenable ;  for 
experience  proves,  even  when  the  parties  are  of  their  own  exclu- 
sive  selection,  marriage   may  or  may  not  be   judicious   or  happy. 
And  it  is  just  as  much  an  act  of  prudence   for  a  man  to  refrain 
from  marrying  any  woman  without  having  a  competent  livelihood 
for  himself,  his  wife,  and  a  family,  as  it  is  for  him,  under  those 
circumstances,  not  to  marry  a  particular  woman.     In  either  case 
he  may  be  induced  to  marry  or  not  to  marry  by  his  having  or  not 
having  a  reasonable  consideration.     But  the  law  does  not  inquire 
whether  the  partv  has  or  has  not  made  a  fortunate  match,  because 


184  FORMATION    OF    CONTRACT. 

it  is  not  the  adequacy  of  the  consideration  which  determines  the 
validity  of  the  promise,  but  it  is  the  doing  of  something  by  the 
party,  to  whom  the  promise  is  made,  and  it  is  a  familiar  elemen- 
tary principle  that  such  act,  however  trifling,  constitutes  a  suffi- 
cient consideration.  The  act  of  marriage  with  any  one  woman 
must,  in  this  point  of  view,  be  the  same  as  that  with  any  other ; 
and,  therefore,  as  far  as  the  objection  to  the  want  of  a  considera- 
tion affects  the  case,  the  instructions  to  the  jury  were  right. 

It  was  next  said  that  the  plaintiff  gave  no  such  assent  to  this 
promise  as  amounted  to  a  contract  between  the  parties,  on  which 
the  other  party  could  have  an  action  ;  and  so,  it  was  void  for  want 
of  mutuality.  That  is  but  presenting  the  last  objection  in  another 
aspect,  and  therefore  can  not  avail.  There  are  two  modes  of 
making  simple  contracts  and  declaring  on  them.  The  one  is,  when 
one  party  promises  to  do  a  certain  thing,  and  in  consideration  of 
that  promise  the  other  party  engages  to  do  something  on  his  part. 
Then,  as  nothing  is  done  but  the  making  of  the  promise,  it  is  abso- 
lutely necessary  that  mutual  valid  promises,  amounting  to  an  ex- 
press contract,  should  appear ;  otherwise,  one  of  the  parties  might 
claim  the  benefit  of  the  promise  of  the  other,  without  in  return 
doing  any  act  or  being  liable  for  any  loss  whatever.  And  in  such 
a  case  it  is  necessary  only  to  set  out  the  mutual  promises,  without 
averring  performance  on  the  part  of  the  plaintiff.  The  other  mode 
is,  when  one  party  promises,  in  consideration  that  the  other  will 
or  will  not  do  some  act.  Then  no  mutual  promise  need  be  set 
forth  or  exist ;  but  it  is  necessary  and  sufficient  to  show  the  act 
done.  It  is  not  requisite,  that  it  should  appear,  the  plaintiff  might 
have  been  sued  for  not  doing  the  act ;  for  he  may  recover  after 
the  thing  done,  though  it  was  at  his  election  whether  he  would  do 
it  or  not  up  to  the  moment  of  its  execution.  ...  It  was  not 
necessary,  therefore,  that  the  declaration  here  should  have  averred 
more  than  it  has,  or  that  there  should  have  been  any  engagement 
by  the  plaintiff  to  marry,  in  order  to  entitle  the  plaintiff  to  recover 
upon  his  marriage  and  the  birth  of  a  child. 

As  to  the  objection  that  these  things  were  not  done  in  a  reason- 
able time,  there  is  nothing  in  it.  The  contract  specified  no  time 
within  which  the  marriage  and  birth  of  issue  should  occur;  and, 
from  their  nature,  the  party  had  his  lifetime  to  perform  them,  and 
upon  performance  completed  could  claim  the  compensation  agreed 
on— at  least,  unless,  before  any  act  done  by  the  plaintiff  towards 
performance,  the  other  party  had  retracted  his  offer. 

The  last  ground  of  exception  was,  that  the  plaintiff  did  not 
prove  that  he  was  the  father  of  his  wife's  child;  and  to  that  was 
added  here,  that  an  inquiry  on  that  point  would  be  indecent,  and 
therefore,  also,  that  the  promise  ought  not  to  entitle  the  plaintiff  to 


CONSIDERATION.  185 

an  action.  The  answer  is,  that  there  is  legal  evidence  of  the  pater- 
nity of  the  child ;  as  it  is  a  matter  of  law  that  the  husband,  who 
cohabits  with  his  wife — and  nothing  to  the  contrary  was  suggested 
here — is  presumed  to  be  in  fact  the  father  of  the  wife's  issue. 
Then  as  to  the  notion  of  the  indecency  of  investigating  an  inquiry 
into  the  legitimacy  of  the  issue,  it  seems  to  the  court  to  be  entirely 
unfounded.  This  is  not  a  case  of  a  wager  between  two  persons 
upon  a  question  involving  the  feelings  of  others  or  naturally  cal- 
culated unnecessarily  to  produce  indecent  inquiries.  On  the  con- 
trary, it  is  a  promise  to  pay  one  a  certain  sum  in  consideration  of 
marrying  and  having  issue  of  the  marriage;  which  is  a  very  com- 
mon contingency,  upon  which  estates  devised  are  enlarged  or  de- 
feated, and  it  is  also  a  contingency  on  which  almost  all  the  lim- 
itations in  marriage  settlements  depend.  They  can  offend  the  feel- 
ings or  delicacy  of  no  one,  but  are  contingencies  naturally  con- 
nected with  the  proper  provisions  for  a  family,  and  therefore  they 
almost  always  give  rise  to  important  limitations  in  settlements. 
The  present  is  a  transaction  much  of  the  same  nature ;  whereby 
the  plaintiff,  who  was  single  at  the  time,  was  to  become  entitled 
to  demand  a  particular  sum  from  the  testator,  upon  his  future 
marriage  and  the  birth  of  issue. 

Per  Curiam.  Judgment  affirmed. 


A  father  makes  a  deed  to  his  daughter  and  her  intended  husband  as 
an  inducement  to  the  marriage;  this  is  a  valuable  consideration.  Arnold 
v.  Estis,  92 — 162.  An  agreement  by  the  father,  in  consideration  of 
the  marriage  of  his  illegitimate  daughter,  to  settle  all  his  property  on 
her  and  her  husband,  is  upon  sufficient  consideration.  Wall  v.  Scales, 
16 — 476;  see  also  Kimbrough  v.  Davis,   16 — 71. 

1  Page  Cont.,  sec.  299;  Clark  Cont.,  114;  6  Am.  &  Eng.  Encyc,  724; 
9  Cyc,  320;  6  R.  C.  L.,  653,  657;  Contracts,  Cent.  Dig.,  sec.  239;  Wins- 
low  v.  White,  163—29;  McNutt  v.  McNutt,  116  Ind.,  545,  19  S.  E.,  115, 
2  L.  R.  A.,  372;  Prewett  v.  Wilson,  103  U.  S.,  22;  Shadwell  v.  Shadwell. 
30  L.  J.  C.  P.,  145,  6  E.  R.  C.  9.  A  promise  by  a  man  to  support 
a  woman  if  she  will  release  him  from  the  promise  of  marriage,  is 
upon  a  valuable  consideration.  Henderson  v.  Spratlen,  44  Col.,  278,  98 
Pac,  14,  19  L.  R.  A.  (N.  S.),  655. 

2.  Mutual  promises. 

(76)   HOWE  v.  O'MALLY, 

5  N.  C,  287,  3  A.  D..  693—1809. 

In  1790  the  plaintiff  conveyed  to  the  defendant  by  deed  145 
acres  of  land,  part  of  a  tract  containing  366  acres,  purchased  from 
Clement  Hall.  In  1792  the  plaintiff  conveyed  to  defendant  an- 
other part  of  the  same  tract,  purporting  to  contain  221  acres,  "be 
the  same  more  or  less."  Each  tract  was  particularly  described  by 
metes  and  bounds,  and  together  constituted  the  Clement  Hall  tract, 
and  the  defendant  paid   for  the   same.      In   1806  the   parties  mu- 


186  FORMATION    OF    CONTRACT. 

tually  agreed  to  have  the  221-acre  tract  surveyed,  and  if  it  con- 
tained more  than  221  acres,  the  defendant  should  pay  to  the  plain- 
tiff the  sum  of  $10  per  acre  for  the  excess;  and  if  there  should  be 
less  than  221  acres  the  plaintiff  should  pay  the  same  to  the  defend- 
ant for  the  deficiency.  The  survey  was  made,  and  the  tract  was 
found  to  contain  87  acres  more  than  the  deed  called  for.  The 
defendant  refused  to  pay,  and  this  action  was  brought  for  $870. 

The  defendant  contended  that  the  agreement  was  invalid  unless 
it  existed  at  the  time  the  deed  was  made;  and  that  evidence  of  it 
now  contradicted  the  deed,  for  the  plaintiff  sold  all  the  interest 
he  had. 

The  plaintiff  contended  that  the  agreement  need  not  subsist  at 
the  time  the  deed  was  made ;  that  it  was  subsequent  to  the  deed 
and  independent  of  it,  and  that  the  mutual  promises  constituted  a 
sufficient  consideration. 

By  TiiR  Court.  Here  are  mutual  promises  ;  one  is  made  the 
consideration  of  the  other,  and  we  are  of  opinion  that  the  plain- 
tiff's promise  to  refund  in  the  event  of  a  deficiency  in  the  number 
of  acres,  is  a  good  consideration  to  support  the  defendant's  prom- 
ise to  pay,  should  there  be  more  acres  than  called  for  by  the  deed. 

judgment  for  the  plaintiff. 

Note. — The  facts  in  the  above  case  have  been  stated  briefly.  See  alsc 
Sherrill    v.    Hagan,   92—345. 

(77)   HOLT  v.  WELLONS, 

163  N.   C,  124,  79  S.   E.,  450—1913. 

This  was  an  action  for  breach  of  contract  to  sell  and  deliver 
cotton.  The  complaint  alleges  that  Keen  Co.  contracted  to  sell  to 
Austin-Stephenson  Co.  200  bales  of  cotton,  deliverable  on  Sep- 
tember 20,  and  October  20,  1907  ;  that  this  contract  was  assigned 
to  plaintiff  by  Austin-Stephenson  Co.,  and  that  Keen  Co.  failed 
to  deliver  the  cotton.  Keen  Co.  wrote  the  following  letter  to  Aus- 
tin-Stephenson Co.  in  March,  1907:  "This  is  to  confirm  sale  to 
you  of  200  bales  of  good  white  cotton,  f.  o.  b.  Four  Oaks,  N.  C, 
100  bales  to  be  delivered  20  September,  1907.  and  100  bales  to  be 
delivered  20  October,  1907,  at  10  cents  per  pound."  The  defend- 
ant is  the  receiver  of  the  Keen  Co. 

The  defendant  demurred  because  the  contract,  as  alleged  in  the 
complaint,  is  unilateral,  without  consideration,  and  void.  The 
demurrer  was  overruled,  and  there  was  a  verdict  and  judgment  for 
the  plaintiff,  from  which  defendant  appealed.  Affirmed. 

Walker,  J.  .  .  .  The  demurrer  was  properly  overruled.  The  con- 
tract, as  alleged  in  the  complaint,  was  not  unilateral  or  without 
consideration  or  void.     It  was  bilateral  and  bound  both  parties,  the 


CONSIDERATION.  187 

defendant  to  deliver  the  cotton  and  the  plaintiff  to  pay  the  price, 
and  for  this  reason  also  it  was  based  upon  a  sufficient  considera- 
tion, the  mutual  promises  of  the  parties  being  considerations  for 
each  other.  9  Cyc,  323.  The  promise  to  sell  and  deliver  the  cot- 
ton was  founded  upon  the  reciprocal  promise  to  pay  the  price  as 
its  consideration.  The  contract  is  not  void,  but  valid  on  its  face. 
It  is  argued  that  the  plaintiff  is  bound  by  the  form  of  the  con- 
tract as  contained  in  the  letter  copied  into  the  complaint.  If  this 
be  so,  it  does  not  help  the  defendant.  The  contract  is  still  not 
unilateral,  a  nudum  pactum,  or  otherwise  void  on  its  face,  but,  on 
the  contrary,  is  apparently  valid  and  binding.  The  letter  merely 
confirmed  the  sale,  implying  that  one  had  already  been  made,  and 
its  validity  was  then  recognized. 

Two  sisters  owning  a  note  in  common  agree  that  the  survivor  shall 
have  the  whole  note;  the  mutual  promises  are  sufficient  consideration. 
Taylor  v.  Smith,  116—538. 

A  promise  to  take  lumber  for  a  vessel  and  a  promise  to  furnish  the 
lumber  constitute  a  consideration  for  each  other.  Whitehead  v.  Potter. 
26 — 257.  Mutual  promises  to  do  several  things  specified  in  a  contract  on 
one  side  and  on  the  other,  constitute  a  valuable  consideration.  Puffer  v. 
Lucas,  101 — 281.  A  employed  B  to  work;  B  found  out  afterwards  that 
the  work  was  for  C,  but  went  on  with  the  contract;  the  mutual  promises 
would  sustain  the  contract.  Forney  v.  Shipp,  49 — 527.  A  agreed  to  hire 
certain  slaves  to  B,  and  B  agreed  to  pay  for  them  and  give  a  bond  for 
payment  and  for  their  return;  B  called  for  the  slaves  and  offered  to 
give  the  bond,  and  A  refused  to  furnish  them;  A  was  bound  by  the 
contract.  Abrams  v.  Suttles,  44 — 99.  An  executory  contract  not  per- 
formed in  whole  or  in  part,  may  be  discharged  by  mutual  agreement 
without  any  new  consideration.  Brown  v.  Lumber  Co.,  117 — -287;  Bank 
v.  Bridger,  98 — 67.  Mutual  agreements  in  writing  to  have  partition  of 
land  will  be  enforced.  Sumner  v.  Early,  134 — 233.  An  agreement  to 
submit  a  matter  in  controversy  to  the  judge  and  abide  by  his  decision, 
with  a  forfeiture  of  $100  for  failure  to  comply,  is  made  on  a  valid  con- 
sideration. Pendleton  v.  Electric  Light  Co..  121 — 20.  In  order  to  make 
a  contract  binding,  there  must  be  mutual  promises;  or  if  unilateral,  then 
some  consideration  moving  from  one  party  to  the  other.  Rankin  v. 
Mitchem,  141— p.  283.  Cotton  Mills  v.  Mfg.  Co.,  125—329;  Kirkman  v. 
Hodgin,  151—588;  Buckingham  v.  Ludlum,  40  N.  J.  Eq.,  422;  Stovall  v. 
McCutchen  Co.,  107  Ky.,  577,  54  S.  W..  969,  47  L.  R.  A.,  287  (agreement 
between  merchants  to  close  stores  at  6  o'clock). 

See  also  1  Page  Cont,  sec.  296;  1  Parsons  Cont.,  486;  Clark  Cont.,  117; 
6  Am.   &   Eng.   Encyc,  727  and  notes;  6  R.   C.   L.,  676. 

(78)  AM.  STEEL  &  WIRE  CO.  v.  COPELAND, 

159  N.  C.  556,  75  S.  E..  1002—1912. 

This  was  an  action  by  the  plaintiff  to  recover  $610,  the  price  of 
a  carload  of  wire  shipped  to  the  defendant.  The  defendants  ad- 
mitted the  purchase  of  the  wire,  but  set  up  a  counterclaim  of  $650 
as  damages  for  breach  of  contract  by  the  plaintiff.  The  defend- 
ants were  supply  merchants  and  were  selling  a  certain  kind  of 
wire  ;  the  plaintiff's  a^ent  wished  them  to  sell  wire  manufactured 
by  the  plaintiff;  the  defendant  stated  that  he  did  not  care  to  pnr- 


188  FORMATION    OF    CONTRACT. 

chase  any  wire  from  the  plaintiff  unless  they  could  get  all  they 
wanted ;  that  they  could  sell  a  carload  a  month,  or  at  least  five 
or  six  a  year,  and  probably  more.  Thereupon  the  plaintiff's  agent 
agreed  that  the  plaintiff  would  furnish  to  the  defendants  all  the 
wire  that  they  wanted  for  their  trade.  In  pursuance  of  this  agree- 
ment, the  defendants  sent  an  order  for  one  carload  of  wire,  which 
was  sent,  and  sold  out  in  two  or  three  weeks  ;  another  carload  was 
ordered,  and  the  plaintiff  refused  to  send  it,  and  upon  defendant's 
refusal  to  pay  for  the  first  car,  brought  this  action.  There  was 
evidence  of  loss  of  profits  as  damages,  and  the  jury  allowed  the 
defendant  $300.     The  plaintiff  appealed.  Affirmed. 

Allen,  J.  .  .  .  The  principal  question  debated  between  coun- 
sel ..  .  is,  whether  the  agreement,  as  proven  by  the  defend- 
ants, is  wanting  in  mutuality  or  is  so  uncertain  that  it  can  not  be 
enforced.  We  have  said  at  this  term,  in  Elks  v.  Ins.  Co.,  p.  619, 
that  a  contract  must  be  definite  and  certain,  or  capable  of  being 
made  so  ;  and  the  plaintiff  contends  that  under  this  rule  an  agree- 
ment on  its  part,  if  made,  to  furnish  all  the  wire  the  defendants 
might  want,  would  be  too  indefinite  to  create  an  enforcible  contract. 

The  authorities  are  not  in  harmony  on  this  question ;  some  sus- 
taining in  whole  or  in  part  the  contention  of  the  plaintiff,  as  in 
Bailey  v.  Austrian,  19  Minn.,  535  ;  Tarbox  v.  Gotzion,  20  Minn., 
139;  Drake  v.  Vorse,  52  Iowa,  419;  R.  R.  v.  Bagley,  60  Kans., 
425;  Harrison  v.  L.  Co.,  45  S.  E.  R.,  731  (Ga.)  ;  while  others 
hold  to  the  contrary  view. 

A  contract  was  sustained  in  Furniture  Co.  v.  Manufacturing 
Co.,  110  111.,  427,  to  supply  all  the  pig  iron  which  the  party  should 
need,  use,  or  consume  in  his  business  ;  in  Cooper  v.  Wheel  Co.,  94 
Mich.,  272,  to  furnish  such  quantity  of  wheels  as  he  may  require 
during  a  certain  season  ;  in  Smith  v.  Moore,  20  La.  Ann.  220,  to 
furnish  all  the  ice  they  might  require  for  two  hotels  for  five 
years  ;  in  L.  Co.  v.  Coal  Co.,  160  111.,  85,  to  furnish  the  coal  com- 
pany its  requirements  of  coal  for  a  certain  season  ;  in  Doiley  v. 
Can  Co.,  128  Mich.,  591,  to  furnish  all  the  tin  cans  that  plaintiff 
might  use  in  his  factory  for  a  stated  time ;  and  in  Wells  v.  Alex- 
ander, 130  N.  Y.,  642,  to  furnish  the  coal  needed  for  steamers 
during  one  year. 

These  authorities  would  justify  us  in  sustaining  the  agreement 
as  a  valid  contract,  binding  between  the  parties,  at  the  time  the 
agreement  was  made;  but  it  is  not  necessary  to  go  so  far,  as  it 
appears  that  after  the  shipment  of  one  car,  the  defendants  or- 
dered another,  which  the  plaintiff  refused  to  deliver,  and  the  evi- 
dence as  to  the  amount  of  damages  Avas  directed  to  the  loss  of 
sales  from  this  car,  and   Mis  Honor  restricted  the  recoverv  to  the 


CONSIDERATION.  189 

profits  that  would  have  been  made  on  sales  to  customers  who  ap- 
plied for  the  wire  and  could  not  get  it. 

In  any  event,  the  agreement  constituted  a  continuing  offer  to 
sell,  on  the  part  of  the  plaintiff,  which  when  accepted,  before  the 
withdrawal  of  the  offer,  became  effective  as  a  contract,  and  the 
order  for  the  second  car  was  an  acceptance  of  the  offer  pro  tanto. 

This  was  decided  in  R.  R.  v.  Witham,  9  C.  P.,  19,  and  is  ap- 
proved in  Clark  on  Contracts,  119-120;  1  Page  Con.,  sec.  307; 
Bish.  Con.,  sec.  78.  The  case  from  the  Court  of  Common  Pleas 
is  summarized  in  Bishop,  supra,  as  follows:  "In  one  case  parties 
agreed  that  one  of  them  should  supply  the  other  during  a  desig- 
nated period  with  certain  stores,  as  the  latter  might  order.  He 
made  an  order,  which  was  filled;  then  made  another,  which  was 
declined ;  and  on  suit  brought  the  defendant  rested  his  case  on  the 
lack  of  mutuality  in  the  contract,  which,  he  contended,  rendered 
it  void.  Plainly  it  stood,  in  law,  as  a  mere  continuing  offer  by  the 
defendant,  but  when  the  plaintiff  made  an  order  he  thereby  ac- 
cepted the  offer  to  the  extent  of  the  order,  and  it  was  too  late  for 
the  other  to  recede.  So  judgment  went  for  the  plaintiff."  (The 
court  then  discusses  the  question  of  profits  as  damages.) 

No  error. 

A  contract  for  the  future  delivery  of  personal  property  is  void,  for 
want  of  consideration  and  mutuality,  if  the  quantity  to  be  delivered  is 
conditioned  by  the  will,  wish,  or  want  of  one  of  the  parties;  but  it 
may  be  sustained  if  the  quantity  is  ascertainable  otherwise  with  reason- 
able certainty.  An  accepted  offer  to  furnish  or  deliver  such  articles 
as  shall  be  needed,  required,  or  consumed  by  the  established  business 
of  the  acceptor  during  a  limited  time,  is  binding  and  may  be  enforced, 
because  it  contains  the  implied  agreement  of  the  acceptor  to  purchase 
all  the  articles  that  shall  be  required  in  conducting  his  business  during- 
this  time.  Wells  v.  Alexander,  130  N.  Y.,  642,  29  N.  E.,  142,  15  L.  R.  A., 
218;  Cold  Blast,  etc.,  Co.  v.  Kansas  City  Bolt  Co.,  114  Fed  77,  3/  L  R. 
A.,  696:  Mclntyre  Lumber  Co.  v.  Jackson  Lumber  Co.,  165  Ala.,  268.  51 
So  767  138  A.  S.  R.,  66;  Walker  Mfg.  Co.  v.  Swift  &  Co.,  200  Fed.,  529, 
43  "L  R.  A.  (N.  S.),  730:  Pollock  Cont.,  196;  9  Cyc,  323;  6  R.  C.  L..  686. 

Tn  bilateral  contracts  the  obligation  may  arise  only  on  certain  con- 
ditions, but  there  must  be  mutuality  of  obligation.  A  offers  to  furnish  at 
a  certain  price  such  goods  as  B  may  order,  and  B  offers  to  pay  at  such 
price  for  such  goods  as  he  may  order,  there  is  no  contract,  for  B  has  not 
promised  to  order  anything;  but  if  B  orders  before  A  withdraws  his  offer, 
A  is  bound  to  sell  at  the  price  named.  But  if  A  offers  to  supply  at  a 
certain  price  all  the  goods  of  a  certain  kind  that  B  may  need  in  his 
business  for  a  specified  time,  and  B  promises  to  buy  such  goods  the 
promises  are  binding,  and  A  must  furnish  them  and  B  buy  them  if  tie 
needs  them.  Clark  Cont.,  pp.  119,  120,  citing  Cooper  v.  Wheel  Co.,  94 
Mich..  272.  and  other  cases;  Harriman  on  Cont.,  sec.  105,  questions  the 
reasoning  in  this  case.  The  same  question  is  presented  in  1  Page  on 
Cont..  sees.  307,  308:  31  L.  R.  A..  529:  47  L.  R.  A.,  427;  57  L.  R.  A..  696; 
61  L.  R.  A..  402:  7  Am.  &  Eng.  Encyc,  117. 


190  formation   ok  contract. 

3.     Voluntary  subscription. 

(79)   BAPTIST  FEMALE  UNIVERSITY  v.  BORDEN, 

132  N.  C,  476,  44  S.  E.,  47—1903. 

The  defendant's  intestate  made  a  subscription  of  $1,000  to  the 
Baptist  Female  University  for  the  purpose  of  aiding  in  the  pay- 
ment of  certain  debts  already  created ;  the  testator  died  before  any 
part  of  this  subscription  was  paid,  and  in  his  will  he  gave  a  legacy 
to  this  institution.  The  question  was,  whether  this  subscription 
could  be  enforced  against  his  estate. 

Connor,  J.  .  .  .  The  decision  of  this  question  is  dependent 
upon  the  solution  of  the  question  whether  there  be  any  considera- 
tion to  support  the  promise  to  give  $1,000  to  the  Baptist  Female 
University.  It  is  well  settled  by  a  long  line  of  authorities  that  "a 
simple  contract  is  incapable  of  becoming  the  subject  of  an  action 
unless  supported  by  a  consideration."  Smith  on  Contracts,  106. 
This  is  elementary  and  needs  no  citation.  We  find  a  very  satis- 
factory definition  of  a  valuable  consideration  in  the  case  of  Curry 
v.  Mislar,  10  Exc,  153:  "A  valuable  consideration,  in  the  sense 
of  the  law,  may  consist  either  in  some  right,  interest,  profit,  or 
benefit  accruing  to  one  party,  or  some  forbearance,  detriment,  loss 
or  responsibility  given,  suffered  or  undertaken  by  the  other."  See 
Clark  on  Contracts,  sec.  64. 

We  find  from  a  careful  examination  of  the  numerous  cases 
which  have  been  decided  by  the  courts  of  the  Union,  a  division  of 
opinion.  Among  the  earliest  is  the  case  of  Stewart  v.  Trustees  of 
Hamilton  College,  2  Denio,  403.  Chancellor  Walworth  uses  the 
following  language :  "As  a  subscription  of  a  single  individual 
agreeing  to  make  a  donation  to  another  individual  or  a  corporation 
for  the  benefit  of  the  donee  merely,  I  should  find  great  difficulty 
in  finding  a  valid  consideration  to  sustain  a  promise  to  give  with- 
out any  equivalent  therefor,  and  without  any  binding  agreement  on 
the  part  of  the  donee  to  do  anything  on  his  part  which  would  be 
a  loss  or  injury  to  him.  .  .  .  There  is  no  difficulty  in  my  mind 
in  finding  a  good  and  sufficient  consideration  to  support  a  sub- 
scription of  this  kind  made  by  several  individuals.  Every  member 
of  society  has  an  interest  in  supporting  an  institution  of  religion 
and  learning  in  the  community  where  he  resides.  And  when  he 
consents  to  become  a  subscriber  with  others  to  raise  a  fund  for 
thai  purpose,  the  real  consideration  for  his  promise  is  the  promise 
which  others  have  already  made  or  which  he  expects  them  to  make 
to  contribute  to  the  same  object.  In  other  words,  the  mutual 
promises  of  the  several  subscribers  to  contribute  toward  the   fund 


CONSIDERATION.  191 

to  be  raised  for  the  specified  object  in  which  all  feel  an  interest, 
are  the  real  consideration  of  the  promise  of  each.  For  this  pur- 
pose also  the  various  subscriptions  to  the  same  paper  and  for  the 
same  object,  although  in  fact  made  at  different  times,  may  in  legal 
contemplation  be  considered  as  having  been  made  simultaneously. 
The  consideration  of  the  promise  therefore  is  not  any  considera- 
tion of  benefit  received  by  each  subscriber  from  the  religious  or 
literary  corporation  to  which  the  amount  of  his  subscription  is 
made  payable,  nor  is  his  promise  founded  upon  any  consideration 
of  injury  which  the  payee  has  sustained  or  is  to  sustain,  or  be  put 
to  for  his  benefit.  But  the  consideration  of  the  promise  of  each 
subscriber  is  the  corresponding  promise  which  is  made  by  other 
subscribers.  Mutual  promises  have  always  been  held  sufficient  as 
between  the  parties  to  sustain  the  promise  of  each.  And  it  has 
also  been  the  settled  law  from  the  time  of  the  decision  in  the  case 
of  Dutton  v.  Pool,  Freeman  Law  Report,  471,  in  1678,  down  to 
the  present  time,  that  a  party  for  whose  benefit  a  promise  is  made 
may  sue  in  assumpsit  upon  such  promise,  although  the  considera- 
tion therefor  was  a  consideration  between  the  promisor  and  a  third 
person." 

In  the  case  of  the  Trustees  of  Dartmouth  College  v.  Woodard, 
4  Wheat,  518,  Chief  Justice  Marshall,  speaking  of  the  contribu- 
tions to  the  funds  of  that  institution,  says:  "These  gifts  were 
made,  not  indeed  to  make  a  profit  to  the  donors  or  their  posterity, 
but  for  something  in  their  opinion  of  inestimable  value,  for  some- 
thing which  they  deemed  a  full  equivalent  for  the  money  with 
which  it  was  purchased.  The  consideration  for  which  they  stipu- 
lated is  the  perpetual  application  of  the  fund  to  its  object  in  the 
mode  prescribed  by  themselves." 

In  Congregational  Society  v.  Perry,  6  N.  PL,  164,  25  Am.  Dec, 
455,  it  is  held :  "Where  several  agree  to  contribute  to  a  common 
object,  which  they  wish  to  accomplish,  the  promise  of  each  is  a 
good  consideration   for  the  promise  of  the  others." 

In  Norton  v.  Janvier,  5  Harrington,  348,  Booth,  C.  J.,  says: 
"The  law  will  not  enforce  a  mere  gratuitous  or  voluntary  promise 
made  without  consideration.  But  the  question  is  what  is  a  merely 
gratuitous  promise.  If  a  subscription  be  made  to  a  common  ob- 
ject on  condition  that  such  object  is  accomplished,  or  sufficient 
money  be  raised  to  effect  that  object,  and  that  condition  is  per- 
formed, an  obligation  to  pay  would  be  perfect  and  may  be  en- 
forced by  a  suit  at  law." 

In  Wayne  &  Ont.  Coll.  Inst.  v.  Smith,  36  Barb.,  576,  the  court 
uses  the  following  language:  "I  am  by  no  means  satisfied  that,  in 
this  country  where  all  our  religious,  educational  and  charitable 
institutions  are   founded  bv  voluntarv  associations  and   dependent 


192  FORMATION    OF    CONTRACT. 

upon  private  liberality,  the  personal  benefit  to  be  derived  from  the 
erection  of  a  church  edifice  for  worship  by  himself  and  family,  or 
the  erection  of  an  academy  or  other  institution  of  learning  in  his 
immediate  neighborhood  for  the  education  of  his  children,  are  not 
works  involving  a  sufficiency  of  private  interest  to  every  citizen 
and  of  pecuniary  benefit  to  maintain  a  promise  expressly  and  dis- 
tinctly made,  received  and  acted  upon  in  the  erection  of  buildings 
for  such  purposes."  It  is  conceded  by  the  court  in  this  case  that 
this  view  has  not  been  adopted  in  most  of  the  cases,  and  we  <|iiote 
it  for  the  purpose  of  showing  the  line  of  thought  passing  through 
the  judicial  mind  upon  this  question  many  years  ago. 

In  Williams  College  v.  Danforth,  12  Pick.,  541,  Chief  Justice 
Shaw,  in  speaking  of  a  subscription  made  by  several  to  a  common 
object,  says:  "In  this  case  there  is  an  express  contract  between 
parties  capable  of  contracting  upon  mutual  stipulations,  each  hav- 
ing an  interest  in  the  stipulations  of  the  others,  and  these  stipula- 
tions being  such  as  might  be  enforced  by  judicial  process.  The 
subscription  in  the  first  instance  was  in  the  nature  of  a  proposal 
to  the  college,  by  its  terms  not  binding  till  accepted,  and  before  ac- 
ceptance revocable.  But  when  the  college  accepted  it  they  bound 
themselves  to  the  performance  of  the  conditions.  The  conditions 
were  that  they  should  apply  the  money,  principal  and  interest,  to 
the  general  literary,  scientific  and  religious  purposes  of  the  insti- 
tution, at  Williamston,  in  which  the  defendant,  with  the  other 
subscribers,  declared  they  had  an  intere-t.  .  .  .  These  were  then 
mutual  and  independent  promises,  and,  according  to  a  well  known 
rule  of  law,  such  promises  are  mutual  considerations  for  each 
other."  This  action  was  brought  upon  subscription  paper  signed 
by  the  defendant  with  others.  There  were  certain  conditions  upon 
which  the  money  was  to  be  paid. 

In  Doyle  v.  Glasscock,  24  Tex.,  200,  the  court  says:  "The  case 
thus  disclosed,  we  understand  to  be  this:  The  plaintiff  was  one 
of  a  committee  to  raise  money  for  the  purchase  of  a  site  for  the 
lunatic  asylum  ;  he  applied  to  the  defendant  and  received  his  sub- 
scription, and  on  the  faith  of  it  (or  the  committee  of  which  he 
was  one),  made  the  purchase,  and  he  advanced  the  money,  and 
now  calls  on  the  defendant  in  consideration  of  the  premises  to  pay 
his  subscription."     The  court  held  that  the  plaintiff  could  recover. 

In  Maine  Cent.  Inst.  v.  Haskell,  7?>  Me.,  140,  Dan  forth,  J., 
says:  "But  we  are  not  prepared  to  admit  that  the  subscription 
paper  in  this  case  'is  a  bare  naked  promise'  without  any  considera- 
tion whatever.  It  is  true  no  consideration  was  actually  received 
at  the  time  of  signing,  but  one  is  plainly  implied,  if  not  expressed, 
from  the  language  used.  The  promise  was  of  money  for  a  >peci- 
fied   purpose   'to  make  up  the  building   fund    for   -aid    institution.' 


CONSIDERATION.  193 

The  promise  was  made  to  a  different  payee  by  name,  one  legally 
competent  to  take,  incorporated  for  the  express  purpose  of  carrying 
out  the  object  contemplated  in  the  promise,  and  therefore  amenable 
to  law  for  negligence  or  abuse  of  the  trust.  It  is  not  of  course 
binding  upon  the  promisor  until  accepted  by  the  promisee,  and 
may  up  to  that  time  be  considered  as  a  revocable  promise.  But 
when  accepted,  and  much  more  when  the  execution  of  the  trust 
has  been  entered  upon,  where  money  has  been  expended  in  carry- 
ing out  the  object  contemplated,  it  becomes  a  complete  contract 
binding  upon  both  parties,  the  promise  to  pay  or  at  least  an  im- 
plied promise  to  execute,  each  being  a  consideration  for  the  other." 

In  Amherst  Academy  v.  Cowles,  6  Pick.,  427,  17  Am.  Dec, 
387,  the  court,  after  reviewing  the  cases,  says :  "On  this  view  of 
the  cases  which  have  occurred  within  this  commonwealth  analogous 
in  any  degree  to  the  case  before  us,  we  do  not  find  that  it  has 
ever  been  decided  that  when  there  are  proper  parties  to  the  con- 
tract and  the  promisee  is  capable  of  carrying  into  effect  the  pur- 
pose for  which  the  promise  is  made  and  in  fact  amenable  to  law 
for  negligence  or  abuse  of  his  trust,  such  a  contract  is  void  for 
want  of  consideration." 

In  Ladies'  Collegiate  Inst.  v.  French,  16  Gray,  196,  Chapman, 
J.,  says:  "It  is  held  that  by  accepting  such  a  subscription,  the 
promisee  on  his  part  agrees  with  the  subscribers  that  he  will  hold 
and  appropriate  the  funds  subscribed  in  conformity  with  the  terms 
and  objects  of  the  subscribers,  and  these  mutual  and  independent 
promises  are  made  and  constitute  a  legal  and  sufficient  considera- 
tion for  each  other.  They  are  held  to  rest  upon  a  well-settled 
principle  in  respect  to  concurrent  promises." 

In  Johnson  v.  Wabash  College,  2  Ind.,  555,  on  a  promise  to  pay 
a  subscription  of  fifty  dollars,  the  court  says:  "The  only  objection 
made  to  the  recovery  on  the  note  is  that  said  note  was  given  with- 
out consideration.  The  accomplishment  of  the  object,  in  aid  of 
which  the  money  was  promised,  forms  a  good  and  valid  consid- 
eration for  the  promise  to  pay  it."     .     .     . 

In  Irwin  v.  Webster,  56  Ohio  St.,  89,  36  L.  R.  A.,  239,  60  Am. 
St.  Rep.,  727,  the  question  involved  in  this  appeal  was  presented 
for  consideration.  The  court  said :  "That  a  promise  which  does 
not  secure  a  benefit  to  him  who  makes  it,  or  loss  or  detriment  to 
him  to  whom  it  is  made,  or  in  any  manner  influence  the  conduct 
of  others,  is  not  enforceable,  is  a  recognized  general  rule  of  law. 
By  the  desire  of  Gilpin  many  other  persons  made  dona- 
tions in  money  and  executed  obligations  to  the  University  of  like 
character  to  his,  and  his  promise  was  an  inducement  to  their  do- 
nations and  promises.  .  .  .  Whether  the  object  of  the  promisors 
was   to    secure   the   opportunity   of    educating   their   own   children 


194  FORMATION    OF    CONTRACT. 

under  such  influences  as  they  desired,  or  more  generally  to  con- 
tribute to  the  general  welfare  by  increasing  the  facilities  for  higher 
education,  it  has  been  accomplished  by  the  expenditure  of  money 
and  the  incurring  of  obligations  in  reliance  upon  their  promises 
and  similar  promises  from  others.  Institutions  of  this  character 
are  incorporated  by  public  authority  for  defined  purposes.  Money 
recovered  by  them  on  promises  of  this  character  can  not  be  used 
for  the  personal  and  private  ends  of  an  individual,  but  must  be 
used  for  the  purposes  defined.  To  this  use  the  University  is  re- 
stricted not  only  by  the  law  of  its  being,  but  as  well  by  the  obliga- 
tion arising  from  its  acceptance  of  the  promise.  A  promise  to 
give  money  to  one  to  be  used  by  him  according  to  his  inclination 
and  for  his  personal  ends,  is  prompted  only  by  motive.  But  a 
promise  to  pay  money  to  such  an  institution  to  be  used  for  such 
designed  and  public  purposes,  rests  upon  consideration.  The 
general  course  of  decisions  is  favorable  to  the  binding  obligation 
of  such  promises.  It  is  not  contemplated  by  the  parties,  nor  is 
it  required  by  law,  that  in  cases  of  this  character  the  institution 
shall  have  done  a  particular  thing  in  reliance  upon  a  particular 
promise.  Not  only  do  the  law  and  the  parties  contemplate  the 
permanency  of  the  institution,  but  all  promisors  understand  that 
the  proceeds  of  their  promises  will  be  mingled  with  prior  and  sub- 
sequent donations,  and  together  constitute  the  financial  support  of 
the  enterprise.  The  cases  must  be  rare  indeed  in  which  such  con- 
tributions or  promises  would  be  made  if  others  had  not  been  made 
before,  and  rarer  still  in  which  they  would  be  made  but  for  the 
belief  that  others  will  be  made  afterwards.  The  requirements  of 
the  law  are  satisfied,  the  objects  of  the  parties  secured  and  the 
perpetration  of  frauds  prevented  by  the  conclusion  that  considera- 
tion for  the  promise  in  question  is  the  accomplishment,  through  the 
University,  of  the  purposes  for  which  it  was  incorporated,  and  in 
whose  aid  the  promise  was  made."  These  observations  appear  to 
be  peculiarly  appropriate  to  the  consideration  of  the  question  pre- 
sented in  this  case.     .     .     . 

In  the  light  of  the  foregoing  authorities  and  the  principles  upon 
which  they  are  based,  we  are  of  the  opinion  that  the  promise  made 
by  Judge  Faircloth  to  pay  to  the  trustees  of  the  Baptist  Female 
University  one  thousand  dollars  is  supported  by  a  sufficient  con- 
sideration and  constitutes  a  legal  liability  upon  his  estate.  We 
think  that  this  conclusion  may  be  supported  upon  several  views  of 
the  testimony. 

The  University  is  duly  incorporated  with  the  power  to  receive 
such  subscriptions.  It  is  under  the  control  of  the  Baptist  Church 
of  which  the  testator  was  a  member.  Its  trustees  had  appointed 
agents  to  solicit  subscriptions.     It  had  incurred  liabilities  for  their 


CONSIDERATION.  195 

expenses  and  payment  for  their  services.  The  subscription  was 
made  to  the  President  of  the  University  and  an  announcement 
thereof  was  made  in  a  Baptist  Convention.  The  subscription  was 
thereby  accepted,  and  by  its  acceptance  the  University  assumed 
the  responsibility,  duty  and  obligation  of  applying  the  money  to 
the  purposes  for  which  it  was  given.  Other  persons  at  said  time 
and  place  made  subscriptions  for  the  same  purpose.  Announce- 
ments of  each  were  made  in  the  presence  of  Judge  Faircloth. 
Most  of  these  subscriptions  were  paid,  and  it  must  be  understood, 
as  a  reasonable  conclusion  from  the  facts  stated,  that  these  sub- 
scriptions were  made  at  the  same  time  and  place,  and  therefore 
operated  as  an  inducement  for  other  persons  to  make  subscriptions 
for  the  same  purpose  which  were  received  by  the  University  and 
the  duty  or  trust  thereby  imposed  of  expending  the  money  for 
which  it  was  given,  assumed  by  the  officers  of  the  University.  .  .  . 
We  think  that  in  either  of  the  several  points  of  view  and  in 
accordance  with  the  definition  of  a  valuable  consideration  herein- 
before given,  the  promise  was  supported  by  such  consideration. 

Douglas,  J.,  dissenting  in  part:  .  .  .  Popular  education  is 
one  of  the  noblest  objects  of  a  Christian  age,  but  a  gift  should  be 
the  deliberate  act  of  the  donor.  To  construe  into  a  contract  a 
merely  voluntary  promise  made  upon  the  spur  of  the  moment  and 
perhaps  under  the  influence  of  religious  fervor,  would  in  my  opin- 
ion be  subversive  of  the  highest  principles  of  jurisprudence  as  well 
as  of  public  policy.  In  this  case  the  promise  was  clearly  within 
the  ability  of  the  testator,  who  was  a  man  of  clear  and  deliberate 
judgment,  but  in  other  cases  it  might  not  be,  and  its  legal  enforce- 
ment might  be  oppressive  to  the  promisor  and  unjust  to  a  de- 
pendent family. 

My  views  are  so  clearly  and  strongly  expressed  by  the  Supreme 
Court  of  Massachusetts  in  an  opinion  delivered  by  Chief  Justice 
Gray,  afterwards  on  the  Supreme  Bench  of  the  United  States,  in 
Cottage  St.  Methodist  Church  v.  Kendall,  121  Mass.,  528,  23  Am. 
Rep.,  286,  that  I  will  close  this  opinion  by  the  adoption  of  its  lan- 
guage. Its  numerous  citations  are  omitted  for  the  sake  of  brevity. 
There  are  numerous  other  decisions  to  the  same  effect,  but  this  is 
sufficient  to  express  my  views.  The  court  says:  "The  perform- 
ance of  gratuitous  promises  depends  wholly  upon  the  good  will 
which  prompted  them,  and  will  not  be  enforced  by  law.  The  gen- 
eral rule  is  that,  in  order  to  support  an  action,  the  promise  must 
have  been  made  upon  a  legal  consideration  moving  from  the  prom- 
isse  to  the  promisor.  To  constitute  such  consideration,  there  must 
be  either  a  benefit  to  the  maker  of  the  promise,  or  a  loss,  trouble 
or  inconvenience  to,  or  a  charge  or  obligation  resting  upon,  the 
party  to  whom  the  promise  is  made.     A  promise  to  pay  money, 


196  FORMATION    OF    CONTRACT. 

to  promote  the  objects  for  which  a  corporation  is  established,  falls 
within  the  general  rule.  In  every  case,  in  which  this  court  has 
sustained  an  action  upon  a  promise  of  this  description,  the  prom- 
isee's acceptance  of  the  defendant's  promise  was  shown,  either  by 
express  vote  or  contract,  assuming  a  liability  or  obligation,  legal 
or  equitable,  or  else  by  some  unequivocal  act,  such  as  advancing  or 
expending  money,  or  erecting  a  building,  in  accordance  with  the 
terms  of  the  contract,  and  upon  the  faith  of  the  defendant's 
promise.  .  .  .  Where  one  promises  to  pay  another  a  certain 
sum  of  money  for  doing  a  particular  thing,  which  is  to  be  done 
before  the  money  is  paid,  and  the  promisee  does  the  thing  upon 
the  faith  of  the  promise,  the  promise,  which  was  before  a  mere 
revocable  offer,  thereby  becomes  a  complete  contract,  upon  a  con- 
sideration moving  from  the  promisee  to  the  promisor ;  as  in  the 
ordinary  case  of  an  offer  of  reward.  .  .  .  The  suggestion  in  5 
Pickering,  508,  substantially  repeated  in  6  Mete,  316,  and  in  9 
Cushing,  539,  that  'it  is  a  sufficient  consideration  that  others  were 
led  to  subscribe  by  the  very  subscription  of  the  defendant,  was  in 
each  case  but  obiter  dictum,  and  appears  to  us  to  be  inconsistent 
with  elementary  principles.  Similar  promises  of  third  persons  to 
the  plaintiff  may  be  a  consideration  for  agreements  between  those 
persons  and  the  defendant ;  but  as  they  confer  no  benefit  upon  the 
defendant,  and  impose  no  charge  or  obligation  upon  the  plaintiff, 
they  constitute  no  legal  consideration  for  the  defendant's  promise 
to  him.  The  facts  in  the  present  case  show  no  benefit  to  the  de- 
fendant and  no  vote  or  contract  by  the  plaintiff,  and,  although  it 
appears  that  the  chapel  was  afterwards  built  by  the  plaintiff,  it  is 
expressly  stated  in  the  bill  of  exceptions  that  the  learned  Judge 
who  presided  at  the  trial  did  not  pass  upon  the  question  of  fact 
whether  the  plaintiff  had,  in  reliance  upon  the  promise  sued  on, 
done  anything  or  incurred  or  assumed  any  liability  or  obligation. 
It  does  not,  therefore,  appear  that  there  was  any  legal  considera- 
tion upon  which  this  action  is  brought." 

Clark,  C.  J.,  concurs  in  dissenting  opinion. 

See  1  Page  Cont.,  sec.  298;  Clark  Cont.,  118;  3  L.  R.  A.,  468;  27  Am.  & 
Eng.  Encyc,  277,  279,  and  notes,  where  it  seems  the  weight  of  authority 
is  given  against  the  validity  of  the  promise. 


CONSIDERATION.  197 

4.     Forbearance  to  exercise  a  right. 

(80)    LOWE  v.  WEATHERLEY, 
20  N.   C,  353—1839. 

This  was  an  action  of  assumpsit,  in  which  the  defense  was  a 
release  under  seal,  and  the  facts  were  as  follows : 

The  plaintiff  sold  to  the  defendant  some  slaves  for  $850,  and 
the  defendant  paid  the  price  in  bank-notes,  and  took  a  bill  of  sale 
under  seal,  containing  the  ordinary  acquittance  or  release  for  the 
purchase  money.  At  the  time  the  release  was  given  the  defendant 
said:  "The  money  is  all  good;  if  it  is  not,  I  will  make  it  good." 
It  turned  out  that  a  $50  bill  of  the  money  was  counterfeit.  The 
plaintiff  took  affidavits  as  to  the  identity  and  the  character  of  the 
bill,  and  sent  them  to  the  defendant,  demanding  good  money.  The 
defendant  took  the  bill  and  the  affidavits,  and  said  he  wanted  to  be 
satisfied  that  he  let  the  plaintiff  have  the  bill ;  and  said  to  the 
agent,  "Tell  the  old  man  not  to  be  uneasy,  but  to  wait  until  next 
Thursday  week,  and  I  will  then  come  to  his  house  and  compromise 
or  settle  the  matter,  for  I  do  not  wish  him  to  be  injured."  The 
plaintiff,  in  consequence  of  the  message,  forbore  to  take  any  pro- 
ceedings to  recover  his  demand,  until  the  time  had  expired.  The 
defendant  failed  to  come  and  settle,  and  this  action  was  brought. 
There  was  a  verdict  for  the  plaintiff,  and  defendant  moved  for  a 
new  trial :  First,  because  the  Judge  erred  in  permitting  any  evi- 
dence to  go  to  the  jury  tending  to  show  a  promise,  after  the  date 
of  the  release ;  secondly,  because  there  was  no  evidence  to  be  left 
to  the  jury  of  any  promise,  or  legal  consideration  to  support  a 
promise,  subsequent  to  the  release. 

The  court  overruled  the  motion,  gave  judgment  for  the  plaintiff, 
and  the  defendant  appealed. 

Daniel,  J.  If  the  receipt  which  the  plaintiff  gave  for  the 
purchase-money  of  the  slaves  had  been  without  seal,  it  might  have 
been  explained  by  parol ;  as  a  receipt  is  not  conclusive  evidence  of 
payment.  2  Term  Rep.,  366.  5  B.  &  Aid.,  611,  3  B.  &  C,  421,  3 
B.  &  Adol.,  313.  In  that  case  the  plaintiff  might  have  recovered 
upon  the  original  consideration,  as  a  balance  of  the  price  of  the 
slaves  ;  the  counterfeit  bill  being  a  nullity,  could  not  be  considered 
a  payment,  although  both  of  the  parties  were  ignorant  at  the  time 
that  the  bill  was  counterfeit.  Hargrave  v.  Dusenberry,  9  N.  C, 
326;  Markle  v.  Halfield,  2  John.  Rep.,  445.  But  as  the  plaintiff 
affixed  his  seal  to  the  acquittance,  that  circumstance  gave  it  the 
effect  of  a  release,  which  the  defendant  has  pleaded  in  bar  of  all 
demands  arising  upon  the  original  transaction,  and  it   estops  the 


198  FORMATION    OF    CONTRACT. 

plaintiff  to  contradict  or  explain  it  by  parol  evidence.  Brocket  v. 
Foscue,  8  N.  C,  64;  Gilbert's  Law  of  Evidence,  142;  Rountree  v. 
Jacobs,  3  Taunt.,  154;  Sampson  v.  Cork,  5  B.  &  A.,  506.  But  the 
plaintiff  has  relied  on  a  promise  made  by  the  defendant  subse- 
quent to  the  date  of  the  release.  The  defendant  contends,  how- 
ever, that  if  such  a  promise  was  made,  it  was  without  considera- 
tion, and  that  no  action  lay  upon  it,  and  that  therefore  the  court 
erred  in  submitting  it  to  the  jury.  The  plaintiff  says  that  as  the 
bill  was  bad,  he  had  a  remedy  either  at  law  upon  the  promise  made 
by  the  defendant  to  make  the  bill  good,  Baker  v.  Deavey,  8  Eng. 
Com.  Law  Rep.,  193,  or  he  had  a  remedy  in  equity  to  set  aside  the 
release,  as  having  been  given  under  a  mistake  so  far  as  relates  to 
this  demand;  and  that  he  had,  at  the  special  instance  and  request 
of  the  defendant,  forborne  to  take  judicial  proceedings  to  obtain 
his  rights  until  the  time  expired,  and  that  that  forbearance  is  a 
good  consideration.  It  seems  to  us  that  such  a  consideration  is 
sufficient  to  uphold  a  promise;  and  that  the  plaintiff,  notwithstand- 
ing the  release,  had  a  remedy  in  some  court.  An  action  will  lie 
upon  a  promise  to  pay  a  sum  of  money  in  consideration  of  giving 
time,  or  forbearing  to  sue  for  a  precedent  debt,  or  other  cause  of 
action.  Com.  Dig.,  B.,  1  (action  of  assumpsit),  2  Com.  on  Cont., 
420. 

Secondly,  the  defendant  contends  that  if  the  consideration  of 
forbearance  be,  in  this  case,  deemed  sufficient  in  law  to  uphold  a 
promise,  still  there  was  no  evidence  of  any  promise  made  by  him, 
to  have  been  left  by  the  Judge  to  the  jury;  and  that  the  Judge 
should  have  nonsuited  the  plaintiff.  The  answer  given  by  the  de- 
fendant to  the  plaintiff's  agent,  when  he  demanded  payment,  was, 
in  our  opinion,  such  evidence  as  the  Judge  was  bound  to  leave  to 
the  jury  for  them  to  determine  whether  a  promise  had  or  had  not 
been  made.  Strike  out  the  word  "compromise"  in  the  agent's  tes- 
timony, and  the  balance  of  his  evidence  is  very  strong  to  show 
that  the  defendant  did  promise  to  pay  the  money.  That  word 
remaining,  leaves  it  doubtful,  and  the  jury  were  the  proper  per- 
sons to  determine  the  fact. 

To  prevent  misapprehension,  we  desire  to  be  understood  as  ex- 
pressing no  opinion  whether  the  plaintiff  might  not  have  recovered 
independently  of  the  special  contract  for  forbearance,  upon  the 
promise  to  be  inferred  from  the  transaction,  and  actually  made 
when  the  release  was  executed,  to  make  the  notes  good,  should 
they  turn  out  to  be  counterfeit,  and  we  are  clearly  of  the  opinion, 
that  of  an  action  founded  on  such  a  promise,  a  Justice  had  juris- 
diction. It  is  a  promise  to  pay  money,  if  what  has  been  received 
as  a  bank-note  be  not  what  it  purports,  and  not  a  guaranty  of  the 


CONSIDERATION.  199 

solvency  or  punctuality  of  the  makers  of  the  note.     The  judgment 
is  affirmed. 

Per  Curiam.  Judgment  affirmed. 

(81)   HAMER  v.  SID  WAY, 
124  N.  Y.,  538,  27  N.  E.,  256,  21  A.  S.  R.,  693,  12  L.  R.  A.,  463—1891. 

Parker,  J.  The  question  which  provoked  the  most  discussion 
by  counsel  on  this  appeal,  and  which  lies  at  the  foundation  of 
plaintiff's  asserted  right  of  recovery,  is,  whether  by  virtue  of  a 
contract,  defendant's  testator,  William  E.  Story,  became  indebted 
to  his  nephew,  William  E.  Story,  2d,  on  his  twenty-first  birthday 
in  the  sum  of  five  thousand  dollars.  The  trial  court  found  as  a 
fact  that  "on  the  twentieth  day  of  March,  1869,  .  .  .  William 
E.  Story  agreed  to  and  with  William  E.  Story,  2d,  that  if  he 
would  refrain  from  drinking  liquor,  using  tobacco,  swearing,  and 
playing  cards  or  billiards  for  money  until  he  should  become 
twenty-one  years  of  age,  then  he,  the  said  William  E.  Story, 
would,  at  that  time,  pay  him,  the  said  William  E.  Story,  2d,  the 
sum  of  five  thousand  dollars  for  such  refraining,  to  which  the  said 
William  E.  Story,  2d,  agreed,"  and  that  he  "in  all  things  fully  per- 
formed his  part  of  the  agreement." 

The  defendant  contends  that  the  contract  was  without  consid- 
eration to  support  it,  and  therefore  invalid.  He  asserts  that  the 
promisee,  by  refraining  from  the  use  of  liquor  and  tobacco,  was 
not  harmed,  but  benefited ;  that  that  which  he  did  was  best  for 
him  to  do  independently  of  his  uncle's  promise,  and  insists  that  it 
follows  that,  unless  the  promisor  was  benefited,  the  contract  was 
without  consideration;  a  contention  which,  if  well  founded,  would 
seem  to  leave  open  for  controversy  in  many  cases  whether  that 
which  the  promisee  did  or  omitted  to  do  was  in  fact  of  such  bene- 
fit to  him  as  to  leave  no  consideration  to  support  the  enforcement 
of  the  promisor's  agreement.  Such  a  rule  could  not  be  tolerated, 
and  is  without  foundation  in  the  law.  The  exchequer  chamber,  in 
1875,  defined  consideration  as  follows :  "A  valuable  consideration 
in  the  sense  of  the  law  may  consist  either  in  some  right,  interest, 
profit,  or  benefit  accruing  to  the  one  party,  or  some  forbearance, 
detriment,  loss,  or  responsibility  given,  suffered,  or  undertaken  by 
the  other."  Courts  "will  not  ask  whether  the  thing  which  forms 
the  consideration  does  in  fact  benefit  the  promisee  or  a  third 
party,  or  is  of  any  substantial  value  to  anyone.  It  is  enough  that 
something  is  promised,  done,  forborne,  or  suffered  by  the  party  to 
whom  the  promise  is  made,  as  consideration  for  the  promise  made 
to  him."    Anson  on  Contracts,  63. 

"In  general,  a  waiver  of  any  legal  right  at  the  request  of  an- 


200  FORMATION    OF    CONTRACT. 

other  party  is  a  sufficient  consideration  for  a  promise."  Parsons 
on  Contracts,  444. 

"Any  damage,  or  suspension,  or  forbearance  of  a  right  will 
be  sufficient  to  sustain  a  promise."     2  Kent's  Com.,  12th  ed.,  465. 

Pollock,  in  his  work  on  contracts,  page  166,  after  citing  the 
definition  given  by  the  exchequer  chamber  already  quoted,  says : 
"The  second  branch  of  this  judicial  description  is  really  the  most 
important  one.  Consideration  means,  not  so  much  that  one  party 
is  profiting,  as  that  the  other  abandons  some  legal  right  in  the 
present  or  limits  his  legal  freedom  of  action  in  the  future,  as  an 
inducement  for  the  promise  of  the  first." 

Now,  applying  this  rule  to  the  facts  before  us,  the  promisee  used 
tobacco,  occasionally  drank  liquor,  and  he  had  a  legal  right  to  do 
so.  That  right  he  abandoned  for  a  period  of  years,  upon  the 
strength  of  the  promise  of  the  testator  that  for  such  forbearance 
he  would  give  him  five  thousand  dollars.  We  need  not  speculate 
on  the  effort  which  may  have  been  required  to  give  up  the  use  of 
those  stimulants.  It  is  sufficient  that  he  restricted  his  lawful  free- 
dom of  action  within  certain  prescribed  limits  upon  the  faith  of 
his  uncle's  agreement ;  and  now,  having  fully  performed  the  con- 
ditions imposed,  it  is  of  no  moment  whether  such  performance  ac- 
tually proved  a  benefit  to  the  promisor,  and  the  court  will  not 
inquire  into  it;  but  were  it  a  proper  subject  of  inquiry,  we  see 
nothing  in  this  record  that  would  permit  a  determination  that  the 
uncle  was  not  benefited  in  a  legal  sense.  Few  cases  have  been 
found  which  may  be  said  to  be  precisely  in  point,  but  such  as 
have  been  support  the  position  we  have  taken.     .     .     . 

"If  a  person  be  possessed  of  a  right  which  he  may  legally  exercise,  his 
forbearance  at  the  instance  of  the  promisor  to  exercise  it.  is  a  valuable 
consideration  for  the  promise."  6  Am.  &  Eng.  Encyc,  744,  and  notes 
citing  numerous  instances;  Clark  Cont.,  121;  1  Page  Cont.,  sec.  301; 
Talbott  v.  Stemmons,  89  Ky.,  222,  12  S.  W.,  297,  5  L.  R.  A.,  856;  Wolford 
v.  Powers,  85  Ind.,  294,  44  A.  R.,  16;  Prater  v.  Miller,  25  Ala.,  320,  60 
A.  D.,  521:  Queal  v.  Peterson,  138  Iowa,  514,  116  N.  W.,  593,  19  L.  R.  A. 
(N.  S.),  842;  Shadwell  v.  Shadwell,  6  E.  R.  C,  9;  right  to  name  a  child, 
Gardner  v.  Denison,  217  Mass.,  492,  105  N.  E.,  359,  51  L.  R.  A.  (N.  S.), 
1108;  Freeman  v.  Morris.  131  Wis.,  216,  109  N.  W.,  983,  11  Ann.  Cas., 
481;  9  Cyc,  335;  6  R.   C.   L.,  656. 

A  change  in  the  payment  of  interest  so  as  to  make  it  semi-annual  isa 
sufficient  consideration.  Scott  v.  Fisher,  110 — 311;  receiving  interest  in 
advance  is  prima  facie  evidence  of  a  contract  to  forbear.  Hollingsworth 
v.  Tomlinson,  108—— 245.  Extension  of  time  for  the  payment  of  a  debt  is 
a  valuable  consideration.  Chemical  Co.  v.  McNair,  139 — 326;  but  such 
agreement  to  extend  time  must  be  under  seal  or  have  a  sufficient  con- 
sideration. Bank  v.  Lineberger,  83 — 454;  Supply  Co.  v.  Finch,  154 — 456; 
Ann.    Cas.,    1912  A,  412;   52  L.   R.   A.    (N.   S.),  328. 

Plaintiff  had  charge  of  wrecked  goods  and  was  about  to  sell  them, 
when  the  owner  agreed  to  pay  him  his  expenses  if  he  would  not  sell; 
upon  this  promise  the  owner  obtained  possession  of  the  goods,  and  was 
held  liable  to  the  plaintiff  on  his  promise.  Etheridge  v.  Thompson, 
29—127. 


CONSIDERATION.  201 

A  promise  not  to  resort  to  bastardy  proceedings  is  a  sufficient  con- 
sideration for  the  promise  of  the  defendant  to  pay  for  support,  etc. 
Burton  v.    Belvin,   142—151. 

5.     Compromise  of  doubtful  claims. 

(82)    MAYO  v.  GARDNER, 

49  N.  C,  359—1857. 

This  was  an  action  of  assumpsit,  in  which  the  declaration  was, 
1,  upon  an  oral  warranty  of  the  merchantable  quality  of  certain 
turpentine ;  and  2,  upon  failure  to  perform  an  award. 

In  August,  1854,  the  plaintiff  bought  of  defendant  74  barrels 
of  turpentine  for  $248 ;  the  turpentine  was  there  present,  and  it 
was  agreed  that  the  plaintiff  should  take  it  as  it  was,  without  in- 
spection ;  the  price  was  all  paid  by  April,  1855.  Between  the  date 
of  the  purchase  and  the  final  payment  of  the  price,  the  turpentine 
remained  where  it  was,  but  the  barrels  being  inferior,  much  of  it 
ran  out  upon  the  ground,  and  was  scraped  up  by  plaintiff's  direc- 
tion and  restored  to  the  barrels.  After  payment  had  been  made, 
the  parties  agreed  to  have  the  turpentine  inspected,  and  that  the 
plaintiff  should  not  pay  for  that  which  was  worthless.  The  inspec- 
tor reported  27  barrels  worthless,  the  defendant  refused  to  repay 
the  money,  and  the  plaintiff  sued  for  the  value  of  the  27  barrels 
or  the  proportionate  part  of  the  whole  amount  paid. 

The  court  intimated  that  the  plaintiff  could  not  recover,  and  the 
plaintiff  submitted  to  a  nonsuit  and  appealed. 

Nash,  C.  J.  There  is  error.  The  court  below  was  of  opinion 
that  the  plaintiff  could  not  recover,  upon  the  ground,  we  suppose, 
(for  no  reason  is  assigned),  that  there  was  no  consideration  for 
the  new  implied  promise  on  the  part  of  the  defendant.  The  orig- 
inal contract  was  at  an  end,  but  in  consequence  of  the  insufficiency 
of  the  barrels,  a  considerable  quantity  of  the  turpentine  ran  out, 
which  by  the  direction  of  the  plaintiff  was  scraped  up  and  re- 
stored to  the  barrels.  It  was  then  agreed  between  the  parties,  that 
a  Mr.  Grimmer  should  inspect  the  turpentine,  and  what  he  con- 
demned for  dirt  plaintiff  should  pay  nothing  for.  It  was  accord- 
ingly inspected  in  the  presence  of  the  parties,  and  it  was  adjudged 
by  Grimmer  that  27  barrels  were  not  worth  anything.  This  is  the 
substance  of  what  was  stated.  We  are  not  passing  upon  the  orig- 
inal contract,  but  our  attention  is  directed  solely  to  the  question  as 
to  the  existence  of  a  new  consideration  for  the  new  promise. 

The  prevention  of  litigation  is  a  valid  and  sufficient  considera- 
tion ;  for  the  law  favors  the  settlement  of  disputes.  Thus,  a  sub- 
mission of  claims  and  demands  to  arbitration  is  binding,  so  far  as 
this,  that  the  mutual  promises  are  a   consideration,   each   for  the 


202  FORMATION    OF    CONTRACT. 

other.  1  Parsons  Cont,  364;  Com.  Dig.  "Action  on  the  case  on 
Assumpsit."  Al,  B2.  In  Keson  v.  Barclay,  2  Penn.  Rep.,  531, 
an  action  of  slander  for  words  was  compromised  by  the  defend- 
ant's agreeing  to  pay  the  plaintiff  a  sum  certain;  the  court  held 
there  was  a  sufficient  consideration,  though  the  words  used  were  not 
slanderous.  In  re  Lucy,  21  Eng.  L.  &  Eq.  Rep.,  199,  it  was  de- 
cided that,  to  sustain  a  compromise,  it  was  sufficient,  if  the  parties 
thought,  at  the  time  of  entering  into  it,  that  there  was  a  bona  fide 
question  between  them,  though,  in  fact,  there  was  no  such  question. 

Now,  in  this  case,  Mr.  Grimmer,  the  referee,  stated  that,  at  the 
time  he  inspected  the  turpentine,  none  of  it  was  good.  The  plain- 
tiff, no  doubt,  thought  he  was  entitled  to  compensation  from  the 
defendant  to  the  value  of  the  whole  27  barrels,  or  a  proportionate 
part  of  the  sum  paid  by  him  for  the  whole.  The  defendant,  on 
his  part,  thought  he  had  a  good  defense  to  the  whole  claim.  In 
this  situation  they  agree,  in  order  to  avoid  a  lawsuit,  that  Mr. 
Grimmer  shall  inspect  the  turpentine,  and  what  he  condemned  for 
dirt,  the  plaintiff  should  pay  nothing  for.  But  the  plaintiff  had 
already  paid  the  whole  price  to  the  defendant.  The  meaning  of 
the  parties,  therefore,  must  have  been,  that  the  defendant  would 
pay  to  the  plaintiff  the  value  of  the  turpentine  condemned  by 
Grimmer.  After  this  agreement,  the  plaintiff  could  not  have  main- 
tained an  action  on  the  warranty,  or  of  deceit. 

Per  Curiam.  Judgment  reversed. 

If  an  agreement  is  entered  into  upon  a  supposition  of  a  doubtful  right, 
it  is  binding  in  the  absence  of  fraud.  Truett  v.  Chaplin,  11 — 178.  It  is 
not  necessary  that  there  should  be  a  legal  cause  of  action;  it  is  suffi- 
cient if  there  is  a  bona  fide  difference  of  opinion  as  to  the  rights  of  the 
parties.  Findlay  v.  Ray,  50—125;  Parrish  v.  Strickland,  52—504.  There 
was  a  contest  about  a  will,  and  the  parties  entered  into  an  agreement 
to  adjust  their  rights;  this  will  be  sustained  as  a  compromise  of  doubtful 
rights  or  as  a  family  settlement.  Bailey  v.  Wilson,  21 — 182.  A  release 
of  a  controverted  claim  is  a  valuable  consideration.  Lipschutz  v. 
Weatherley,  140—365;  York  v.  Westall,  143—276;  Barnawell  v.  Thread- 
gill,  56—58:  Williams  v.  Alexander,  39—209;  Burriss  v.  Starr,  165—657; 
Peyton  v.  Shoe   Co.,   167—280. 

Some  cases  hold  that  there  must  be  reasonable  ground  for  belief  in  the 
validity  of  the  claim;  and  others  hold  that  forbearance  to  prosecute  an 
invalid  claim,  though  honestly  believed  in,  is  no  consideration.  Clark 
Cont.,  125;  6  Am.  &  Eng.  Encyc,  711 — 714,  and  notes;  1  Page  Cont., 
sec.  321.  A  forbearance  to  do  what  one  can  not  legally  do,  or  to  enforce 
an  entirely  groundless  claim,  would  not  be  a  sufficient  consideration. 
Ibid.:  Smith  v.  Farra,  21  Ore.,  395.  28  Pac,  241,  20  L.  R.  A.,  115;  Mor- 
gan v.  Hodges,  89  Mich.,  404,  50  N.  W.,  876,  15  L.  R.  A.,  438;  Armijo 
v.  Henry,  89  Pac,  305,  25  L.  R.  A.  (N.  S.).  275,  and  subject  note; 
Kiler  v.  Wohletz,  79  Kan.,  716,  101  Pac,  474,  L.  R.  A..  1915  B,  11; 
Stapilton  v.  Stapilton,  1  Alk.,  2,  12  E.  C.  R.,  100.  3  H.  &  W.  L.  C. 
Eq.,  684,  with  discussion  of  the  doctrine  especially  with  reference  to 
family  settlements;  9  Cyc,  345;  6  R.  C.  L.,  662;  Contracts,  Cent.  Dig., 
sec.  328;  Dec.  Dig.,  sec.  68. 


CONSIDERATION.  203 

6.     A  promise  to  do  what  one  is  already  bound  to  do. 

1.    BY    PRIOR    CONTRACT. 

(83)  FESTERMAN  v.  PARKER, 
32  N.  C,  474—1849. 

This  was  an  action  of  assumpsit,  in  which  the  plaintiff  declared 
specially,  and  for  work  and  labor  done,  materials  furnished,  goods, 
etc.,  sold  and  delivered,  and  for  money  paid  to  the  use  of  the 
defendant. 

In  the  spring  of  1844,  the  plaintiff  agreed  to  build  and  put  into 
operation  a  sawmill  for  the  defendant,  for  which  the  defendant 
was  to  pay  him  $100,  board  him  and  his  hands,  and  furnish  tim- 
ber. The  defendant  advanced  $20  of  the  amount  to  enable  the 
plaintiff  to  get  certain  materials.  The  plaintiff  afterwards  sent 
word  to  the  defendant  that  he  could  not  do  the  work  because  the 
price  was  too  low.  The  defendant  replied :  "Tell  him  to  come 
on  and  do  the  work,  and  I  will  do  what  is  right  or  pay  what  is 
right."  The  plaintiff  completed  the  work,  and  claimed  that  it  was 
worth  $150.  The  defendant  contended  that  the  work  was  improp- 
erly done  and  that  he  had  incurred  expense  in  putting  it  in  proper 
condition,  and  that  he  had  paid  the  $100  promised. 

The  court  charged  that  on  the  special  contract  the  plaintiff  could 
not  recover,  if  the  defendant  had  paid  the  $100,  supposing  the 
work  to  have  been  well  done. 

Upon  the  second  count,  on  a  promise  to  pay  for  the  materials 
furnished  and  work  done,  implied  from  the  defendant's  having 
made  use  of  the  materials  and  work,  the  court  charged,  that  when 
work  is  not  done  according  to  contract,  although  the  party  can  not 
recover  on  the  contract,  still  he  may  recover  for  the  materials  and 
work,  but  not  more  than  the  original  price,  and  if  that  had  been 
paid,  he  could  recover  nothing  more. 

Upon  the  other  view  presented  by  the  plaintiff's  counsel,  the 
court  charged  that  if  the  original  contract  had  been  rescinded  by 
mutual  consent,  so  that  neither  was  in  any  way  bound,  and  the  de- 
fendant had  promised  to  do  what  was  right  or  pay  what  was  right, 
the  plaintiff  could  recover  the  value  of  the  materials  and  work, 
which  he  alleged  was  $150.  But  the  court  was  of  opinion  that  the 
evidence  did  not  show  such  rescission,  and  without  this,  the  de- 
fendant's promise  to  pay  more  would  be  without  consideration. 
There  was  a  verdict  and  judgment  for  defendant,  and  the  plain- 
tiff appealed. 

Nash,  J.  In  the  argument  of  the  case  here,  the  first  exception 
taken  by  the  plaintiff's  counsel  to  the  Judge's  charge  is,  that  it 


204  FORMATION    OF    CONTRACT. 

ought  to  have  been  submitted  to  the  jury  to  decide,  whether  or  not 
the  first  contract  was  rescinded  by  the  parties.  His  Honor  in- 
structed the  jury  there  was  no  evidence,  that  the  original  contract 
had  been  rescinded  and  another  substituted.  There  can  be  no 
doubt  but  that  the  construction  of  a  contract  is  a  matter  of  law. 
If  committed  to  writing,  the  meaning  of  the  terms,  where  they  are 
explicit,  is  a  question  for  the  court ;  but  if  doubtful  and  uncertain, 
they  may  be  submitted  to  the  jury,  with  proper  instructions  given 
hypothetically,  as  the  case  might  be,  and  in  doing  so,  no  error  is 
committed,  as  has  been  declared  by  the  court  this  term.  And  if 
verbal,  and  the  parties  dispute  about  the  terms  of  the  agreement, 
it  involves  a  question  of  fact  as  to  the  terms  to  be  decided  by  the 
jury;  but  if  there  is  no  dispute  as  to  the  terms,  and  they  be  precise 
and  explicit,  it  is  for  the  court  to  declare  their  effect.  Massey  v. 
Belisle,  24  N.  C,  176.  Here  there  is  no  dispute  as  to  the  terms, 
but  only  as  to  their  effect.  In  considering  the  question,  as  one  of 
law  and  not  of  fact,  the  Judge  below  committed  no  error.  This 
brings  up  the  main  question,  so  far  as  this  case  is  concerned,  viz., 
was  the  construction  put  upon  the  terms,  used  by  the  plaintiff  and 
defendant,  correct  in  point  of  law?  The  plaintiff  had  agreed  to 
build  a  mill  for  the  defendant,  for  the  sum  of  $100,  and  had  re- 
ceived in  part  payment  the  sum  of  $20.  Becoming  dissatisfied 
with  his  contract,  he  sent  the  defendant  word  that  he  could  not  do 
the  work  for  that  sum,  to  which  the  defendant  replied,  "Tell  him 
to  come  and  do  the  work,  I  will  do  what  is  right  or  pay  what  is 
right."  One  party  to  a  contract  can  not  rescind  it ;  to  do  so  there 
must  be  the  action  of  both  parties,  showing  an  assent  to  it,  for  it 
is  as  much  a  contract  to  rescind  one  as  to  make  one.  If  in  this 
case  the  plaintiff  had  sent  back  the  money,  which  had  been  paid 
to  him,  and  the  defendant  had  received  it,  or  if  the  defendant  had 
brought  an  action  for  it,  the  original  contract  would  have  been 
rescinded.  There  is  nothing  in  the  case  to  show  that  either  the 
plaintiff  or  defendant  had  intended  to  set  aside  the  first  contract. 
The  plaintiff  found,  upon  reflection,  that  he  had  made  a  bad  bar- 
gain and  was  desirous  to  improve  it ;  the  defendant  had  made  his 
calculations,  and  was  willing  to  give  the  sum  agreed  on  to  have  his 
mill  built.  Perhaps  it  was  as  much  as  the  work  was  worth  or  as 
much  as  he  was  able  to  give.  At  any  rate  such  was  the  contract 
between  the  parties  ;  the  plaintiff  was  to  build  the  mill  and  defend- 
ant pav  therefor  $100.     The  first  contract  was  not  rescinded. 

His  Honor,  having  instructed  the  jury  that  the  contract  was  not 
rescinded,  proceeded  to  charge  them,  as  to  the  effect  of  the  promise 
made  by  the  defendant,  if  any  was  made,  by  using  the  words,  "do 
or  pay  what  is  right."  If,  by  this,  he  was  to  be  understood  as 
making  an  additional  promise  to  pay  more  than  the  price  agreed 


CONSIDERATION.  205 

on,  it  was  not  binding,  "for  want  of  a  consideration."  On  the  part 
of  the  plaintiff  it  is  insisted  that,  although  the  first  contract  was 
not  rescinded,  yet  the  parties  were  at  liberty  to  vary  it.     There  is 
no   doubt  of   this  proposition;  but   it  will  be   recollected  that  the 
variation  of  a  contract  is  as  much  a  matter  of  contract  as  the  orig- 
inal agreement — it  equally  requires  the  concurrence  of  intention  in 
the  parties;  it  can  not  be  varied  at  the  mere  will  and  pleasure  of 
either.     But  in  what  was  the  contract  in  this  case  varied?  not  in 
the  work  to  be  done ;  that  was  not  altered  in  the  slightest  manner ; 
the  plaintiff  came  under  no  new  obligation ;  he  was  to  do  the  same 
work  he  had  previously  bound  himself  to  do.     It  was  varied,  says 
the  plaintiff,  in  this,  that  the  defendant  promised  to  give  an  addi- 
tional fifty  dollars,  if  he  would  build  the  mill.     Let  it  be  admitted 
that   the    defendant,    under   the   circumstances,    had,    in    so    many 
words,  promised  the  plaintiff  that  he  would  give  him  $50  more,  or 
$150  for  building  the  mill,  would  that  have  been  in  law  a  valid 
promise?    I  concur  in  the  opinion  that  it  would  not.     A  considera- 
tion is  an  essential  ingredient  to  the  legal  existence  of  every  simple 
contract.     This  consideration  consists,  as  defined  by  Mr.  Smith,  in 
his  treatise  on  contracts,  p.  87,  to  be  "any  benefit  to  the  person 
making  the  promise,  or  any  loss,  trouble  or  inconvenience  to,  or 
charge  upon  the  person  to  whom  it  is  made."     The  case  states  that 
the  $100,  originally  promised,  had  been  paid  by  the  defendant,  and 
the  controversy  is  for  the  $50  under  the  alleged  promise.     What 
loss,  trouble  or  inconvenience,  or  charge  resulted  to  the  plaintiff 
by  his  executing  the  work  ?    He  was  bound  to  build  the  mill  by  his 
original  contract,  and  he  was  to  do  and  did  nothing  more.     What 
benefit  was  to  result  to  the  defendant  by  the  promise  to  pay  the 
additional  $50?     None  whatever;  he  was  to  get  from  the  plaintiff 
precisely  the  same  quantum  of  work  without  it  as  with  it.     The 
promise,  therefore,  if  made,  was  purely  a   "nudum  pactum,'^  not 
binding  in   law,   however  it  may  be   so  in   honor  and  conscience. 
The  enforcement  of  contracts  of  the  latter  character,  in  the  lan- 
guage of  Lord  Dcnman,  in  Eastwood  v.  Kenyon,   11   Ad.   &  EL, 
438,  however  plausibly  recommended  by  "the  desire  to  effect  all 
conscientious    engagements,    might    be    attended    with    mischievous 
consequences  to  society."    The  truth  of  this  opinion  might  be  illus- 
trated by  a  variety  of  cases.     One  is  furnished  by  that  of  Harris 
v.  Watson,  Peake,  72.     There  it  was  laid  down  by  Lord  Kenyon, 
that  a  promise  made  by  a  captain  of  a  ship,  to  one  of  his  seamen, 
when  the  vessel  was  in  extraordinary  danger,  to  pay  him  an  extra 
sum  of  money,  as  an  inducement  to  extra  exertion  for  her  safety, 
was  a  void  promise,  because  every  seaman  is  bound  to  exert  him- 
self to  the  utmost  for  the  safety  of  the  ship,  and  therefore  the 
captain  would  get  nothing  from  the  seaman  in  exchange  for  his 


206  FORMATION    OF    CONTRACT. 

promise,  except  that  which  the  seaman  was  bound  to  do  before. 
The  principle  established  or  recognized  in  the  case  last  cited  gov- 
erns this;  the  plaintiff  was  bound  to  do  the  work  and  the  defend- 
ant would  get  nothing  from  the  new  promise  but  what  he  was  en- 
titled to  before  he  made  it.  If  the  words  used  by  the  defendant 
amounted  to  a  promise,  it  is  nudum  pactum,  as  founded  on  no 
legal  consideration,  and  his  motive  in  using  them  is  very  obvious ; 
it  was  to  induce  the  plaintiff  to  do  that  which,  by  his  contract,  he 
was  already  bound  to  do.  In  the  argument,  the  counsel  referred 
the  court  to  two  cases.  One  was  52  E.  C.  L.  R.,  361,  Pontifix  v. 
Wilson,  and  the  other  from  19  John.,  205,  Wood  v.  Edwards.  We 
do  not  think  either  assists  the  plaintiff's  case.  In  the  first,  the 
plaintiff  had  contracted  to  erect  certain  buildings  for  the  defend- 
ant, who  was  to  pay  a  stipulated  price,  when  they  were  delivered. 
When  the  buildings  had  progressed  some  time,  the  plaintiff  refused 
to  go  on  with  the  work,  unless  defendant  would  give  him  security 
for  the  payment  of  the  money.  "The  whole  dispute,"  says  Chief 
Justice  Tindal,  "as  shown  by  the  correspondence,  was,  whether  the 
defendant  would  give  security,  which  the  plaintiff  insisted  on,  and 
had  no  right  to  i)isist  on."  The  case  in  Johnson  was,  that  the  par- 
ties had  entered  into  a  contract  under  seal,  for  the  purchase  and 
delivery  of  a  certain  quantity  of  coal,  at  a  price  agreed.  After  its 
execution,  a  new  agreement  was  drawn  up  by  the  plaintiff,  but 
unexecuted  by  him,  and  sent  to  the  defendant  for  his  approval. 
The  defendant,  by  letter,  expressed  his  willingness  to  alter  the  old 
agreement,  and  promised  to  execute  the  new  one  at  some  future 
time,  but  never  did.  The  action  was  in  assumpsit  on  the  new 
agreement.  The  court  decided  that  the  first  agreement  was  not 
set  aside,  but  was  in  force,  and  that  the  proposition  of  the  defend- 
ant to  execute  the  new  one  was  not  binding  on  him  ;  as  well  on  the 
ground  of  want  of  consideration  as  of  mutuality.  These  cases 
sustain  the  view  taken  by  the  Judge  below,  both  as  to  the  re- 
scinding of  the  original  contract,  and  the  invalidity  of  the  second, 
if  made. 

No  exception  is  taken  to  His  Honor's  charge  upon  the  first 
count  in  the  declaration,  nor  to  the  second,  as  to  the  rule  laid 
down  by  him  as  to  the  measure  of  damages. 

Per  Curiam.  Judgment  affirmed. 

Where  the  parties  have  rescinded  the  former  agreement,  they  may 
make  a  new  contract:  or  if  the  prior  contract  is  changed  in  any  respect, 
that  will  be  a  sufficient  consideration.  Some  courts  hold  that  a  promise, 
as  in  the  principal  case,  would  be  binding,  because  it  is  an  advantage 
to  the  promisor  to  have  the  work  done.  Clark  Cont.,  127,  128;  1  Page 
Cont..  sec.  312:  Abbott  v.  Doane,  163  Mass..  433,  40  N.  E.,  197,  47  A.  S. 
R.,  465.  34  L.  R.  A.,  33,  and  notes.  Tn  the  above  case,  and  in  Shadwell 
v.  Shadwell,  9  C.  B.  (N.  S.~).  159,  6  E.  R.  C,  9,  it  was  held  that  a  prom- 
ise to  a  third  person  to  perform  an  existing  contract  was  valid,  but  that 


CONSIDERATION.  207 

is  not  in  accord  with  the  general  rule.  Harriman  Cont.,  sees.  122-125;  6 
Am.  &  Eng.  Encyc,  752;  King  v.  Duluth,  M.  &  N.  R.  R,  61  Minn.,  482, 
63  N.  W.,  1105;  Shriner  v.  Craft,  166  Ala.,  146,  51  So.,  884, 28  L.  R.  A. 
(N.  S.),  450,  139  A.  S.  R.,  19;  Linz  v.  Schuck,  106  Md.,  220,  67  Atl.,  286, 
11  L.  R.  A.  (N.  S.),  789,  124  A.  S.  R.,  481,  14  Ann.  Cas.,  495;  Morecraft 
v.  Allen,  78  N.  J.  L.,  729,  75  Atl.,  920,  54  L.  R.  A.  (N.  S.),  1;  9  Cyc, 
347;  Pollock  Cont.,  203;  6  R.  C.  L.,  664,  666.  A  pre-existing  debt  is  a 
sufficient  consideration  to  sustain  a  chattel  mortgage.  Brown  v.  Mitchell 
(N.  C),  84  S.  E.,  404. 

2.    BY    LAW. 

(84)  SWEANY  v.  HUNTER, 

5  N.  C,  181—1808. 

The  plaintiff  was  summoned  as  a  witness  for  the  defendant,  and 
failing  to  attend,  he  was  called  out  and  judgment  nisi  for  the  for- 
feiture was  entered  against  him.  Afterwards  there  was  an  agree- 
ment between  them,  that  if  the  plaintiff  would  attend  at  the  next 
term  of  court  and  give  his  testimony,  the  defendant  would  save 
him  harmless  as  to  the  said  forfeiture.  The  plaintiff  did  attend 
and  testify,  and  afterwards  the  defendant  sued  out  a  sci.  fa. 
against  him,  the  conditional  judgment  was  made  absolute,  and  the 
forfeiture  was  collected  by  execution.  The  plaintiff  brought  this 
action  to  recover  damages  for  breach  of  the  agreement,  and  it  was 
submitted  to  the  court  to  determine  whether  there  was  a  sufficient 
consideration  to  support  the  promise  of  the  defendant  to  save  the 
plaintiff  harmless  as  to  the  forfeiture. 

Locke,  J.  To  ascertain  whether  there  is  a  sufficient  considera- 
tion in  this  case  to  support  an  assumpsit,  it  is  first  necessary  to 
examine  whether  the  plaintiff  was  not  bound  to  attend  the  court  by 
operation  of  the  subpoena,  and  without  any  additional  recompense 
or  reward.  The  Act  of  1777,  ch.  2,  declares  "that  every  witness 
being  summoned  to  appear  in  any  of  the  said  courts  in  manner  as 
hereinbefore  described,  shall  appear  accordingly  and  continue  to 
attend  from  term  to  term  until  discharged  by  the  court,  or  the 
party  at  whose  instance  such  witness  shall  be  summoned ;  and  in 
default  thereof,  shall  forfeit  and  pay  to  the  person  at  whose  in- 
stance the  subpoena  issued  the  sum  of  fifty  pounds,  and  shall  be 
further  liable  to  the  action  of  such  party  for  the  full  damages  which 
may  be  sustained  for  want  of  such  witness's  testimony ;  who  shall 
recover  the  same  by  scire  facias  with  costs."  From  this  section 
the  court  infers  that  to  enforce  the  attendance  of  a  witness  at  each 
and  every  term  during  the  continuance  of  the  suit,  it  is  only  neces- 
sary that  he  should  be  subpoenaed  once ;  and  if  he  fail  and  is  called 
out,  the  forfeiture  of  fifty  pounds  does  not  release  the  witness 
from  an  obligation  to  attend  at  the  subsequent  term.  And  this 
inference  the  court  draws  from  two  considerations:    First,  because 


208  FORMATION    OF    CONTRACT. 

the  law  declares  that  he  shall  continue  to  attend  from  term  to  term 
until  discharged  by  the  court  or  the  party  at  whose  instance  he  was 
summoned;  and  is  altogether  silent  as  to  the  forfeiture  operating 
to  release  him;  it  states  expressly  how  long  he  shall  attend  under 
the  subpoena  and  how  he  is  to  be  released — and  second,  because 
the  damages  which  the  act  gives  the  remedy  to  recover  against  the 
witness  could  never  be  obtained  or  enforced,  if  upon  the  first  de- 
fault made  by  the  witness,  calling  him  out  upon  his  subpoena,  was 
to  release  him  from  further  attendance.  Nor  until  he  was  exam- 
ined upon  the  trial  of  the  cause,  few  instances  would  occur  in 
which  the  plaintiff  would  be  enabled  to  ascertain  what  the  witness 
would  have  proved  had  he  attended ;  and  what  proportion  of  dam- 
ages he  sustained  on  account  of  his  nonattendance ;  and  if  he  is  to 
be  discharged  upon  the  first  forfeiture,  the  plaintiff  would  be  de- 
prived of  this  additional  remedy.  But  if  the  construction  given  by 
the  court  to  the  act  of  assembly  be  correct,  the  remedy  is  easy  and 
the  proof  plain.  Suppose  a  witness  to  be  so  material,  that  on  his 
testimony  alone,  a  particular  point  in  the  cause  can  be  supported, 
and  he  fails  to  attend  pursuant  to  the  subpoena  served  on  him;  he 
is  called  out,  the  plaintiff  compelled  to  surfer  a  nonsuit  by  reason 
of  his  nonattendance,  or  to  continue  the  cause,  or  being  nonsuited, 
prays  to  have  the  nonsuit  set  aside  and  the  cause  reinstated,  which 
is  granted  to  him  upon  payment  of  all  costs  up  to  that  time;  at  the 
next  term  the  witness  attends,  the  cause  is  tried,  and  the  plaintiff 
recovers — surely  the  plaintiff  would  be  entitled  to  recover  these 
costs  by  way  of  damages  sustained  by  him  from  the  absence  of  the 
witness.  But  it  is  said  that  this  part  of  the  act  can  still  be  en- 
forced by  taking  out  a  second  subpoena — this  would  expose  the 
plaintiff  to  more  trouble  and  expense  than  the  law  intended  to  im- 
pose upon  him ;  and  if  the  Legislature  had  intended  to  expose  him 
to  this  trouble  and  expense,  they  would  have  expressed  such  inten- 
tion; but  they  have  expressly  said  the  contrary  by  compelling  the 
witness  to  attend  until  discharged  under  one  subpoena.  Suppose 
the  mode  of  suing  out  other  subpoenas  upon  the  default  of  wit- 
nesses was  adopted,  and  in  a  case  where  there  might  be  twenty 
witnesses ;  each  witness  fails  to  attend  for  two  or  three  terms  and 
is  called  out  at  each  court,  and  new  subpoenas  are  issued,  the 
plaintiff  finally  recovers  ;  would  it  be  just  and  fair  to  make  the 
defendants  pay  for  all  these  subpoenas,  or  would  it  be  any  object 
to  the  plaintiff  to  bring  an  action  on  the  case  against  each  witness 
to  recover  the  costs  of  a  single  subpoena?  If  not,  then  this  addi- 
tional expense  is  to  be  incurred  by  the  plaintiff  who  has  obtained 
his  judgment  and  who,  the  law  intends,  should  recover  all  his 
costs.  The  court  is  therefore  of  the  opinion  that  this  witness  was 
under  an  obligation  to  attend  the  courts  without  any  additional  re- 


CONSIDERATION.  209 

ward,  and  by  virtue  of  his  subpoena;  and  if  so,  the  promise  on 
which  this  suit  is  brought  is  without  consideration,  and  must  be 
regarded  as  nudum  pactum.  It  is  a  rule  well  settled  that  an  as- 
sumpsit will  not  lie  to  recover  money  promised  for  doing  that 
which  it  was  the  party's  duty  to  do  without  reward.  2  Bur.,  924 ; 
Statesbury  v.  Smith.  Judgment  must  be  entered  for  the  defendant. 

For  the  same  statute  in  regard  to  the  attendance  of  witnesses,  see 
Revisal,  1643.  A  promise  to  pay  a  sheriff  or  other  officer  more  than 
his  lawful  fees  is  invalid,  unless  it  be  for  something  more  than  he  is 
required  to  do  as  such  officer.  Clark  Cont,  127;  1  Page  Cont.,  sec.  311; 
6  Am.  &  Eng.  Encyc,  751.  752;  Studley  v.  Ballard,  169  Mass.,  295,  61  A. 
S.  R.,  286;  9  Cyc,  347;  6  R.  C.  L..  664. 

3.    PART   PAYMENT    AS    SATISFACTION. 

(85)   KOONCE,  Admr.,  v.  RUSSELL,  Admr., 
103  N.   C,   179,  9  S.   E.,  316—1889. 

This  was  a  motion  in  a  special  proceeding  by  creditors  against 
the  representatives  of  the  estate  of  Daniel  L.  Russell,  deceased. 
The  plaintiff's  intestate  had  recovered  two  judgments  against  the 
executors  of  Daniel  L.  Russell — one  for  $811.82,  in  1871,  and  the 
other  for  $852.74,  in  1873.  The  plaintiff's  intestate  filed  said 
judgments  in  the  creditors'  bill,  in  1879,  which  is  still  pending. 
In  1885,  the  executor  of  Daniel  L.  Russell  offered  the  sum  of 
$1,000  by  way  of  compromise  for  the  two  judgments,  which 
amounted  to  $1,492.29,  and  also  to  pay  all  the  costs.  The  plain- 
tiff accepted  the  offer,  and  gave  the  said  executor  a  receipt  in  full 
for  the  whole  amount  of  the  judgments.  The  costs  have  not  been 
paid.  The  motion  was  for  a  judgment  in  favor  of  the  plaintiff 
for  the  balance  due  the  estate  of  his  intestate  on  the  said  judg- 
ments, after  deducting  the  $1,000  paid  as  a  compromise. 

The  motion  was  overruled,  and  the  plaintiff  appealed. 

Avery,  J.  The  plaintiff's  counsel  presented  and  relied  on  the 
single  point,  for  which  he  had  contended  in  the  court  below,  that 
the  plaintiff  was  entitled  to  recover  the  sum  of  $492.27,  being  the 
difference  between  the  aggregate  amount  due  on  the  two  judg- 
ments and  the  amount  actually  paid  by  the  administratrix,  Olivia 
Russell,  through  her  agent,  in  compromise  for  the  whole. 

If  the  compromise  had  been  made  prior  to  the  passage  of  the 
Act  of  1874-75  (Laws  of  1874-75,  ch.  178,  sec.  1,  The  Code,  sec. 
574),  the  payment  of  one  thousand  dollars  would  not  have  dis- 
charged the  debt,  but  would  have  been  valid  only  pro  tanto,  leav- 
ing to  the  plaintiff  the  right  to  collect  the  difference  between  the 
sum  paid  and  that  actually  due,  as  he  seeks  to  do  in  this  action, 
because  the  agreement  to  receive  a  part  for  the  whole  was  held  to 
be  a  nudum  pactum  as  to  all  in  excess  of  the  sum  actually  paid. 


210  FORMATION    OF    CONTRACT. 

Currie  v.  Kennedy,  78  N.  C,  91 ;  Mitchell  v.  Sawyer,  71  N.  C, 
70;  Hayes  v.  Davidson,  70  N.  C,  573;  Love  v.  Johnston,  72  N. 
C,  415. 

The  contract  to  accept  one  thousand  dollars  as  a  payment  in  full 
of  both  judgments,  was  made,  however,  in  October,  1885,  and 
when  the  statute  (The  Code,  sec.  574),  was  and  had  been  for 
many  years  the  law  of  the  land.  But  the  plaintiff's  counsel  con- 
tends that  the  last-named  act  could  not  be  construed  to  apply  to  a 
debt,  upon  which  the  plaintiff's  intestate  recovered  judgment  be- 
fore it  was  enacted,  because  it  would  be  a  violation  of  sec.  10, 
art.  1,  of  the  Constitution  of  the  United  States,  to  give  to  the  law 
a  retroactive  effect,  and  he  relies  upon  the  case  of  Edwards  v. 
Kearzey,  96  U.  S.,  595,  to  sustain  the  position.  The  parties  con- 
tracted as  to  payment  with  reference  to  the  law  in  force,  when  the 
contract  was  made,  and,  if  such  a  receipt  had  been  deemed  a 
nudum  pactum,  under  the  law  then  existing,  as  to  any  part  of  the 
debt,  a  subsequent  act  could  not  have  supplied  the  want  of  con- 
sideration. But  the  compromise  must  be  considered,  just  as  though 
the  statute  (The  Code,  sec.  574),  had  been  incorporated  into  the 
receipt  given  by  the  plaintiff. 

"The  obligation  of  a  contract  consists  in  its  binding  force  on  the 
party  who  makes  it.  This  depends  upon  the  law  in  existence 
when  it  is  made.  These  are  necessarily  referred  to  in  all  con- 
tracts, and  form  a  part  of  them,  as  the  measure  of  the  obligation 
to  perform  them  by  the  one  party  and  the  right  acquired  by  the 
other."     Cooley's  Cons.  Lim.,  p.  285. 

A  law  providing  that  if  creditors,  in  the  exercise  of  their  own 
judgment,  voluntarily  accept  a  part  of  a  debt  already  in  existence 
in  discharge  of  the  whole,  can  not  be  held  to  impair  the  obligation 
of  the  original  contract.  Grant  v.  Hughes,  96  N.  C,  177;  Fickey 
v.  Merrimon,  79  N.  C,  585. 

No  error.  Affirmed. 

For  the  law  before  1874,  see  McKenzie  v.  Culbreth,  66—535;  Bryan 
v.  Foy,  69 — 45  (an  agreement  under  seal  for  this  purpose  could  be 
inquired  into);  Mitchell  v.  Sawyer,  71 — 70;  Bank  v.  Commissioners,  116 
— 362.  For  the  present  law,  see  Clark's  Code,  sec.  574;  Revisal,  sec. 
859;  Tiddy  v.  Harris,  101—589;  Jones  v.  Mizell,  104 — 9;  Kerr  v.  Sanders, 
122—635;  Wittkowsky  v.  Baruch,  127—313;  Boykin  v.  Buie,  109—501; 
Petit  v.  Woodlief,  115—120;  Ramsey  v.  Browder,  136—251.  The  last 
three  cases  were  executory  agreements  to  accept  a  smaller  amount  as  a 
discharge. 

Tn  the  absence  of  statute,  part  payment  is  not  generally  considered 
a  satisfaction,  unless  it  can  be  brought  under  the  doctrine  of  accord 
and  satisfaction  or  the  compromise  of  doubtful  claims.  Fuller  v.  Kemp, 
138  N.  Y.,  231,  33  N.  E.,  1034,  20  L.  R.  A.,  785;  Melroy  v.  Kemmerer,  218 
Pa.,  381,  67  Atl.,  699,  11  L.  R.  A.  (N.  S.),  1018;  Cumber  v.  Wane.  1 
Strange,  426,  1  Smith  L.  C,  439;  Pinnell's  case,  5  Co.  Rep.,  117a;  Foakes 
v.  Beer,  54  L.  J.  Q.  B.,  130;  1  E.  R.  C,  368;  9  Cyc,  354;  6  R.  C.  L.,  665; 
Pollock  Cont.,  210;  Clark  Cont.,  129;  Page  Cont.,  sec.  313;  6  A.  &  E. 
Enc,  754. 


CONSIDERATION.  211 

7.     A  promise  to  do  an  impossible  thing. 
(86)   LEROY  v.  JACOBOSKY  et  al, 

136  N.  C,  443,  459,  48  S.  E.,  796,  67  L.  R.  A.,  977—1904. 

The  defendant,  Jacobosky,  as  guardian  of  S.  H.  Weisel,  signed 
an  agreement,  on  March  13,  1903,  giving  the  plaintiff  an  option 
on  certain  property.  The  paper  states,  "This  option  holds  good 
from  this  date  until  April  13,  1903."  S.  H.  Weisel  was  under 
age  when  the  guardian  signed  the  agreement,  but  becoming  of  age 
prior  to  April  23,  1903,  he  signed  the  paper  on  that  day.  The 
agreement  was  not  complied  with  by  the  defendants,  and  this  ac- 
tion was  brought  by  the  plaintiff  to  recover  damages  for  the 
breach  of  contract.  The  defendant,  Weisel,  contended  that  he  was 
not  liable  on  the  contract,  and  from  a  judgment  against  him,  ap- 
pealed. 

Connor,  J.  The  defendant,  S.  H.  Weisel,  insists  that  he  was 
not  a  party  to  the  contract  when  it  was  executed,  and  signed  it 
without  consideration  after  the  option  had  expired,  and  that  he  is 
not  bound  thereby.  It  will  be  noted  that  the  option  expired  April 
13,  1903,  and  the  contract  was  signed  by  Weisel,  April  23.  As  to 
him  it  is  without  any  consideration ;  he  promised  on  April  23  to 
convey  to  the  plaintiff  the  land  on  the  13th  day  of  April  of  the 
same  year,  which  is  an  impossibility.  We  can  not  see  how  it  is 
possible  for  him  to  commit  a  breach  of  such  agreement.  The  con- 
tract made  by  Weisel  was  impossible  of  performance,  and  of 
course  there  could  never  be  a  breach  of  it.  "Physical  impossibility 
means  mere  practical  impossibility  according  to  the  state  of  knowl- 
edge of  the  day,  as  for  example,  a  promise  to  go  from  New  York 
to  London  in  one  day,  or  to  discover  treasure  by  magic,  or  to 
go  around  the  world  in  a  week."  9  Cyc,  326.  "If  one  promise 
to  do  what  can  not  be  done,  and  the  impossibility  is  not  only  cer- 
tain but  perfectly  obvious  to  the  promisee,  as  if  the  promise  were 
to  build  a  common  dwelling  house  in  one  day,  such  a  contract  must 
be  void  for  its  inherent  absurdity."  2  Parsons  Cont,  673,  (9 
Ed.).  "An  agreement  may  be  impossible  of  performance  at  the 
time  it  is  made,  and  this  in  various  ways.  It  may  be  impossible  in 
itself,  that  is,  the  agreement  itself  may  involve  a  contradiction,  as 
if  it  contain  promises  inconsistent  with  one  another,  or  with  the 
date  of  the  agreement."  Pollock  on  Cont.,  348.  "Obvious  and 
absolute  physical  impossibility,  apparent  upon  the  face  of  the 
promise  and  thus  known  to  the  parties,  renders  the  promise  void. 
Thus  a  charter  party  executed  on  the  15th  of  March,  covenanting 
that  the  ship  would  proceed  from  where  she  then  lay.  on  or  before 


212  FORMATION    OF    CONTRACT. 

the  12th  of  February,  was  held  void."  Beach  on  Mod.  Cont., 
sec.  222. 

The  execution  of  the  contract  was  not  a  ratification  of  his  guar- 
dian's agreement  and  could  not  be,  for  the  reason  that  the  time 
within  which  the  guardian  had  promised  to  sell  was  past,  and  for 
the  further  reason  that  his  agreement,  being  against  public  policy, 
was  void. 

The  exception  of  the  defendant,  Weisel,  must  be  sustained  and  a 
new  trial  ordered  as  to  him. 

A  made  an  exchange  of  lots  with  B,  and  alleged  as  a  part  of  the 
consideration  that  B  was  to  open  a  street  leading  to  the  lot.  B  did  not 
own  the  land  over  which  the  street  was  to  pass,  and  could  not  purchase 
it,  nor  could  he  control  the  city  authorities  and  have  them  lay  off  a 
street,  and  A  knew  this;  the  promise  was  void  for  impossibility.  Hall 
v.  Fisher,  126—205. 

See  Clark  Cont.,  134;  1  Parsons  Cont.,  498;  Joyner  v.  Crisp,  158—199; 
Nordyke  &  Marmon  Co.  v.  Kehlor,  155  Mo.,  643,  56  S.  W..  287,  78 
A.  S.  R.,  600;  The  Harriman,  9  Wall.,  172;  Beebe  v.  Johnson,  19  Wend., 
500,  32  A.  D.,  518;  9  Cyc,  326;  Pollock  Cont.,  520. 

For  vague  and  indefinite  consideration,  see  Certain  and  Definite 
Terms,  supra;   for  illegal  consideration,  see  Illegality  of  Object,  post. 

8.     Past  consideration. 

(87)   LITTLEJOHN  v.  PATIIXO, 
9  N.  C,  302—1822. 

Bill  in  Equity.  The  plaintiff  owned  a  tract  of  land  in  Gran- 
ville County  on  which  the  courthouse  was  erected,  and  there  being 
some  discontent  on  account  of  the  plaintiff's  owning  all  the  land 
around  the  courthouse,  the  Legislature,  with  the  assent  of  the 
plaintiff,  appointed  a  commission  to  contract  with  him  for  fifty 
acres  of  the  land,  to  build  the  town  on.  The  plaintiff  expressed 
his  willingness,  under  the  circumstances,  to  convey  the  land  to  the 
commissioners  for  such  sum  as  they  might  think  it  was  worth ;  and 
the  commissioners  declared  their  wish  that  the  plaintiff  have  the 
full  benefit  of  all  the  land  would  bring,  and  they  made  a  private 
agreement  among  themselves,  unknown  to  the  plaintiff,  that  he 
was  to  receive  such  sum  as  the  land  might  sell  for  in  lots,  above 
what  they  agreed  to  pay  him  for  it.  The  contract  was  made  for 
$2,636,  and  a  conveyance  executed.  The  commissioners  sold  the 
lots  for  $4,360,  and  took  the  bonds  of  the  purchasers  payable  to 
the  defendant  as  trustee  for  the  county.  The  defendant  assigned 
to  the  plaintiff  bonds  to  the  amount  of  $2,636,  and  refused  to 
assign  the  residue.  The  bill  asked  that  the  defendant  be  directed 
to  collect  the  money  and  pay  it  to  the  plaintiff,  or  that  he  be  re- 
quired to  assign  the  remaining  bonds  to  the  plaintiff. 

Taylor,  C.  J.     The  bill  does  not  make  out  a  case  which  entitles 


CONSIDERATION.  213 

the  complainant  to  relief.  The  contract  of  sale  was  completed  be- 
tween the  parties,  and  the  price,  an  indispensable  ingredient  in 
such  contract,  fixed  and  agreed  upon.  The  additional  sum  now 
sought  to  be  recovered  entered  in  no  degree  into  the  views  and 
calculations  of  the  parties ;  there  was  no  mutual  agreement  and 
understanding  between  them  concerning  it,  and  it  could  form  no 
part  of  the  inducement  with  the  complainant  to  sell  the  land,  for 
from  him  it  was  concealed  till  an  after  period ;  consequently  no 
valid  obligation  to  pay  the  money  was  incurred.  If  the  commis- 
sioners, upon  an  after  reflection,  thought  it  an  act  of  justice  to 
allow  the  complainant  the  sum  which  the  lots  might  sell  for  above 
the  stipulated  price,  the  performance  of  an  agreement  to  that  effect 
must  be  left  to  the  same  sense  of  justice  by  which  it  was  prompted. 
But  it  may  be  doubted  whether  they  could  bind  their  principals  by 
an  agreement  relative  to  a  purchase  which  was  then  completed, 
and  as  to  which  their  authority  was  functus  officio,  even  if  a  valid 
contract  had  been  made.  If  the  agreement  to  pay  this  money  could 
by  any  construction  form  part  of  the  price  of  the  land,  then  it  can 
not  be  proved  by  parol;  otherwise  part  of  the  contract  would  rest 
in  deed,  the  other  depend  on  the  memory  of  witnesses,  but  the  deed 
is  the  best  evidence  of  what  the  contract  was.  It  may  be  confi- 
dently inferred  from  this  that,  however  strong  the  sentiment  of 
justice  might  be  under  which  the  commissioners  made  the  agree- 
ment, or  however  deliberate  their  purpose  of  fulfillment,  they  did 
not  mean  to  subject  themselves  to  legal  responsibility.  The  law 
designs  to  give  effect  to  contracts  founded  on  the  mutual  exigencies 
of  society  and  not  to  undertakings  merely  gratuitous,  nor  does 
equity  differ  in  this  respect.  If  damages  are  sought  in  the  one 
court,  the  plaintiff  must  be  able  to  state  some  valid  legal  contract, 
which  the  other  party  wrongfully  refuses  to  perform ;  if  a  specific 
performance  is  sought  here,  the  party  must  state  some  contract, 
legal  or  equitable,  concluded  between  the  parties  which  the  other 
refuses  to  execute.  But  a  voluntary  conveyance  (contract)  can 
not  be  enforced  in  this  court  any  more  than  damages  can  be  given 
at  law  for  the  breach  of  a  voluntary  promise.  1  Ves.,  133,  280; 
3  Atk.,  399;  18  Ves.,  149.  It  would  be  impossible  to  frame  a 
declaration  at  law  upon  the  case  made  in  this  bill ;  the  agreement 
was  made  amongst  the  commissioners  themselves,  and  not  with  the 
complainant  or  anyone  in  his  behalf  ;  and  the  consideration,  if  any 
existed,  was  altogether  passed  and  executed.  Dyer,  272 ;  2  Strange, 
933.  It  may  therefore  be  said,  as  it  has  been  in  another  case : 
"This  agreement  resting  on  private  contract  and  honor  may,  per- 
haps, be  fit  to  be  executed  by  the  parties,  but  can  only  be  en- 
forced by  considerations  which  apply  to  their  feelings,  and  is  not 
the  subject  of  an  action.     The  law  encourages  no  man  to  be  un- 


214  FORMATION    OF    CONTRACT. 

faithful  to  his  promise,  but  legal  obligations  are,  from  their  nature, 
more  circumscribed  than  moral  duties."  1  H.  Blackstone,  327. 
Let  the  bill  be  dismissed  without  costs. 

(88)   McDUGALD  v.  McFADGIN, 
51    N.    C,  89—1858. 

Pearson,  C.  J.  .  .  .  The  point,  as  we  understand  it,  is  this :  The 
plaintiff  having  sold  and  delivered  to  the  defendants  600  barrels 
of  No.  1  rosin,  at  an  agreed  price,  afterwards  undertakes,  i.  e., 
warrants,  without  any  further  consideration,  that  the  quality  of 
the  rosin  is  No.  1,  according  to  the  rates  in  the  New  York  market. 
Is  this  subsequent  undertaking  binding,  or  is  it  void  as  a  nudum 
pactum? 

It  clearly  falls  under  the  familiar  doctrine  of  an  executed  or 
past  consideration :  Suppose  I  sell  a  horse,  and  the  next  day, 
without  any  consideration,  agree  to  warrant  that  the  horse  is 
sound.     Is  not  the  warranty  nudum  pactum? 

Judgment  reversed. 

(89)  CRITCHER  v.  WATSON, 

146  N.   C,   150,  59  S.   E..  544,   125   A.   S.   R.,  470,   18  L.    R.   A.    (N.   S.), 

270—1907. 

Clark,  C.  J.  Action  for  recovery  of  rents,  begun  before  a 
Justice  of  the  Peace.  The  only  exception  is  to  the  following 
charge  of  the  court:  "If  defendant  bought  and  paid  for  the  win- 
dow and  frame  and  put  it  in  the  house,  and,  after  that  time,  told 
plaintiff  he  had  done  so,  and  plaintiff  could  pay  for  it,  or  not,  as 
he  saw  fit,  and  plaintiff  ratified  and  accepted  it,  and  plaintiff  said 
he  would  pay  for  it,  the  plaintiff  would  be  liable  for  the  value  of 
the  window  and  frame,  and  defendant  would  be  entitled  to  credit 
for  the  same." 

The  defendant  could  not  put  a  betterment  on  the  house  without 
request,  and,  by  such  officious  act,  make  the  landlord  his  debtor. 
Nor,  if  the  consideration  was  passed,  would  the  promise  of  the 
plaintiff  to  pay  therefor  be  binding,  being  gratuitous  and  without 
a  consideration  moving  thereto.  But  the  window  and  frame  being 
a  betterment  to  the  house  of  future  benefit,  if  the  plaintiff  "ac- 
cepted the  same  and  promised  to  pay  for  it"  (as  the  court 
charged),  there  were  all  the  elements  of  a  valid  contract,  for  the 
tenant  had  a  right  to  remove  all  betterments  affixed  by  him,  if 
done  without  injury  to  the  freehold.  State  v.  Whitener,  93  N.  C, 
594,  bottom  of  page,  citing  Tyler  on  Fixtures,  pp.  384.  385,  on  the 
very  point  of  the  right  of  a  tenant  to  remove  windows  placed  by 
him   in   a    windowless    house.      If,    under    such    circumstances,   the 


CONSIDERATION.  215 

plaintiff  promised  to  pay  for  the  window,  this  was  ratification  and 
acceptance. 

This  distinction  reconciles  the  authorities.  As  the  plaintiff  con- 
tends, an  executed  or  past  consideration  is  no  consideration  to  sup- 
port an  express  promise  in  cases  where  the  law  does  not  raise  an 
implied  promise.  6  A.  &  E.,  690,  693  ;  Allen  v.  Bryson,  67  Iowa, 
591.  In  Bailey  v.  Rutjes,  86  N.  C,  522,  Rutjes  was  lessee  of  the 
premises  for  five  years,  under  a  contract  to  make  certain  better- 
ments. The  plaintiff  furnished  the  lumber  to  Rutjes  for  the  pur- 
pose. He  sued  Rutjes  and  the  lessors  jointly,  and  the  court  held 
that  unless  the  lessors  "were  originally  liable  by  reason  of  a  con- 
tract of  some  sort,  they  can  not  be  made  so  because  of  their  hav- 
ing resumed  possession  of  the  premises,  with  its  improvements, 
upon  the  surrender  of  their  tenant;  .  .  .  nor,  under  such  cir- 
cumstances, would  a  promise  to  pay,  after  the  lumber  had  been 
furnished  and  used,  be  binding  on  them,  since  it  would  be  purely 
gratuitous,  and,  as  such,  would  make  no  contract." 

But  here  the  jury  find  that  the  plaintiff  expressly  agreed  to  pay 
for  the  window  and  frame  their  cost — $1.72 — and  the  only  query 
is  whether  the  promise  is  void  for  lack  of  consideration.  If  the 
only  claim  were  that,  at  the  expiration  of  the  lease,  as  in  Bailey 
v.  Rutjes,  the  property  passed  to  the  plaintiff,  with  the  window 
and  frame  added,  there  would  be,  as  in  that  case,  no  liability  of 
plaintiff,  either  to  the  maker  of  the  window  and  frame,  or  to  the 
defendant.  And  even  if,  after  the  expiration  of  the  lease,  when 
the  house,  with  its  betterments,  had  already  passed  back  to  the 
landlord,  he  had  then  made  an  express  promise  to  pay  for  the  bet- 
terment, this  would  have  been  unenforcible  because  nudum  pactum, 
being  a  promise  to  pay  for  what  had  already  become  his  property. 

But  here  the  express  promise,  which  the  jury  find  was  made, 
was  made  during  the  tenancy.  The  tenant  had  a  right  to  remove 
the  window,  if  before  he  went  out,  provided  this  could  be  done 
without  injury  to  the  freehold.  24  Cyc,  1101.  It  does  not  appear 
that  it  would  have  been  irremovable,  for  the  jury  find  that  the 
plaintiff  promised  to  pay  for  it.  If  so,  he  must  have  desired  to 
keep  it  there,  and  that  it  was  desirable  to  keep  it  appears  from  the 
plaintiff's  own  testimony  that  "the  room  was  18  x  18  feet,  with  no 
light  except  from  the  door."  Such  a  house  was  unsanitary  and 
would  be  condemned  by  any  board  of  health.  Both  parties  testify 
that  the  conversation  occurred  during  the  tenancy  and  at  the  time 
when  the  defendant  was  doing  work  putting  in  the  window,  the 
plaintiff  denying  and  the  defendant  affirming  a  promise  to  pay  for 
the  same. 

A  landlord  can  not  be  "improved"  into  a  liability  for  improve- 
ments put  upon  his  property  by  the  tenant  without  authority.     Nor 


216  FORMATION    OF    CONTRACT. 

can  anyone  be  held  liable  legally  for  a  promise  made  without  con- 
sideration ;  but  here  the  betterment  to  the  house  was  accepted  at 
the  time  by  the  plaintiff,  who  promised  to  pay  the  $1.72  for  it,  as 
the  jury  find.  He  has  lost  nothing,  but  still  has  the  consideration 
of  better  light  for  a  large  room,  which  before  had  no  light  except 
from  the  door. 
No  error. 

Where  there  is  a  rescisson  of  the  contract  for  land,  there  is  an  im- 
plied obligation  to  repay  the  purchase-money,  and  this  would  be  suffi- 
cient consideration  for  a  promise  to  pay.  Beaman  v.  Simmons,  76 — 43; 
Lewis  v.  Gay,  151—168;  but  see,  Fulke  v.  Fulke,  52—497.  Where  A 
did  certain  work  for  B,  and  after  paying  for  it  B  complained  that  the 
charge  was  excessive,  and  A  then  agreed  to  refer  the  question  to  a 
third  person,  who  decided  in  favor  of  B,  A's  promise  was  binding,  being 
in  the   nature   of  a  compromise  of  a  right.     Findlay  v.   Ray,  50—125. 

A  being  indebted  to  B,  gave  a  mortgage  to  secure  the  debt;  B  not 
being  satisfied  with  the  security,  A  gave  an  additional  mortgage,  but  the 
debt  was  described  as  a  new  debt;  when  B's  attention  was  called  to  it,  he 
promised  to  correct  it  on  the  record,  but  failed  to  do  so;  B's  promise 
was  a  nudum  pactum.  Oldham  v.  Bank,  85 — 240.  A  promise  by  the 
grantee,  after  the  execution  of  deed,  to  convey  to  such  person  as  the 
giantor  should  designate,  is  void  without  consideration.  Washington 
v.  Blount.  108 — 230;  or  to  give  a  lien  on  the  land  for  the  purchase- 
money.  Latham  v.  Skinner,  62 — 292.  The  guaranty  of  a  contract  by 
a  third  person,  after  its  execution,  is  not  binding  unless  there  is  some 
new  consideration.  Grier  v.  Jones,  52 — 581;  Green  v.  Thornton,  49 — 
230.  In  a  claim  for  improvements  on  land  under  a  parol  contract  of 
purchase,  the  improvements  must  have  been  placed  there  after  the 
contract.  Johnson  v.  Armfield,  130 — 575;  Luton  v.  Badham,  127 — 96, 
supra,  64.     Bailey  v.  Rutjes,  86 — 517.  supra,  8. 

See  generally,  1  Page  Cont.,  sees.  319,  320;  1  Parsons  Cont..  506; 
Clark  Cont.,  137-142;  6  Am.  &  Eng.  Encyc,  690;  Trimble  v.  Rudy,  22 
Ky.,  1406,  60  S.  W.,  650,  53  L.  R.  A.,  353,  and  note;  see,  moral  obligation, 
ante. 

Exceptions. — 1.  Where  the  past  consideration  was  given  at  the  request 
of  the  promisor,  either  express  or  implied;  but  it  is  then  no  considera- 
tion for  any  other  promise  than  what  the  law  would  imply.  6  Am.  & 
Eng.  Encyc,  690-693;  Clark  Cont.,  138. 

2.  Where  one  has  done  what  another  was  legally  bound  to  do,  and  the 
latter  promises  to  pay  for  the  same.  This  would  not  apply  to  purely 
voluntary  payment,  but  only  where  the  law  would  imply  a  promise.  The 
liability  of  parish  authorities  for  paupers  in  England,  usually  cited 
under  this  principle,  is  regulated  by  statute  here.  Revisal,  1327;  Copple 
v.   Commissioners,   138 — 127;   Edwards  v.  Branch,  52 — 90. 

3.  A  promise  to  revive  an  obligation  which  is  unenforceable  by  reason 
of  some  law.  Here  the  prior  legal  obligation  is  sufficient.  6  Am.  & 
Eng.   Encyc,  680,  681. 

(1.)   On   account   of  incapacity. 

(a.)  If  the  contract  is  only  voidable  as  in  the  case  of  infants,  lunatics, 
etc,  the  original  consideration  is  sufficient.     Ward  v.  Anderson,  111 — 115. 

(b.)  But  if  the  original  contract  is  void,  there  must  be  a  new  con- 
sideration. Where  a  married  woman  made  a  contract  not  binding  on 
her,  and  after  the  husband's  death  promised  to  pay  the  same;  such 
promise  is  void  without  a  new  consideration.  Felton  v.  Reid,  52 — 
269;  Wilcox  v.  Arnold,  116 — 708;  but  any  new  consideration,  as  for- 
bearance or  extension  of  time,  would  be  sufficient.  Bank  v.  Bridgers, 
98 — 67;  or  if  the  transaction  were  of  such  a  nature  as  to  constitute  an 
equitable  charge  on  her  separate  property.  Long  v.  Rankin.  108 — 333; 
Gilbert  v.  Brown.  29  Ky.,  L.  R.,  1248,  97  S.  W.,  40,  7  L.  R.  A.  (N.  S.), 


CONSIDERATION.  217 

1053;  Lyell  v.  Walbach,  113  Md.,  574,  77  Atl.,  1111,  33  L.  R.  A.  (N.  S.), 
741;  Ferguson  v.  Harris,  39  S.  C,  323,  3  A.  S.  R.,  731,  note;  see,  recent 
statute  in  N.  C,  1911,  ch.  109,  as  to  married  women's  contracts. 

Where  the  contract  is  void  by  reason  of  some  prohibitory  statute, 
the  new  promise  is  a  nudum  pactum;  and  a  repeal  of  the  statute  would 
not  make  such  promise  good;  as  a  promise  to  pay  an  unlicensed  physi- 
cian, Puckett  v.  Alexander,  102 — 95;  or  a  parol  contract  of  a  corpora- 
tion under  sec.  683  of  The  Code.  Spence  v.  Cotton  Mills,  115 — 210; 
Jenkins  v.   Mfg.   Co.,   115 — 535. 

(2.)  On  account  of  discharge  in  bankruptcy,  or  by  statute  of  limita- 
tions; the  unpaid  legal  obligation  is  sufficient  to  sustain  a  new  promise. 
Kull  v.  Farmer,  78—339;  Hornthall  v.  McRae,  67—21;  Fraley  v.  Kelly, 
67 — 78;  Shaw  v.  Burney,  86 — 331;  Conley  v.  Dunn,  167 — 32. 


218  FORMATION    OF    CONTRACT. 


CHAPTER  VI. 

Capacity  of  thf  Parties. 

Sec.    1.     The   government. 

1.  The    United   States. 

(90)  UNITED  STATES  v.  TINGEY, 

5    Peters,    115. 

In  a  suit  on  a  bond  voluntarily  given  to  the  United  States,  and 
not  required  by  any  law,  the  question  was  presented,  "Whether 
the  United  States  have,  in  their  political  capacity,  a  right  to  enter 
into  a  contract,  or  to  take  a  bond  in  cases  not  provided  for  by 
some  law." 

Story,  J.,  says:  "Upon  full  consideration  of  this  subject,  we 
are  of  the  opinion  that  the  United  States  have  such  capacity.  It 
is,  in  our  opinion,  an  incident  to  the  general  right  of  sovereignty ; 
and  the  United  States  being  a  body  politic,  may,  within  the  sphere 
of  the  constitutional  powers  confided  to  it,  and  through  the  instru- 
mentality of  the  proper  department  to  which  those  powers  are  con- 
fided, enter  into  contracts  not  prohibited  by  law,  and  appropriate 
to  the  just  exercise  of  those  powers.  To  adopt  a  different  prin- 
ciple would  be  to  deny  the  ordinary  rights  of  sovereignty,  not 
merely  to  the  general  government,  but  even  to  the  State  govern- 
ments within  the  proper  sphere  of  their  powers,  unless  brought 
into  operation  by  express  legislation." 

The  ordinary  principles  which  apply  to  other  contracts  will  apply 
also  to  government  contracts.  Smoot's  Case,  15  Wall.,  36;  Chicago 
R.  R.  v.  U.  S.,  104  U.  S.,  680. 

Power  to  sue  and  be  sued. — The  United  States  may  sue  in  the  courts 
as  prescribed  by  law,  but  can  be  sued  only  with  the  consent  of  the 
government.  Carr  v.  U.  S.,  98  U.  S.,  433.  The  Court  of  Claims  has 
power  to  try  all  cases  upon  contract,  express  or  implied,  with  the  gov- 
ernment.    Nichols  v.  U.  S.,  7  Wall.,   122. 

2.   The   State. 
(91)   STATE  ex  rel.  BRADDY  v.  SHIRLEY  et  al., 

23   N.   C.  597—1841. 

Gaston,  J.  This  was  an  action  of  debt  brought  by,  or  in  the 
name  of,  the  State  of  North  Carolina,  upon  the  relation  and  to  the 
use  of  Isaac  B.  Braddy  against  Geraldus  Shirley,  Charles  G.  Hun- 


CAPACITY     OF    PARTIES.  219 

ter  and  David  Barlow.  The  declaration  averred  that  the  defend- 
ants, by  their  writing  obligatory,  sealed  with  their  seals  and  dated 
on  the  1st  day  of  March,  1836,  acknowledged  themselves  to  be 
held  and  bound  unto  the  said  State  in  the  sum  of  $4,000,  with  a 
condition  underwritten,  that  if  the  above-bounden  Geraldus,  who 
had  been  appointed  constable  of  the  county  of  Edgecombe  for  the 
year  1836,  should  well  and  faithfully  execute  his  said  office  of 
constable  by  executing  all  warrants  put  into  his  hands,  and  should 
faithfully  pay  over  all  moneys  collected  by  him,  the  said  Geraldus, 
by  suit  or  otherwise,  according  to  the  acts  of  Assembly  in  such 
case  made  and  provided,  then  the  above  obligation  is  void ;  and  the 
declaration  set  forth  that  the  said  Geraldus  had  not  complied  with 
the  condition  aforesaid,  but  had  broken  the  same  in  this,  that  he 
had  in  the  said  year  1836  collected  the  amount  of  a  certain  promis- 
sory note,  which  the  relator  had  put  into  his  hands,  as  constable, 
and  had  refused  to  pay  over  the  same  to  the  relator  upon  demand 
therefor  made,  and  also  in  this,  that  on  the  10th  of  April,  1836,  the 
relator  had  put  into  his  hands,  as  constable  aforesaid,  a  certain 
other  promissory  note,  which  he  had  failed  to  collect,  and  which 
with  due  diligence  he  might  have  collected.  The  defendants  craved 
oyer  of  the  alleged  obligation  and  condition,  and,  this  being  had, 
pleaded  the  general  issue,  conditions  performed  and  not  broken. 
Upon  the  trial  the  plaintiff  exhibited  the  alleged  writing  obligatory, 
and  gave  in  evidence,  that  on  the  1st  of  March,  1836,  Henry  Aus- 
tin, Esquire,  one  of  the  Justices  of  the  Court  of  Pleas  and  Quarter 
Sessions  of  Edgecombe  County,  appointed  the  defendant,  Shirley, 
constable  of  said  county  for  the  year  1836;  that  this  appointment 
was  made  out  of  court ;  that,  thereupon,  the  defendants  subscribed, 
sealed  and  delivered  to  the  said  Austin  the  writing  aforesaid  as 
their  deed ;  that  the  same  was  received  by  said  Austin,  and  by  him 
deposited  with  the  Clerk  of  the  County  Court  for  safe  keeping, 
where  it  remained  until  the  institution  of  this  suit ;  and  further 
offered  evidence  to  establish  the  breaches  assigned.  The  counsel 
for  defendants  prayed  the  court  to  instruct  the  jury  that  the  (al- 
leged) bond  was  a  nullity,  and  an  action  could  not  be  maintained 
upon  it;  but  the  court,  rejecting  this  prayer,  instructed  the  jury 
that  in  law  the  bond  was  not  a  nullity,  and  that  an  action  might 
be  maintained  upon  it,  if  the  defendant,  Shirley,  had  been  guilty 
of  the  breaches  alleged.  There  was  a  verdict  and  judgment  for 
the  plaintiff,  and  the  defendants  appealed. 

[The  court  here  gives  the  statute  in  regard  to  the  election  and 
appointment  of  constable,  showing  that  the  appointment  in  this 
case  was  void,  and  that  the  Justices  had  no  authority  to  accept  the 
bond.] 

The  question  of  law  presented  by  the  case  is,  has  there  been  a 


220  FORMATION    OF    CONTRACT. 

delivery  of  this  alleged  bond?  If  there  has  not  been,  the  instru- 
ment declared  on  was  not  the  deed  of  the  defendants.  There  has 
not  been  a  delivery,  unless  the  instrument  has  been  accepted  by 
some  authorized  agent  of  the  State,  or  unless  in  law  its  acceptance 
can  be  presumed. 

The  State  has  undoubted  capacity  to  receive  a  conveyance  or  an 
obligation ;  and  this  capacity  can  only  be  exerted  through  the  me- 
dium of  authorized  agents.  The  authority,  however,  of  these 
agents  may  either  be  expressly  conferred,  or  may  be  incidental  to 
other  powers,  and  therefore  comprehended  within  them.  The  cases 
of  Dugan  v.  U.  S.,  3  Wheat.,  172,  and  U.  S.  v.  Tingey,  5  Peters, 
175  (115),  which  have  been  cited  for  the  plaintiff,  do  not  ( ?) 
establish  this  doctrine ;  and  upon  principle  as  well  as  authority,  we 
have  no  hesitation  in  recognizing  it  thoroughly.  But  the  magis- 
trate who  received  this  bond  in  behalf  of  the  State  acted  wholly 
without  authority.  He  not  only  had  no  express  delegation  of 
power  to  take  it,  but  he  was  acting  altogether  without  his  official 
sphere  in  relation  to  the  subject-matter.  His  acceptance  of  the 
instrument  imparted  to  it  no  more  validity  than  it  would  have  re- 
ceived from  the  acceptance  of  any,  the  humblest,  individual  in  the 
land.  It  is  of  the  very  essence  of  regulated  liberty  that  the  mo- 
ment one  entrusted  with  authority  steps  beyond  its  limits,  his  acts 
become  the  acts  of  a  citizen,  and  are  not  those  of  a  public  agent. 

The  want  of  a  precedent  authority  may,  however,  be  supplied  by 
a  subsequent  ratification.  But  none  such  is  shown  in  this  case. 
The  Clerk  of  the  County  Court  is  entrusted  with  the  keeping  of 
the  records  of  the  court  and  other  public  documents ;  but  he  can 
not  make  an  instrument  a  record  or  public  document,  which  is  not 
such,  by  placing  it  with  the  files  among  the  records  of  his  office. 
The  suit  is  brought  in  the  name  of  the  State  of  North  Carolina, 
but  that  name  is  used  by  an  individual,  as  a  relator,  for  his  own 
benefit,  upon  the  supposition  that  this  instrument  has  been  taken 
under  the  public  authority  ;  and,  whether  it  was  so  taken  or  not,  is 
the  very  question  to  be  tried.  But  if  the  action  had  not  been 
brought  at  the  instance  of  a  relator — if  it  had  been  instituted  by 
the  State  through  the  Attorney-General — unless  it  was  shown  that 
he  had  authority  to  ratify  the  act  of  the  individual,  who,  without 
authority,  took  the  instrument  as  a  bond — this  would  not  have 
been  a  ratification  by  the  State.  The  will  of  the  State  is  only  to 
be  known,  when  declared  through  those  appointed  to  declare  it. 

The  remaining  inquiry  is,  does  the  law  presume  an  acceptance? 
The  delivery  of  a  deed  to  a  third  person  for  the  use  of  a  grantee 
is  generally  held  to  be  a  delivery  to  the  grantee,  until  he  express 
his  dissent.  This  rule  is  founded  upon  the  presumption  that  men 
do  not  refuse  benefits,  and  therefore  the  law  infers  an  acceptance 


CAPACITY    OF    PARTIES.  221 

without  requiring  proof  thereof.  How  far  this  rule  is  applicable 
to  bodies  politic — and  especially  to  those  of  the  highest  dignity, 
States  and  sovereignties — which  act  only  through  the  medium  of 
others,  and  these  ordinarily  invested  with  special  powers  and  re- 
quired to  act  under  these  powers  with  prescribed  formalities — on 
principle  at  least  is  not  so  clear.  In  the  case  of  the  Bank  of  U.  S. 
v.  Dandridge  and  others  (12  Wheaton,  64),  Chief  Justice  Marshall 
held  that  an  instrument  purporting  to  be  a  bond,  given  by  a  cashier 
and  his  sureties  for  the  faithful  performance  of  his  duties  to  the 
institution,  notwithstanding  evidence  that  upon  the  execution  of 
this  instrument  he  was  introduced  into  the  bank  as  cashier  and 
acted  as  such  afterwards,  and  that  this  instrument  was  deposited 
among  the  muniments  of  the  bank,  as  the  cashier's  official  bond — 
was  not  the  deed  of  the  defendants,  because  not  accepted  by  a 
formal  resolution  of  the  directors.  His  brethren,  or  a  majority  of 
his  brethren  on  the  Supreme  Court  Bench,  dissented  from  this 
opinion,  holding  that  the  rule  of  presuming  assent  to  benefits  ten- 
dered applied  to  corporations  as  well  as  to  individuals,  or  at  all 
events,  that  their  assent  might  be  inferred  from  evidence  short  of 
that  which  would  be  required  to  bind  them  to  onerous  obligations. 
There  are  also  decisions  of  courts  of  great  respectability,  in  which, 
without  evidence  of  formal  acceptance,  obligations  made  directly 
to  a  State,  or  to  the  United  States,  for  the  payment  of  money  or 
the  performance  of  other  duties  due  to  them  in  their  corporate 
capacity,  have  been  upheld  as  bonds  on  the  ground  of  presumed 
acceptance.  Among  these,  one  of  the  strongest  is  that  in  the  case 
of  United  States  v.  Maurice  and  others,  2  Brock.,  96,  in  which 
Chief  Justice  Marshall  reluctant  as  he  avowedly  was  to  give  in  to 
any  laxity  of  principle,  because  of  apprehended  inconvenience,  held 
an  instrument  executed  by  one,  irregularly  appointed  to  office,  for 
securing  the  faithful  collection  and  disbursement  of  public  moneys, 
binding  on  the  officer  and  his  sureties.  It  would  seem,  therefore, 
that  there  are  contracts  and  engagements  so  plainly  and  unequiv- 
ocally beneficial  to  the  State,  that  the  law  will  not,  in  regard  to 
them,  require  evidence  of  formal  acceptance ;  but  it  is  manifest 
that  in  the  application  of  this  rather  latitudinous  doctrine  it  is  in- 
cumbent on  the  courts  to  exercise  great  caution,  lest  they  should 
unwittingly  take  upon  themselves  a  function  confided  by  the  funda- 
mental law  to  a  different  part  of  the  government,  the  function  of 
determining  what  is  and  what  is  not  for  the  good  of  the  State. 

The  present  case  does  not  call  upon  us  to  draw  this  line  of  par- 
tition. The  instrument  before  us  does  not  profess  to  be  made  for 
the  benefit  of  the  State  as  such.  It  is  avowedly  made  to  secure 
the  interests  of  all  persons,  who  shall  entrust  the  defendant,  Shir- 


222  FORMATION    OF    CONTRACT. 

ley,  with  the  collection  of  debts,  and  made  to  the  State  as  a  trustee 
for  these  persons.  True,  the  State  may  be  said  in  common  par- 
lance to  have  an  interest  in  the  faithful  performance  of  these  du- 
ties, because  the  performance  of  them  is  for  the  advancement  of 
right.  But  the  State  has  not  an  interest  therein  in  its  proper 
character,  as  a  State.  If  individuals  may,  without  permission,  thus 
make  the  State  their  trustee,  what  limit  can  be  set  to  the  exercise 
of  this  liberty?  Why  may  not  everyone — every  firm,  every  volun- 
tary association,  every  corporate  body,  nay,  every  foreign  State, 
should  they  choose — take  engagements  for  the  protection  of  their 
interests  in  the  name  of  the  State?  If  this  be  done,  is  it  not  mani- 
fest that  the  State  may  become  involved  in  responsibilities  and 
duties,  wholly  alien  from  the  legitimate  purposes  of  government, 
and  its  honored  name  may  be  bandied  about  in  the  contests  of  pri- 
vate litigants,  like  the  John  Doe  and  Richard  Roe  in  an  action  of 
ejectment?  But  there  is  yet  a  stronger  objection  to  the  presuming 
of  an  acceptance  of  this  instrument  by  the  State.  By  its  constitu- 
tional organ,  the  Legislature,  the  State  has  declared  when  and 
through  whose  agency  it  will  accept  a  trust  of  this  character — who 
may  take,  and  in  what  cases  they  may  take  a  bond  as  payable  and 
so  conditioned  as  is  the  instrument  now  under  consideration.  This 
expression  of  the  public  will  must  be  understood  by  us,  whose  duty 
it  is  to  give  it  full  effect  as  a  denial  of  the  power,  thus  specially 
delegated,  to  all  other  persons  and  in  all  other  cases.  Against  this 
denial  no  presumption  can  be  entertained. 

It  has  been  insisted,  in  argument  for  the  plaintiff,  that  the  pre- 
cise ground  on  which  we  put  our  decision  was  not  taken  on  the 
trial — that  the  objection  made  by  the  defendants  was  not  to  the 
incomplete  execution  of  the  instrument,  but  to  its  validity,  sup- 
posing it  executed.  There  is  some  foundation  for  this  criticism — 
the  point  is  not  made  as  distinctly  as  it  might  have  been  presented. 
But  nevertheless  it  manifests  itself  upon  the  case  and  can  not  be 
overlooked.  Objection  was  taken  to  the  bond  as  such  upon  the 
general  issue — because  of  the  circumstances  under  which  the  al- 
leged execution  took  place — and  defendants  prayed  of  the  court 
to  instruct  the  jury  to  find  upon  this  issue  that  it  was  not  their 
deed.  But  instead  of  granting  this  prayer,  the  court  instructed 
the  jury  that  upon  the  evidence  offered  the  plaintiff  had  main- 
tained the  issue  on  his  part  and  was  entitled  to  recover.  If  in 
this  there  was  error,  we  are  bound  to  reverse  the  judgment.  Grist 
v.  Backhouse,  20  N.  C.  496. 

It  is  not  for  us  to  say  or  intimate  whether  the  relator  has  any 
remedy  in  any  other  court  or  in  any  other  form.  But  it  is  our 
opinion  that  as  the  facts  appear  in  this  record  there  can  not  be  a 


CAPACITY    OF     PARTIES.  223 

judgment   at   law   upon   this   instrument   as   the   bond   of   the    de- 
fendants. 
Per  Curiam.    Judgment  reversed  and  a  venire  de  novo  awarded. 

In  Wall's  Case,  24 — 267,  the  bond  was  held  invalid  because  the  record 
did  not  show  that  the  officer  had  been  elected  by  the  people  or  ap- 
pointed by  the  court.  But  in  Pool's  Case,  27 — 105,  a  bond  not  valid  in 
its  original  execution  for  want  of  proper  acceptance,  was  made  valid 
by  subsequent  legislative  enactment  amounting  to  acceptance.  In  Battle 
v.  Baird,  118 — p.  860,  citing  Kello  v.  Maget,  18 — 414,  an  official  bond 
found  in  the  keeping  of  the  proper  officer  was  presumed  to  have  been 
properly  executed  and  accepted. 

A  bond  can  not  be  made  payable  to  the  State  so  as  to  protect  the 
rights  of  the  citizen,  except  in  those  cases  provided  by  law,  as  in  the 
case  of  guardians,  etc.  Dorsey  v.  R.   R.,  91 — 201. 

A  printing  contract  made  by  the  State  was  construed  in  Stewart  v. 
The  State,  118 — 624;  and  a  mistake  in  a  settlement  on  such  contract 
was  corrected  in  Worth  v.  Stewart,  122 — 258.  A  printing  contract  by 
a  committee  of  the  Legislature  was  held  invalid  until  executed  as  re- 
quired by  law.     Capital  Printing  Co.  v.  Hoey,  124 — 767. 

The  State  can  not  make  a  contract  that  interferes  with  the  essential 
powers  of  government  as  in  the  creation  of  monopolies  or  exclusive 
rights.  McRee  v.  R.  R..  47—186;  Bridge  Co.  v.  Comrs.,  81 — 491;  Toll 
Bridge  Co.  v.  Flowers,  110 — 386;  Robinson  v.  Lamb,  126 — 492;  Spease 
Ferry,   138—219. 

Suits  by  and  against  the  State. — Actions  may  be  brought  in  the 
proper  court  and  by  the  proper  officer  to  enforce  a  right  of  the  State. 
This  is  regulated  by  statute.     Revisal,  5328,  5332,  5375,  5380. 

"The  Supreme  Court  shall  have  original  jurisdiction  to  hear  all 
claims  against  the  State,  but  its  decisions  shall  be  merely  recommenda- 
tory; no  process  in  the  nature  of  execution  shall  issue  thereon;  they 
shall  be  reported  to  the  next  session  of  the  General  Assembly  for  its 
action."     Const.,  Art.  4,  sec.  9;   Revisal,  1537,  1538. 

In  an  action  for  the  return  of  bonds  alleged  to  have  been  exchanged 
for  other  bonds,  the  State  and  not  the  treasurer  is  the  proper  party, 
and  the  Supreme  Court  has  jurisdiction.  Martin  v.  Worth,  91—45.  Such 
jurisdiction  extends  only  to  such  claims  as  involve  a  question  of  law, 
and  issues  of  fact  may  be  directed  to  be  tried  by  a  jury  to  facilitate  the 
decision;  but  where  only  questions  of  fact  are  involved,  application 
should  be  made  to  the  Legislature,  Reeves  v.  The  State,  93 — 257; 
Bledsoe  v.  The  State,  64—392;  Reynolds  v.  The  State,  64—460;  Sinclair 
v.  The  State,  69—47;  Miller  v.  The  State,  134—270. 

The  manner  of  procedure  when  the  court  allows  the  claim  is  given  in 
Clements  v.  The  State,  77 — 142.  The  jurisdiction  does  not  extend  to 
claims  which  are  prohibited  by  other  sections  of  the  Constitution,  as 
bonds  of  1868,  etc.  Home  v.  The  State,  84 — 362;  Baltzer  v.  The  State, 
104—265;    Cowles   v.   The    State,    115—173. 

The  different  departments  and  institutions  are  only  agencies  of  the 
State,  and  can  not  be  sued  unless  expressly  authorized  by  law.  Gran- 
ville Co.  Board  of  Education  v.  State  Board  of  Education,  106 — 81; 
Chemical  Co.  v.  Board  of  Agriculture,  111 — 135;  Moody  v.  State  Prison. 
128—12. 

A  set-off  strictly  can  not  be  allowed  in  an  action  by  the  State,  because 
the  defendant  can  not  sue  the  State;  but  it  may  amount  to  a  credit  or 
payment.  Battle  v.  Thompson,  65 — 406.  In  Henry  v.  The  State,  68 — 
465,  the  claim  was  for  Judge's  salary  for  services,  and  in  Home  v.  The 
State,  82 — 382,  it  was  a  claim  for  bonds  and  coupons  past  due. 

In  an  action  by  the  State  provided  by  law,  costs  may  be  allowed 
against  the  State  as  the  losing  party.  Blount  v.  Simmons,  120 — 19;  but 
as  to  how  this  should  be  collected,  see  Garner  v.  Worth,  122 — 250. 

In  Cotten  v.  Ellis,  52 — 545,  the  court  held  that  a  mandamus  might 
issue    to    the    Governor    requiring    him    to    do    a    purely    ministerial    act, 


224  FORMATION    OF    CONTRACT. 

here  to  issue  a  warrant  to  pay  the  salary  of  the  Adjutant-General.  But 
in  Boner  v.  Auditor  and  Treasurer,  65 — 639,  and  Bayne  v.  Treasurer, 
66 — 356,  the  writ  was  refused  on  the  ground  that  the  Legislature  only 
could  grant  relief.  In  White  v.  Ayer,  126 — 570,  the  salary  of  the  plaintiff 
was  allowed  by  the  court  and  a  mandamus  authorized  to  issue  to  the 
Auditor,  to  issue  his  warrant  for  it  and  to  the  Treasurer  to  pay  it. 
Upon  this  decision  a  mandamus  was  issued  by  the  Court  and  the  claim 
was  paid,  although  there  was  a  special  act  of  the  Legislature  pro- 
viding that  the  claim  should  not  be  paid.  This  conflict  of  authority 
led   to   impeachment  proceedings,   found  in   Pub.    Doc.    1901,   vol.   2. 

For  an  instance  of  a  suit  by  one  State  against  another,  see  South 
Dakota  v.  North   Carolina,   192  U.  S.,  286. 

Office  as  a  contract. — In  Hoke  v.  Henderson,  15 — 1  (1833),  it  was 
held  that  a  public  office  is  property;  if  existing  under  the  Constitution, 
the  Legislature  can  not  destroy  or  change  it;  if  only  legislative,  it  may  be 
abolished  or  the  salary  changed  for  the  good  of  the  public,  but  it  can 
not  be  transferred  to  another  during  the  term  of  the  holder  nor  the 
emoluments  taken  away  for  the  purpose  of  forcing  a  vacancy.  This 
made  an  office  a  contract  between  the  State  and  the  office-holder.  The 
same  doctrine  was  held  in  Cotton  v.  Ellis,  52 — 542;  State  v.  Smith, 
65—369;  King  v.  Hunter,  65—603;  Clark  v.  Stanly,  66—59;  Bailey  v. 
Caldwell,  68—472;  Vann  v.  Pipkin,  77^08;  Bunting  v.  Gales,  77—283; 
Prairie  v.  Worth,  78—169;  Trotter  v.  Mitchell,  115—190.  The  ;'Office- 
holding  Cases"  growing  out  of  the  change  in  the  political  situation 
began  with  Wood  v.  Bellamy,  120 — 212  (1897),  sustaining  Hoke  v.  Hen- 
derson, and  continued  in  Ward  v.  Elizabeth  City,  121 — 3;  Caldwell  v. 
Wilson,  121 — 425;  Day's  Case,  124—362;  Bryan  v.  Patrick,  124—651; 
Wilson  v.  Tordan,  124 — 683;  White  v.  Hill,  125—194;  Green  v.  Owen, 
125—212;  McCall  v.  Webb,  125—243;  Abbott  v.  Beddingfield,  125—256; 
Dolby  v.  Hancock,  125—325;  Gattis  v.  Griffin,  125—332;  White  v.  Ayer, 
126—570;  Taylor  v.  Vann,  127—243.  In  1903,  Hoke  v.  Henderson  was 
overruled  in  Mial  v.  Ellington,  134 — 131. 

3.     Municipal  corporations. 

Const.,  art.  7,  sec.  7.  No  county,  city,  town,  or  other  municipal 
corporation  shall  contract  any  debt,  pledge  its  faith,  or  loan  its 
credit,  nor  shall  any  tax  be  levied,  or  collected  by  any  officers  of 
the  same,  except  for  the  necessary  expenses  thereof,  unless  by  a 
vote  of  a  majority  of  the  qualified  voters  therein. 

(92)  FAWCETT  v.  MT.  AIRY, 

134  N.  C,  125,  45  S.  E.,  1029,  63  L.  R.  A.,  870,  101  A.  S.  R..  825—1903. 

Montgomery,  T.  Whether  a  city  or  town  has  the  right  to  incur 
an  indebtedness  for  the  erection  and  operation  of  plants  for  the 
supply  of  water  and  electric  lights  for  municipal  use  and  to  sell  to 
its  inhabitants  is  a  necessary  municipal  expense,  is  the  question 
again  presented  to  us  for  decision.  Indebtedness  incurred  by  a  city 
or  town  for  a  supply  of  water  stands  on  the  same  footing  as  in- 
debtedness incurred  for  lighting  purposes,  and  if  such  indebtedness 
be  a  necessary  expense,  then  whether  or  not  a  municipality  may 
incur  it,  does  not  depend  upon  the  approval  of  the  proposition  by 
a  majority  of  the  qualified  voters  of  the  municipality.  It  is  only 
in  cases  where  counties,  cities  or  towns  undertake  to  contract  debts 


CAPACITY    OF     PARTIES.  225 

or  pledge  their  faith,  or  loan  their  credit  or  levy  taxes,  except  for 
the  necessary  expenses  thereof,  that  the  submission  of  the  propo- 
sition must  be  made  to  a  vote  of  the  qualified  voters  of  such  coun- 
ty, city  or  town.  Wilson  v.  Comrs.,  74  N.  C,  748 ;  Tucker  v. 
Comrs.,  75  N.  C,  274. 

It  is  almost  impossible  to  define  in  legal  phraseology  the  meaning 
of  the  words  "necessary  expense"  as  applied  to  the  wants  of  a  city 
or  town  government.  A  precise  line  can  not  be  drawn  between 
what  are  and  what  are  not  such  expenses.  The  consequence  is 
that  as  municipalities  grow  in  wealth  and  population,  as  civiliza- 
tion advances  with  the  habits  and  customs  of  necessary  changes, 
the  aid  of  the  courts  is  constantly  invoked  to  make  decisions  on 
this  subject.  In  the  nature  of  things  it  could  not  be  otherwise; 
and  it  is  not  to  be  expected,  in  the  changed  conditions  which  occur 
in  the  lives  of  progressive  people,  that  things  deemed  unnecessary 
in  the  government  of  municipal  corporations  in  one  age  should  be 
so  considered  for  all  future  time.  In  the  efforts  of  the  courts  to 
check  extravagance  and  to  prevent  corruption  in  the  government  of 
towns  and  cities,  the  judicial  branch  of  the  government  has  prob- 
ably stood  by  former  decisions  from  too  conservative  a  standpoint, 
and  thereby  obstructed  the  advance  of  business  ideas  which  would 
be  most  beneficial  if  put  into  operation ;  and  this  conservatism  of 
the  courts,  outgrown  by  the  march  of  progress,  sometimes  appears 
at  a  serious  disadvantage. 

On  this  subject  this  court,  in  Wilson  v.  Comrs.,  supra,  uses  the 
following  instructive  and  suggestive  language: 

"The  analogy  of  the  law  for  the  necessities  of  infants  is  the  only 
one  that  occurs  to  us.  It  is  held  that  if,  considering  the  means  and 
station  of  life  of  the  infant,  the  articles  sold  to  him  may  be  neces- 
sary under  any  circumstances,  they  come  within  a  class  for  which 
the  infant  may  be  liable,  and  upon  his  refusal  to  pay  it  is  for  a 
jury  to  determine  whether  under  the  actual  circumstances  they 
were  necessary.  If,  however,  the  articles  are  merely  ornamental 
and  such  as  can  not  under  any  circumstances  be  necessary  to  one 
of  the  means  and  station  of  the  infant,  the  court  may  as  a  matter 
of  law  declare  that  the  infant  is  not  liable.  We  do  not  undertake 
to  say  that  this  analogy  will  furnish  a  rule  which  will  admit  of  a 
close  application.  But  if  treated  merely  as  an  analogy  in  the  ab- 
sence of  other  guides,  it  may  be  of  some  general  use." 

It  seems  strange  that  it  should' be  declared  by  some  of  the  courts 
of  highest  reputation  that  the  purchase  of  a  town  clock  or  hay 
scales  or  a  pump  is  a  necessary  expense,  when  the  supply  of  light 
to  enable  its  citizens  to  walk  its  streets  in  security,  or  a  supply  of 
wholesome  water  to  prevent  disease  and  suffering,  should  be  held 
as  not  a   necessary   expense.      It   is   pretty   generally   held   by   the 


226  FORMATION    OF    CONTRACT. 

courts  that  the  expense  incurred  for  widening  the  streets  is  a  nec- 
essary expense,  that  a  market-house  is  a  necessary  expense,  and 
surely  if  that  be  sound  law  the  courts  ought  to  hesitate  before  they 
would  pronounce  a  debt  incurred  for  the  furnishing  of  light  and 
water  not  to  be  a  necessary  expense.  And  it  seems  to  us  that  it 
may  be  reasonably  considered  as  certain  that  the  words  "necessary 
expense"  do  not  mean  expenses  incurred  or  to  be  incurred  for  pur- 
poses or  objects  that  are  only  for  the  procurement  or  maintenance 
of  things  absolutely  essential  to  the  existence  of  the  municipality. 
The  expenditure  of  money  for  the  widening  of  streets,  the  erection 
of  market-house,  town  clocks  and  hay  scales  are  all  considered  as 
necessary  expenses,  and  those  things  are  not  essential  to  the  life  of 
the  municipality.  A  city  or  town  might  be  fairly  well  governed 
and  be  prosperous  without  having  appointed  and  fixed  particular 
places  for  the  sale  of  market  produce,  or  without  keeping  the  time 
of  day,  or  weighing  grain  and  fodder;  and  certainly  expenses  in- 
curred for  water  and  light  are  more  necessary  than  those  for  a 
market-house,  clocks  and  scales.  The  words  "necessary  expense," 
then,  must  mean  such  expenses  as  are  or  may  be  incurred  in  the 
establishing  and  procuring  of  those  things  without  which  the  peace 
and  order  of  the  community,  its  moral  interests  and  the  protec- 
tion of  its  property  and  that  of  the  property  and  persons  of  its  in- 
habitants would  seriously  suffer  considerable  damage,  leaving  out 
of  view  the  matter  of  the  great  inconvenience  that  would  be  at- 
tendant upon  our  present  social  life  for  want  of  such  expenditures. 
The  use  of  water  from  wells  dug  in  populous  communities  is  pro- 
scribed by  the  recent  progress  made  in  the  science  of  bacteriology, 
the  practical  lessons  of  that  science  having  been  learned  by  the 
people  generally. 

It  is  of  common  knowledge  that  the  most  fearful  scourges  of 
certain  most  dangerous  forms  of  fever  arise  from  the  use  of  water 
from  wells  in  towns  and  cities;  and  it  is  out  of  the  power  of  indi- 
viduals in  towns  and  cities  to  erect  and  operate  appliances  for  sup- 
ply of  water.  As  to  the  question  of  lighting  the  streets  and  public 
places,  the  experience  of  all  who  live  in  towns  and  cities  of  any 
considerable  population  is  that  without  lights  upon  the  streets  and 
in  the  public  buildings  both  life  and  property  would  be  insecure,  to 
say  nothing  of  the  almost  complete  destruction  of  the  conveniences 
of  life  and  the  marring  of  its  social  features.  The  fire  department, 
probably  the  most  important  of  the  municipal  departments,  would 
be  rendered  ineffective,  and  a  considerable  part  of  the  commerce — 
trade  of  the  country — would  be  destroyed  ;  for  under  our  changed 
conditions  a  good  deal  of  the  traffic  between  different  communities 
and  a  respectable  part  of  our  mail  service  are  conducted  at  night. 
It  will  not  do  to  say  that  a  city  or  town  may  expend  money  or 


CAPACITY    OF    1WRT1KS.  227 

incur  a  debt  for  the  purchase  of  lights  by  the  month  or  year,  but 
that  it  may  not  incur  a  debt  for  the  construction  and  operation  of 
a  system  of  waterworks  or  for  the  installment  of  an  electric  plant 
for  lighting.  If  the  matter  of  lighting  is  a  necessary  expense,  then 
how  and  in  what  manner  the  city  shall  furnish  such  lighting  is 
with  the  authorities  of  the  city  or  town  to  determine.  The  courts 
determine  what  class  of  expenditures  made  or  to  be  made  by  a 
municipal  corporation  come  under  the  definition  "necessary  ex- 
penses." The  governing  authorities  of  the  municipal  coq^orations 
are  vested  with  the  power  to  determine  when  they  are  needed,  and. 
except  in  cases  of  fraud,  the  courts  can  not  control  the  discretion 
oi  the  commissioners. 

Our  conclusion,  then,  is  that  an  expense  incurred  by  a  city  or 
town  for  the  purpose  of  building  and  operating  plants  to  furnish 
water  and  lights  is  a  necessary  expense,  and  is  not  such  a  debt  as 
must  be  submitted  to  a  popular  vote  before  it  can  be  incurred, 
under  section  7  oi  Article  Y1I  of  the  Constitution:  and  that  under 
the  general  law  of  North  Carolina  in  respect  to  cities  and  towns. 
The  Code.  sees.  3800  and  3821,  municipal  corporations  may  con- 
tract such  debts  and  provide  for  their  payment,  unless  there  is 
some  feature  in  the  charter  of  such  city  or  town  which  forbids  it. 

The  power  to  light  the  streets  and  public  buildings  and  places  of 
a  city  is  one  of  implication,  where  it  is  not  specially  conferred. 
because  the  use  of  such  power  is  necessary  to  fully  protect  the 
lives  and  comfort  and  property  of  its  inhabitants.  It  is  a  most  im- 
portant factor,  too.  in  the  preservation  of  the  peace  and  order  of 
the  community.  Croswell  Law  of  Klect..  sec.  190;  Mauldin  v. 
Greenville,  33  S.  C.  1.  S  1..  R.  A..  291  :  Lot  v.  Waycross,  84  Ga.. 
681.  In  the  case  of  Crawfordsville  v.  Braden,  loo  Ind..  157.  14 
1..  R.  A..  268,  30  Am.  St.  Rep.,  214,  the  court  said:  "So  far  as 
lighting  the  streets,  alleys  and  public  places  of  a  municipal  corpora- 
tion is  concerned,  independently  of  any  statutory  power,  the  mu- 
nicipal authorities  have  inherent  power  to  provide  for  lighting 
them.  If  so.  unless  their  discretion  is  controlled  by  some  statutory 
restriction,  they  may  in  their  discretion  provide  that  form  of  light 
which  is  best  suited  to  the  wants  and  financial  condition  of  the  cor- 
poration." It  is  well  settled  that  the  discretion  of  municipal  cor- 
porations within  the  sphen  their  powers  is  not  subject  to  judi- 
cial control,  except  in  cases  where  fraud  is  shown,  or  where  the 
power  and  discretion  are  grossly  abuse  I  the  oppression  of  the 
citizen.  We  can  see  no  good  reason  why  they  may  not  also,  with- 
out statutory  authority,  provide  and  maintain  the  necessary  plant 
to   generate   and   supply   the   electricity    required.      Possessing   the 

>wer   to   do   the   lighting,  that  power  carries   with   it   incidentally 


228  FORMATION    OF    CONTRACT. 

the  further  power  to  procure  or  furnish  whatever  is  necessary  for 
the  production  and  dissemination  of  the  light. 

The  cases  on  this  subject  heretofore  decided  by  this  court  to  the 
contrary  of  the  present  decision,  one  of  which  was  written  for  the 
court  by  this  writer,  are  overruled.  The  conclusion  to  which  the 
present  Chief  Justice  arrived  in  Mayo  v.  Comrs.,  122  N.  C,  5, 
40  L.  R.  A.,  163,  is  the  conclusion  at  which  we  have  arrived  in 
this  case. 

In  the  case  before  us  the  defendant,  the  town  of  Mount  Airy, 
was  authorized  by  an  act  of  the  General  Assembly  at  its  session  of 
1901,  Private  Acts,  chap.  216,  to  submit  to  the  qualified  voters  of 
the  town  the  question  of  issuing  $50,000  of  town  bonds  for  the 
purpose  of  defraying  the  expenses  of  constructing  a  system  of 
waterworks  and  installing  an  electric  plant  to  furnish  the  town 
with  water  and  light.  The  question  was  submitted  and  carried, 
and  the  bonds  were  issued  and  sold.  The  proceeds  were  applied 
for  the  purposes  mentioned  in  the  act,  but  were  insufficient  to 
complete  the  plants.  The  Board  of  Aldermen  of  the  town  then 
passed  an  ordinance  that  they  do  borrow  the  sum  of  $15,000  upon 
pledging  repayment  by  issuing  bonds  of  like  amount  with  interest. 

The  plaintiffs  commenced  this  action  to  enjoin  the  issuing  of 
the  bonds,  and  the  injunction  was  granted  by  His  Honor,  Judge 
McNeill,  and  the  defendant  appealed.  His  Honor  followed  the 
decisions  of  this  court,  and  the  error  he  committed  was  not  his 
own ;  but  it  was  error,  nevertheless.  Reversed. 

Counties,  cities,  towns,  townships,  school  districts,  etc.,  are  only- 
organizations  for  the  purpose  of  carrying  out  the  objects  of  government, 
their  powers  are  fixed  by  the  Constitution  and  statutes,  and  they  are 
subject  to  the  legislative  will.  White  v.  Comrs.,  90 — 437;  McCormac  v. 
Comrs.,  90 — 441;"Dare  v.  Currituck,  95—189;  Manuel  v.  Comrs.,  98—9; 
Tate  v.  Comrs..  122—812;  Prichard  v.  Comrs.,  126—908;  Bell  v.  Comrs., 
127—85:  Moody  v.  State  Prison,  128—12;  McTlhenny  v.  Wilmington, 
127—150;  Jones  v.  Comrs.,  130—451;  137— p.  596;  Comrs.  v.  Trust  Co., 
143—110. 

So  where  the  township  trustees  were  authorized  to  levy  and  collect 
taxes  to  pay  necessary  expenses,  and  certain  debts  were  thereby  con- 
tracted, and  then  the  power  was  taken  away  and  another  method  of 
payment  provided,  the  trustees  can  not  proceed  further,  and  the  remedy 
of  the  creditor  is  through  the  Legislature.  Mitchell  v.  Trustees,  71 — 
400;  Wallace  v.  Trustees,  84—164. 

Contracts  for  necessary  expenses. — The  county  commissioners  have 
the  right  to  contract  for  the  payment  of  the  necessary  expenses  of  the 
county  without  a  popular  vote,  but  not  for  other  purposes,  and  the 
Legislature  can  not  authorize  them  to  do  so.  McCless  v.  Meekins,  117 
— 34.  But  it  seems  that  where  the  Legislature  authorizes  the  municipal 
corporation  to  contract  the  debt  by  first  submitting  the  question  to  a 
popular  vote,  this  vote  is  a  necessary  condition.  Wadsworth  v.  Concord, 
133—587;  Asheville  v.  Webb,  134 — 72;  Robinson  v.  Goldsboro.  135— 
382,  which  were  electric  light  cases,  and  Greensboro  v.  Scott,  138 — 181 
Cwaterworks),  where  a  similar  provision  as  to  popular  vote  had  been 
abrogated  by  a  subsequent  act.  See  also  Vaughan  v.  Comrs.,  1J7 — 429 
(courthouse);  Swinson  v.  Mt.  Olive,  147 — 611:   Burgin  v.  Smith,  151 — 561. 


CAPACITY     OF     PARTIES.  229 

Bridges. — Broaclnax  v.  Groom,  64 — 244;  Satterthwaite  v.  Comrs.,  76 — 
153;  Evans  v.  Comrs.,  89—154;  Greenleaf  v.  Comrs.,  123—30;  McPeters 
v.  Blankenship,  123 — 651.  Roads  and  bridges — Paine  v.  Caldwell,  65 — 
488;  Bridge  Co.  v.  Comrs.,  111—317;  Herring  v.  Dixon,  122 — 421;  Tate 
V.  Comrs.,  122—812;  Glenn  v.  Comrs.,  139—412;  Crocker  v.  Moon,  140 
— 429.  Streets — Wilson  v.  Charlotte,  74 — 758;  Tucker  v.  Raleigh,  75 — 
267;  Young  v.  Henderson,  76 — 420;  Stratford  v.  Greensboro,  124—127; 
Merrimon  v.  Paving  Co.,  142 — 539.  Courthouse — Halcombe  v.  Comrs., 
89_346;  Long  v.  Comrs.,  76—273;  Vaughan  v.  Comrs.,  117 — 429.  Guard- 
house or  jail — McLin  v.  New  Bern,  70 — 12.  Markethouse — Smith  v. 
New  Bern,  70 — 14.  Paying  officers,  etc. — Gardner  v.  New  Bern,  98 — 228. 
Waterworks  and  electric  lights  were  held  not  to  be  necessary  ex- 
penses in  Charlotte  v.  Shepard,  120 — 411;  Mayo  v.  Comrs.,  122 — 5;  Thrift 
v.  Elizabeth  City,  122—31;  Edgerton  v.  Water  Co.,  126—93.  These  are 
overruled  by  the  principal  case,  which  is  sustained  in  Davis  v.  Free- 
mont,  135 — 538;  Hightower  v.  Raleigh,  150 — 569  (municipal  building); 
Burgin  v.  Smith,  151 — 651  (courthouse);  Bradshaw  v.  High  Point.  151 — 
517  (waterworks);  Comrs.  v.  Webb.  148 — 120;  Hendersonville  v.  Jor- 
dan, 150 — 35  (streets);  but  public  schools  are  not  a  necessary  expense 
of  a  municipal  corporation.  Hollowell  v.  Borden,  148 — 255;  Moran 
v.   Comrs.   (N.  C),  84  S.   E.,  402. 

Majority  of  qualified  voters. — Where  the  contract  is  not  for  necessary 
expense,  the  popular  vote  is  necessary.  The  imperative  requirement  of 
the  Constitution  is  that  there  shall  be  a  concurrence  of  the  legislative 
and  popular  will;  the  former  evidenced  by  authority  to  vote,  the  latter 
by  the  record  that  a  majority  of  the  qualified  voters  have  voted  favor- 
ably. Claybrook  v.  Comrs.,  114 — 453;  117 — 456;  Bank  v.  Comrs.,  116— 
339;  R.  R.  v.  Comrs.,  116—563.  This  provision  means  not  merely  a 
majority  of  those  voting,  but  a  majority  of  the  registered  voters.  Reiger 
v.  Comrs.,  70—319;  R.  R.  v.  Comrs.,  72—486;  Norment  v.  Charlotte,  85— 
387;  Southerland  v.  Goldsboro,  96—49;  Duke  v.  Brown,  96—127;  Mc- 
Dowell v.  Contsruction  Co.,  96—514;  Rigsbee  v.  Durham,  98—81;  99— 
341;  Smith  v.  Wilmington,  98—343;  R.  R.  v.  Comrs.,  109—159.  It  is 
sufficient  if  a  majority  actually  vote,  whether  required  by  the  act  or  not. 
Wood  v.  Oxford,  97—227;  and  the  finding  by  the  proper  authorities  that 
p  majority  did  vote  is  prima  facie  correct,  and  can  not  be  questioned 
collaterally.  Rigsbee  v.  Durham,  98 — 81;  99 — 341.  Special  legislation 
is  necessary  to  authorize  a  tax  levy  above  that  provided  in  the  Consti- 
tution, but  it  does  not  need  the  popular  vote.     Cases  above  cited. 

Where  municipal  authorities  have  the  discretion,  the  courts  can  not 
control  the  exercise  of  it  in  the  absence  of  fraud,  Broadnax  v.  Groom, 
64—244;  Long  v.  Comrs.,  76—273;  Burwell  v.  Comrs..  93—73;  Green- 
leaf  v.  Comrs.,  123 — 30.  But  the  commissioners  of  a  county  can  not 
bind  themselves  by  a  contract  to  maintain  perpetually  a  certain  road  or 
bridge  so  as  to  give  a  citizen  a  cause  of  action  against  them  for  breach 
of  contract;  since  their  discretion  must  be  used  for  the  public  good. 
Glenn  v.  Comrs.,  139—412.  The  power  to  borrow  money  is  not  neces- 
saiily  incident  to  the  power  to  contract  for  necessaries.  Davis  v. 
Comrs.,  74 — 374;  Daniel  v.  Comrs.,  74 — 494. 

County  commissioners  may  contract  for  the  services  of  an  attorney, 
Raper  v.  Laurinburg,  90—427;  Hancock  v.  Comrs.,  132—209;  Wilmington 
v.  Bryan,  141 — 666. 

Caring  for  the  poor. — There  must  be  an  express  contract,  or  the 
service  must  be  rendered  at  the  request  of  the  commissioners,  express 
or  implied.  Copple  v.  Comrs.,  138 — 127.  Between  counties  the  statute 
fixes  the  liabilitv.  The  Code,  3544;  Revisal,  1333,  1334;  Burke  v.  Bun- 
combe, 101—520;  McDowell  v.  Forsyth,  121—295. 

An  account  against  the  county  must  be  itemized  and  verified.  Revisal, 
1385;  and  its  allowance  by  the  commissioners  is  only  prima  facie  evi- 
dence that  it  is  correct.  Abernethy  v.  Phifer,  84 — 711;  Turner  v.  McKee, 
137 — 251.     County  orders  must  be  presented  within  two  years.     Revisal, 


230  FORMATION    OF    CONTRACT. 

396;  Royster  v.  Comrs.,  98 — 148;  and  they  are  not  negotiable.     McPeeters 
v.   Blankenship,   123 — 651. 

A  county  can  not  mortgage  the  public  property.  Vaughan  v.  Comrs., 
118 — 636;  nor  can  the  commissioners  delegate  their  authority.  Mc- 
Phail  v.  Comrs.,  119 — 330.  A  town  can  not  sell  land  dedicated  as  a 
street  and  with  reference  to  which  lots  have  been  bought,  though 
the  street  was  not  used  and  the  Legislature  authorized  the  sale.  Moose 
v.  Carson,  104-^31;  Church  v.  Dula,  148—262. 

(93)  BANK  OF  RICHMOND  v.  COMMISSIONERS  OF 

OXFORD, 

119   N.    C,  214,  25   S.   E.,  966,  34   L.   R.   A.,  487—1896. 

This  was  a  civil  action  on  a  bond  issued  by  the  town  of  Oxford 
for  building  a  railroad.  There  was  a  judgment  for  the  plaintiff, 
and  defendant  appealed. 

Clark,  J.  When  this  case  was  here  before  (116  N.  C,  339), 
the  court  set  aside  the  nonsuit  taken  below  and  held  that  the 
plaintiff  could  maintain  an  action  as  the  case  was  then  presented. 
The  court  did  so  upon  the  ground  that,  there  being  apparently  a 
valid  liability  of  $40,000  against  the  town  of  Oxford,  the  com- 
promise thereof  for  the  sum  of  $20,000  was  not  necessarily  void, 
and  that  the  court  below  erred  in  nonsuiting  the  plaintiff.  The 
case  had  been  tried  upon  the  view  that  the  charter  of  the  town  of 
Oxford  authorized  the  election  under  which  the  $40,000  indebted- 
ness was  contracted.  The  Judge  below  held  that  this  was  not  so, 
and  hence  that  the  compromise  was  not  binding.  This  court  sus- 
tained the  view  taken  below,  that  the  town  charter  did  not  au- 
thorize the  contraction  of  the  indebtedness,  but  held  that,  on  its 
face,  the  act  chartering  the  railroad  (Acts  1891,  ch.  315,  sec.  10), 
authorized  the  election.  The  question  as  to  the  efficacy  of  that 
act  had  not  been  questioned  below,  as  the  plaintiff  had  rested  its 
claim  upon  the  authority  of  the  town  charter  to  sustain  the  election. 

The  questions  decided  before  need  not  be  called  in  controversy. 
We  must  take  it  that  our  former  opinion  settles  that  the  town  had 
authority  to  compromise  a  valid  liability  for  a  smaller  sum,  and 
that  the  Act  of  1891,  ch.  315,  on  its  face,  authorized  the  election. 
When  the  second  trial  was  had  below  the  point  was  taken  for  the 
first  time,  that,  conceding,  as  this  court  had  held,  that  the  Act  of 
1891,  ch.  315,  by  its  terms  authorized  the  election,  that  act  was 
invalid  because  not  passed  as  required  for  all  acts  empowering 
counties,  cities  and  towns  to  issue  bonds.  The  Constitution,  Art. 
II,  sec.  14.  This  section  of  the  Constitution  is  imperative  and  not 
recommendatory,  and  must  be  observed ;  otherwise  this  wise  and 
necessary  precaution  inserted  in  the  organic  law  would  be  con- 
verted into  a  nullity  by  judicial  construction.  It  was  intended  as 
a  safeguard,  and  has  been  held  mandatory  in  all  other  courts  in 


CAPACITY    OF    PARTIES.  231 

which  that  question  has  been  presented,  as  will  be  seen  below. 
This  point  was  not  raised  below  in  the  former  trial,  nor  in  this 
court,  as  the  plaintiff  was  then  relying  upon  the  charter  of  the 
town,  which  we  held  invalid  for  that  purpose.  On  the  second 
trial,  when  the  plaintiff  offered  for  the  first  time  the  Act  of  1891, 
ch.  315,  as  authority  to  show  a  valid  election  authorizing  the  in- 
debtedness of  $40,000  as  a  basis  to  authorize  the  compromise  (for, 
except  as  a  compromise,  the  judgment  would  be  void  on  its  face, 
being  ultra  vires),  the  defendant  contended  that  the  Act  of  1891, 
ch.  315,  while  valid  as  a  railroad  charter,  was  unconstitutional  and 
void,  so  far  as  authorizing  the  creation  of  an  indebtedness  by  the 
town,  because  not  enacted  in  the  manner  required  by  the  Consti- 
tution, Art.  II,  sec.  14.  The  Journals  were  put  in  evidence  and 
showed  affirmatively  that  the  act  was  not  read  three  several  days 
in  each  House,  and  that  the  ayes  and  noes  were  not  entered  on  the 
readings  in  the  House,  as  required  by  the  Constitution  for  acts 
authorizing  the  creation  of  public  indebtedness.  The  point,  there- 
fore, arises  for  the  first  time  in  this  case,  and  was  not  presented 
and  could  not  be  presented  in  the  former  appeal  for  the  reasons 
above  given.  The  point  is  one  of  transcending  importance,  and  is 
simply  whether  the  people,  in  their  organic  law,  can  safeguard  the 
taxpayers  against  the  creation  of  State,  county  and  town  indebted- 
ness by  formalities  not  required  for  ordinary  legislation,  and  must 
the  courts  and  the  Legislature  respect  those  provisions.  This  safe- 
guard is  section  14  of  Article  II  of  the  Constitution.  It  provides : 
"No  law  shall  be  passed  to  raise  money  on  the  credit  of  the  State, 
or  to  pledge  the  faith  of  the  State,  directly  or  indirectly,  for  the 
payment  of  any  debt,  or  to  impose  any  tax  upon  the  people  of  the 
State,  or  to  allow  the  counties,  cities  or  towns  to  do  so,  unless  the 
bill  for  the  purpose  shall  have  been  read  three  several  times  in  each 
House  of  the  General  Assembly  and  passed  three  several  readings, 
which  readings  shall  have  been  on  three  different  days  and  agreed 
to  by  each  House  respectively,  and  unless  the  yeas  and  nays,  on 
the  second  and  third  readings  of  the  bill,  shall  have  been  entered 
on  the  Journal."  The  Journals  offered  in  evidence  showed  affirma- 
tively that  "the  yeas  and  nays  on  the  second  and  third  reading  of 
the  bill"  were  not  "entered  on  the  Journal."  And  the  Constitution, 
the  supreme  law,  says  that,  unless  so  entered,  no  law  authorizing 
State,  counties,  cities  or  towns  to  pledge  the  faith  of  the  State  or 
to  impose  any  tax  upon  the  people,  etc.,  shall  be  valid. 

This  case  has  no  analogy  to  Carr  v.  Coke,  116  N.  C,  223.  That 
merely  holds  that  when  an  act  is  certified  to  by  the  Speakers  as 
having  been  ratified,  it  is  conclusive  of  the  fact  that  it  was  read 
three  several  times  in  each  House  and  ratified.  Const.,  Art.  II, 
sec.  23.     And  so  it  is  here;  the  certificate  of  the  Speakers  is  con- 


232  FORMATION    OF    CONTRACT. 

elusive  that  this  act  passed  three  several  readings  in  each  House 
and  was  ratified.  The  certificate  goes  no  further.  It  does  not 
certify  that  this  act  was  read  three  several  days  in  each  House 
and  that  the  yeas  and  nays  were  entered  on  the  Journals.  The 
Journals  were  in  evidence  and  showed  affirmatively  the  contrary. 
The  people  had  the  power  to  protect  themselves  by  requiring  in  the 
organic  law  something  further,  as  to  acts  authorizing  the  creation 
of  bonded  indebtedness  by  the  State  and  its  counties,  cities  and 
towns,  than  the  fact  certified  to  by  the  Speakers  of  three  readings 
in  each  House,  and  ratification.  This  organic  provision  plainly 
requires,  for  the  validity  of  this  class  of  legislation,  in  addition  to 
the  certificates  of  the  Speakers,  which  is  sufficient  for  ordinary 
legislation,  the  entry  of  the  yeas  and  nays  on  the  Journals  on  the 
second  and  third  readings  in  each  House.  It  is  provided  that  such 
laws  are  "no  laws,"  /'.  c,  are  void  unless  the  bill  for  the  purpose 
shall  have  been  read  three  several  times  in  each  House  of  the 
General  Assembly  and  passed  three  several  readings,  which  read- 
ings shall  have  been  on  three  different  days,  and  agreed  to  by  each 
House  respectively,  and  unless  the  yeas  and  nays  on  the  second 
and  third  readings  of  the  bill  shall  have  been  entered  on  the  Jour- 
nal. This  is  a  clear  declaration  of  the  nullity  of  such  legislation 
unless  this  is  done,  and  every  holder  of  a  State  or  municipal  bond 
is  conclusively  fixed  with  notice  of  this  requirement  as  an  essential 
to  the  validity  of  his  bond.  If  he  buys  without  ascertaining  that 
constitutional  authority  to  issue  the  bond  has  thus  been  given,  he 
has  only  himself  to  blame.  1  Dill.  Man.  Corp.,  545,  and  cases 
cited.  It  is  certainly  in  the  power  of  the  sovereign  people  in 
framing  their  Constitution  to  require  as  a  prerequisite  for  the 
validity  of  this  class  of  legislation  these  precautions  and  the  addi- 
tional evidence  in  the  Journals  that  they  have  been  complied  with, 
over  and  above  the  mere  certificate  of  the  Speakers  which  is  suffi- 
cient for  other  legislation.  That  the  organic  law  does  require  the 
additional  forms  and  the  added  evidence  of  the  Journals  is  plain 
beyond  the  power  of  controversy.  Accordingly,  the  law  is  well  set- 
tled by  nearly  one  hundred  adjudicated  cases  in  the  courts  of  last 
resort  in  thirty  States,  and  also  by  the  Supreme  Court  of  the 
United  States,  that  where  a  State  Constitution  prescribes  such  for- 
malities in  the  enactment  of  laws  as  require  a  record  of  the  yeas 
and  nays  on  the  legislative  Journals,  these  Journals  are  conclusive 
as  against  not  only  a  printed  statute  published  by  authority  of  law, 
but  also  as  against  a  duly  enrolled  act. 

[The  court   here  gives   a   list   of   the   authorities   to   sustain   the 
above  position.] 

Constitutional  requirements  as  to  the  style  of  acts  or  the  manner 
of   their   passage   are   mandatory,   not    directory.      State   v.    Patter- 


CAPACITY    OF     PARTIES.  233 

son,  98  N.  C,  660,  663,  665.  The  thirty  days'  notice  required 
before  the  passage  of  a  private  act  is  not  required  by  the  Consti- 
tution to  be  entered  on  the  Journals,  as  is  required  as  to  the  read- 
ings on  several  days,  and  the  ayes  and  noes  on  each  reading,  with 
bills  authorizing  the  contraction  of  public  indebtedness,  and  hence 
it  may  be  that  the  giving  of  such  thirty  days'  notice  is  conclu- 
sively presumed  as  to  such  private  acts  (Harrison  v.  Gordy,  57 
Ala.,  49;  Walker  v.  Griffith,  60  Ala.,  361),  though  the  contrary 
was  intimated  in  Gatlin  v.  Tarboro,  78  N.  C,  119. 

The  history  of  the  country  at  large,  and  of  this  State  as  well, 
has  shown  the  necessity  of  this  safeguard  as  to  acts  authorizing 
the  creation  of  public  indebtedness,  which  has  been  incorporated 
also  into  several  other  State  Constitutions.  We  have  no  power  nor 
wish  to  nullify  so  plain  and  mandatory  a  provision,  so  carefully 
and  explicitly  worded,  and  which  has  been  held  binding  by  all 
other  courts  wherever  the  question  has  been  presented. 

The  judgment  on  its  face  is  by  consent  and  for  a  railroad  sub- 
scription. It  is  therefore  on  its  face  to  be  treated  as  void,  being 
ultra  vires,  unless  a  special  authority  is  shown  authorizing  the 
indebtedness  for  which  it  was  a  compromise  (Kelly  v.  Milan,  127 
U.  S.,  150)  ;  for,  ex  virtute  officii,  town  commissioners  have  no 
authority  whatever  to  bind  the  town  by  submitting  to  a  consent 
judgment  for  $20,000  for  a  matter  appearing  on  the  face  of  the 
judgment  to  be  not  for  town  purposes.  If  the  commissioners  of 
the  town  were  vested  with  no  authority  to  create  the  debt,  they 
certainly  could  not  acquire  such  power  by  entering  into  a  consent 
judgment. 

[The  court  here  discusses  the  effect  of  such  consent  judgment, 
showing  that  it  could  have  no  more  effect  than  the  obligation  on 
which  it  was  founded  in  this  case;  citing  Kelly  v.  Milan,  supra, 
and  other  cases.] 

The  Constitution  makes  the  entry  on  the  Journals  essential  to 
the  validity  of  the  act.  If  it  be  conceded  that  presumption  of  reg- 
ularity arises  from  the  publication  of  the  act  in  this  case  it  was  re- 
butted, for  the  Journals  were  offered  by  the  defendant,  and 
showed  that  no  constitutional  authority  had  been  conferred  to  issue 
the  bonds  or  contract  the  indebtedness.  It  is  incumbent  upon  the 
purchaser  of  municipal  bonds  to  examine  whether  the  power^to 
issue  has  been  duly  granted.  Lake  v.  Graham,  130  U.  S.,  674; 
East  Oakland  v.  Skinner,  94  U.  S.,  255;  1  Dillon  Mun.  Corp.,  245. 
The  bonds  having  been  issued  without  authority,  were  absolutely 
void.  Marsh  v.  Fulton  Co.,  10  Wall.,  676;  Clark  v.  Hancock  Co., 
27  111.,  305.  The  payment  of  interest  is  no  ratification,  for  there 
can  be  no  ratification  when  there  is  want  of  power.  Doon  v. 
Cummins,   142  U.   S.,   376;  Davies   Co.   v.   Dickinson,    117  U.   S., 


234  FORMATION    OF    CONTRACT. 

657,  665;  Norton  v.  Shelby  Co.,  118  U.  S.,  425,  451;  Lewis  v. 
Shreveport,  108  U.  S.,  282,  287. 

In  instructing  the  jury  upon  the  evidence  to  find  the  issues  in 
favor  of  the  plaintiff  there  was  error.  Error. 

Faircloth,  C.  J.,  dissents. 

This  case  has  been  followed  in  numerous  other  cases.  Charlotte  v. 
Shepherd,  120—411;  122—602;  Comrs.  v.  Snuggs,  121—394,  39  L.  R. 
A.,  439,  190  U.  S.,  437;  Rodman  v.  Washington,  122—39;  Comrs.  v. 
Call,  123—308,  44  L.  R.  A.,  252,  180  U.  S.,  506,  190  U.  S.,  107;  Comrs.  v. 
Payne,  123 — 432;  McGuire  v.  Williams,  123 — 349;  Smathers  v.  Comrs.,  125 
480;  Glenn  v.  Wray,  126—730;  Comrs.  v.  DeRossett,  129—275;  Black  v. 
Comrs.,  129 — 121;  Hooker  v.  Greenville,  130 — 472;  Pritchard  v.  Comrs., 
160 — 476;  Debnam  v.  Chitty,  131 — 657,  holding  that  the  affirmative  and 
negative  votes  should  both  be  entered  on  the  Journal,  but  this  was 
overruled  in  Comrs.  v.  Trust  Co.,  143 — 110,  holding  that  it  is  sufficient 
if  the  affirmative  votes  are  entered  and  there  is  a  majority.  Graves 
v.  Comrs.,  135 — 49,  discusses  the  decision  of  the  Supreme  Court  of 
U.  S.  in  the  above  cases,  and  also  the  validity  of  township  bonds. 
As  to  township  bonds,  see  also  Brown  v.  Comrs.,  100 — 92;  Jones  v. 
Comrs.,  107 — 248.  School  districts  may  issue  bonds,  Smith  v.  Trus- 
tees, 141—143. 

In  Jones  v.  Comrs.,  137 — 579,  an  act  of  the  Legislature  ''authorizing 
and  empowering"  a  county  to  issue  bonds  to  pay  its  debts  for  necessary 
expenses,  is  considered  mandatory;  overruling  135 — 218  and  135 — 230. 

Sec.  2.     Private  corporations. 
1.  Organization   the  result   of  contract. 

(94)   MILLS  v.  WILLIAMS, 

33   N.   C,   558—1850. 

This  was  an  action  of  trespass  vi  et  armis,  for  an  assault  and 
battery.  The  county  of  Polk  was  organized  by  act  of  the  Legis- 
lature of  1846,  and  the  defendant  was  elected  and  qualified  as 
sheriff  of  the  county.  The  act  creating  the  county  was  repealed  in 
1848,  and  the  defendant  arrested  the  plaintiff  on  a  writ  which  was 
issued  and  came  to  his  hands  in  1849.  The  defendant  contended 
that  the  repealing  act  was  unconstitutional.  There  was  a  judg- 
ment for  the  plaintiff,  and  defendant  appealed. 

Pearson,  J.  In  1846,  the  Legislature  established  a  county  by 
the  name  of  "Polk."  In  pursuance  thereof  justices  of  the  peace 
were  appointed,  courts  organized,  and  a  sheriff  and  other  county 
officers  elected,  who  entered  upon  the  discharge  of  the  duties  of 
their  respective  offices.  In  1848  the  Act  of  1846  was  repealed,  and 
the  question  is  presented,  has  the  Legislature  a  right,  under  the 
Constitution,  to  repeal   an   act  by  which  a  county  is  established? 

From  the  formation  of  our  State  government,  the  General  As- 
sembly has,  from  time  to  time,  changed  the  limits  of  counties,  and 
has  over  and  over  again  made  two  counties  out  of  one,  so  that,  in 


CAPACITY    OF    PARTIES.  235 

many  instances,  even  the  name  of  the  old  county  has  been  lost; 
and  it  would  seem  to  an  unsophisticated  mind  that  where  there  is 
power  to  make  two  out  of  one,  there  must  be  the  corresponding 
power  to  make  one  out  of  two.  In  other  words,  as  the  Legisla- 
ture has,  undoubtedly,  the  power  to  divide  counties,  where  they 
are  too  large,  that  there  is  the  same  power  to  unite  them,  when 
they  are  too  small ;  the  power  in  both  cases  being  derived  from  the 
fact  that  by  the  Constitution  "all  legislative  power  is  vested  in  the 
General  Assembly,"  which  necessarily  embraces  the  right  to  divide 
the  State  into  counties  of  convenient  size,  for  the  good  govern- 
ment of  the  whole.  Political  and  other  collateral  considerations 
are  apt  to  connect  themselves  with  the  subject  of  corporations, 
and  thereby  give  to  it  more  importance  than  it  deserves,  as  a  dry 
question  of  law;  and  the  unusual  amount  of  labor  and  learning 
bestowed  on  it,  has  tended  to  mystify  rather  than  elucidate  the 
subject.  Divested  of  this  mystery,  and  measured  in  its  naked  pro- 
portions, a  corporation  is  an  artificial  body,  possessing  such  powers, 
and  having  such  capacities,  as  may  be  given  to  it  by  its  maker. 
The  purpose  in  making  all  corporations  is  the  accomplishment  of 
some  public  good.  Hence,  the  division  into  public  and  private  has 
a  tendency  to  confuse  and  lead  to  error  in  the  investigation ;  for, 
unless  the  public  are  to  be  benefited,  it  is  no  more  lawful  to  con- 
fer "exclusive  rights  and  privileges"  upon  an  artificial  body  than 
upon  a  private  citizen. 

The  substantial  distinction  is  this :  some  corporations  are  created 
by  the  mere  will  of  the  Legislature,  there  being  no  other  party 
interested  or  concerned.  To  this  body  a  portion  of  the  power  of 
the  Legislature  is  delegated  to  be  exercised  for  the  public  good, 
and  subject  at  all  times  to  be  modified,  changed,  or  annulled. 

Other  corporations  are  the  result  of  contract.  The  Legislature 
is  not  the  only  party  interested ;  for,  although  it  has  a  public  pur- 
pose to  be  accomplished,  it  chooses  to  do  it  by  the  instrumentality 
of  a  second  party.  These  two  parties  make  a  contract.  The  Leg- 
islature, for  and  in  consideration  of  certain  labor  and  outlay  of 
money,  confers  upon  the  party  of  the  second  part  the  privilege  of 
being  a  corporation,  with  certain  powers  and  capacities.  The  ex- 
pectation of  benefit  to  the  public  is  the  moving  consideration  on 
one  side ;  that  of  expected  remuneration  for  the  outlay  is  the  con- 
sideration on  the  other.  It  is  a  contract;  and,  therefore,  can  not 
be  modified,  changed  or  annulled  without  the  consent  of  both 
parties. 

So,  corporations  are  either  such  as  are  independent  of  all  con- 
tracts, or  such  as  are  the  fruit  and  direct  result  of  a  contract. 

The  division  of  the  State  into  counties  is  an  instance  of  the  for- 
mer.    There  is  no  contract — no  second  party,  but  the  sovereign, 


236  FORMATION    OF    CONTRACT. 

for  the  better  government  and  management  of  the  whole,  chooses 
to  make  the  division  in  the  same  way,  that  a  farmer  divides  his 
plantation  off  into  fields  and  makes  cross  fences,  where  he  chooses. 
The  sovereign  has  the  same  right  to  change  the  limits  of  counties, 
and  to  make  them  smaller  or  larger  by  putting  two  into  one,  or 
one  into  two,  as  the  farmer  has  to  change  his  fields ;  because  it  is 
an  affair  of  his  own,  and  there  is  no  second  party,  having  a  direct 
interest. 

A  railroad  is  an  instance  of  the  latter — certain  individuals  pro- 
pose to  advance  capital,  and  make  a  road  by  which  it  is  supposed 
the  public  are  to  be  benefited,  in  consideration  that  the  Legisla- 
ture will  incorporate  them  into  a  company  with  certain  privileges. 
The  bargain  is  struck  ;  neither  party  has  a  right  to  modify,  change, 
annul,  or  repeal  the  charter  without  the  consent  of  the  other ;  and 
(still  to  borrow  an  illustration  from  the  farmer),  he  has  in  this 
case  leased  out  his  field  at  a  certain  rent,  and  has  no  right  to  make 
one  larger  and  another  smaller,  without  the  consent  of  his  tenant. 

Roads  furnish  another  familiar  illustration.  The  County  Court 
has  a  public  road  laid  out,  and  an  overseer  and  hands  appointed. 
It  may  be  altered  or  discontinued  by  the  county  authorities,  and 
the  overseer  and  hands  have  no  direct  interest  or  right  to  be  heard 
in  the  matter,  except  as  other  citizens.  But  if  the  Legislature, 
instead  of  acting  by  its  agent,  the  county  authorities,  choose  to 
make  a  contract  with  certain  individuals,  that  if  they  will  raise 
funds  and  make  a  road  they  shall  be  incorporated  with  the  right 
to  exact  tolls,  etc.,  then  the  road  can  not  be  altered  or  discontinued 
without  the  consent  of  the  corporation. 

When  a  county  is  established,  it  is  done  at  the  mere  will  of  the 
Legislature,  because,  in  its  opinion,  the  public  good  will  be  thereby 
promoted.  There  is  no  second  party  directly  interested  or  con- 
cerned. There  is  no. contract,  for  no  consideration  moves  from  any 
one,  and  without  a  consideration,  there  can  not  be  a  contract.  The 
discharge  of  certain  duties  by  the  persons,  who  are  appointed  jus- 
tices of  the  peace,  or  sheriff,  clerk,  or  constable,  can,  in  no  sense 
of  the  wrord,  be  looked  upon  as  a  consideration  for  establishing  the 
county.  In  legal  parlance,  the  "consideration  is  past" — the  thing 
is  done,  before  their  appointment.  Some  act  for  the  honor  of  the 
station  ;  others  for  the  fees  and  perquisites  of  office,  but  their  so 
doing  did  not  form  a  consideration  for  the  erection  of  the  county, 
and  is  a  mere  incident  to  their  relation  as  citizens  of  the  county. 

It  was  ingeniously  argued,  that,  upon  the  erection  of  a  county, 
certain  rights  attach  by  force  of  the  Constitution,  as  the  right  to 
have  at  least  one  member  in  the  House  of  Commons  ;  and  as  these 
rights  are  conferred  by  the  Constitution,  it  is  insisted  that  having 


CAPACITY    OF    PARTIES.  237 

attached,  it  is  not  in  the  power  of  the  Legislature  to  take  them 
away. 

The  argument  is  hased  upon  a  fallacy.  It  is  true,  the  Constitu- 
tion invests  every  county  with  certain  rights,  as  incident  to  its 
existence  as  a  county.  But  hy  no  sound  reasoning  can  the  inci- 
dent he  made  to  override  the  principal ;  and  the  Constitution,  hy 
conferring  these  incidental  rights,  can  not  he,  by  any  fair  infer- 
ence, made  to  interfere  with  the  control  of  the  Legislature  on  the 
subject  of  counties,  as  instruments  for  the  good  government  and 
management  of  the  whole  State. 

The  Constitution  preordains  these  rights,  but  they  are  put  ex- 
pressly as  incidents  to  the  existence  of  counties;  and  although  they 
may  very  properly  enter  into  the  question  of  expediency,  they  have 
no  legislative  bearing  upon  the  power  to  create  and  abolish  coun- 
ties, as  may  to  the  wisdom  of  the  Legislature  seem  fit.  Such  stat- 
utes are  not  the  result  of  contracts.  There  is  no  second  party, 
who  pays  a  consideration,  which  is  the  essence  of  every  contract. 
Turrett  v.  Taylor,  9  Cranch,  43  ;  Dartmouth  College  v.  Woodard, 
4  Wheaton,  663 ;  Phillips  v.  Bury,  2  T.  R.,  346. 

Per  Curiam.  Affirmed. 

See  also  Fertilizer  Co.  v.  Clute,  112 — 440.  In  Dartmouth  College  Case, 
cited  above,  the  court  held  that  to  change  the  charter  without  the  con- 
sent of  the  members  of  the  corporation  would  be  impairing  the  obli- 
gation of  a  contract.  As  to  the  effect  of  a  change  upon  the  stockholders, 
see  Bank  v.  Charlotte,  85 — 433.  Changes  in  the  charters  are  now  regu- 
lated by  Const.,  Art.  VIII,  sec.  1.  "All  general  laws  and  special  acts 
passed,  pursuant  to  this  section,  may  be  altered  from  time  to  time  or 
repealed."  Revisal,  1135,  1136;  Womack  on  Corp.,  p.  32  et  seq.;  Clark 
on  Corp.,  p.  50  et  seq. 

2.     Express  and  implied  powers  of  contract. 

(95)   WISWALL  et  al.  v.  PLANK  ROAD  CO., 
56  N.   C,   183—1857. 

This  was  a  bill  in  equity,  by  the  plaintiffs  as  stockholders  in  the 
Greenville  and  Raleigh  Plank  Road  Company,  to  restrain  the  com- 
pany from  investing  surplus  funds  in  a  stage  line  and  making  a 
contract  to  carry  the  mails. 

Pearson,  J.  It  was  Conceded  in  the  argument  that  a  corpora- 
tion has  a  right  to  restrain  by  injunction  the  corporators  from  do- 
ing any  act  which  is  not  embraced  within  the  scope  and  purpose 
for  which  the  corporate  body  was  created,  and  which  would  be  a 
violation  of  the  charter ;  not  only  on  the  ground  that  such  act 
would  operate  injuriously  upon  the  rights  and  interests  of  the  cor- 
porators, but  on  the  further  ground  that  a  forfeiture  of  the  charter 
would  be  thereby  incurred. 


238  FORMATION    OF    CONTRACT. 

So,  the  only  question  made  by  the  demurrer  is  this :  Has  the 
company  power  to  purchase  stages  and  horses  to  be  run  upon  the 
said  roads?  and  has  it  likewise  power  to  enter  into  a  contract  to 
carry  the  United  States  mail  on  the  road  by  means  of  such  stages? 
This  question  must  be  decided  by  a  construction  of  the  charter. 
We  have  examined  it,  and  declare  our  opinion  to  be,  that  no  such 
power  is  given  to  the  company. 

The  first  section  sets  out  the  object  of  the  incorporation,  to  wit, 
"for  the  purpose  of  effecting  a  communication  by  means  of  a 
plank  road  from  Greenville  to  Raleigh." 

The  third  section  grants  the  franchise  of  incorporation,  and 
gives  all  the  powers,  rights  and  privileges  necessary  "for  the  pur- 
poses mentioned  in  this  act." 

The  ninth  section  invests  the  president  and  directors  of  the 
company  "with  all  the  rights  and  powers  necessary  for  the  con- 
struction, repair  and  maintaining  of  a  plank  road  to  be  located  as 
aforesaid." 

The  fourteenth  section  provides  for  the  erection  of  toll-houses 
and  gates. 

The  fifteenth  section  provides  for  the  collection  of  toll  to  be  "de- 
manded and  received  from  all  persons  using  the  said  plank  road," 
with  a  proviso  that  the  tolls  shall  be  so  regulated  that  the  profits 
shall  not  exceed  twenty-five  percent  on  the  capital  in  any  one  year. 

These  sections  contain  the  substantive  provisions ;  the  others 
merely  embrace  the  details  necessary  for  the  formation  of  the  com- 
pany, etc. 

The  mere  statement  makes  the  question  too  plain  for  observa- 
tion. If,  under  the  power  to  construct,  repair  and  maintain  a 
plank  road,  a  power  can  be  implied  to  buy  stages  and  horses  and 
become  a  mail  contractor,  the  company,  by  a  parity  of  reasoning, 
has  an  implied  power  to  set  up  establishments  at  convenient  points 
along  the  road  for  the  purchase  of  produce  to  be  carried  over  its 
road.  Besides,  how  are  tolls  to  be  demanded  and  received,  and 
how  are  the  profits  of  this  enlarged  operation  to  be  regulated? 
How  are  losses  from  such  speculations  to  be  guarded  against? 

It  may  as  well  be  contended  that  a  turnpike  company,  from  its 
power  to  construct,  repair  and  maintain  the  road,  has,  by  implica- 
tion, power  to  embark  in  the  business  of  mail  contractor,  or  in 
buying  and  selling  horses,  cattle,  or  produce,  under  the  suggestion 
that  the  road  would  be  subservient  to  these  purposes. 

Let  the  demurrer  be  overruled. 

Per  Curiam.  Decree  accordingly. 

A  corporation  has  implied  power  to  use  the  means  to  carry  out  the 
obiects  of  its   creation.     P>arce11o  v.   Hapffood,   118 — p.  729. 

See  Womack  on  Corp.,  p.  52  ct  scq.;  Clark  on  Corp.,  p.  120  ct  scq.: 
Revisal.  1128,  1129. 


CAPACITY    OF    PARTIES.  239 


3.     Manner  and  form  of  contract. 

(96)  DUKE  v.  MARKHAM, 
105  N.  C,  131,  10  S.  E.,  1017,  18  A.  S.  R.,  889—1890. 

Clark,  J.  This  was  a  claim  and  delivery  proceeding  brought 
against  defendant,  who  as  sheriff  of  Durham  County  had  taken 
possession  of  certain  personal  property  of  a  corporation,  the  Dur- 
ham Sash,  Door  and  Blind  Manufacturing  Company,  by  virtue  of 
executions  in  his  hands,  and  had  advertised  the  same  for  sale. 
The  plaintiff  claims  the  property  by  virtue  of  the  mortgage  of 
November  15,  1888,  given  to  indemnify  him  against  loss  as  surety 
to  said  company  upon  a  note  to  the  bank,  which  would  fall  due 
November  15,  1889.  The  conclusion  of  the  mortgage  and  the  pro- 
bate are  in  the  following  words:  "In  witness  whereof  the  Dur- 
ham Sash,  Door  and  Blind  Manufacturing  Company  sign  by  the 
names  of  president,  secretary,  and  treasurer  and  two  stockholders, 
and  attest  their  seals.  W.  F.  Remington,  President;  L.  W.  Gris- 
som,  Secretary  and  Treasurer;  W.  A.  Wilkerson,  Stockholder; 
Walter  Wilkerson,  Stockholder.  Witness :  Geo.  W.  Watts.— North 
Carolina,  Durham  County.  The  execution  of  the  foregoing  instru- 
ment was  this  day  acknowledged  on  the  part  of  L.  W.  Grissom 
and  proven  on  the  oath  and  examination  of  L.  W.  Grissom  as  to 
W.  F.  Remington,  W.  A.  Wilkerson,  and  Walter  Wilkerson.  Let 
the  same,  with  this  certificate,  be  registered.  This  November  15th, 
1888.     D.  C.  Mangum,  C.  S.  C." 

We  think  His  Honor  erred  in  admitting  the  mortgage  in  evi- 
dence upon  such  probate,  and  likewise  in  instructing  the  jury, 
upon  the  proof  offered  by  plaintiff,  that  it  was  valid  as  to  creditors 
whom  defendant  represented  by  virtue  of  the  executions  in  his 
hands.  In  Pierce  v.  Building  Co.,  9  La.,  397,  it  is  held  that  the 
act  of  a  majority  of  the  stockholders,  expressed  elsewhere  than  at 
a  meeting  of  stockholders,  as  where  the  assent  of  each  one  is  given 
separately  and  at  different  times,  is  not  binding  on  the  corpora- 
tion. The  same  is  true  of  a  meeting  of  which  notice  is  not  given. 
Stow  v.  Wyse,  18  Amer.  Dec,  99,  and  notes;  Cook  Stocks,  sec. 
594;  1  Potter  Corp.,  sec.  336,  and  notes.  In  Leggett  v.  Banking 
Co.,  1  N.  J.  Eq.,  541.  it  is  held  that  a  corporation  is  only  bound 
by  an  agent's  acts  when  within  the  scope  of  his  authority,  and  that 
a  president  and  cashier,  as  such,  can  not  execute  a  mortgage  of 
corporate  property  without  special  authority  from  the  board  of  di- 
rectors or  the  stockholders  ;  and  that  the  proceeds  of  a  mortgage 
have  been  applied  to  the  use  of  the  corporation,  in  paying  its  debts 
or  otherwise,  is  not  sufficient  to  render  the  mortgage  binding,  if  its 
execution  was  not  properly  authorized.     "The  members  of  a  cor- 


240  FORMATION    OF    CONTRACT. 

poration  aggregate  can  not  separately  and  individually  give  their 
consent  in  such  a  manner  as  to  oblige  themselves  as  a  collective 
body,  for  in  such  case  it  is  not  the  body  that  acts ;  and  this  is  no 
less  the  doctrine  of  the  common,  than  of  the  Roman  civil,  law. 
'Being  lawfully  assembled,'  says  Ayliffe,  'they  represent  but  one 
person,  and  may  consequently  make  contracts,  and,  by  their  col- 
lective assent,  oblige  themselves  thereunto.'  And,  though  all  the 
members  of  a  corporation  covenanted  on  behalf  of  it  under  their 
private  seals,"  this,  it  was  held,  would  only  bind  them  personally, 
and  not  the  corporation.  Ang.  &  A.  Corp.,  sec.  232,  which  is  sup- 
ported by  the  numerous  cases  there  cited.  Again,  in  the  same 
work  (sec.  504)  :  "The  separate  action,  individually,  without  con- 
sultation, although  a  majority  in  number  should  agree  upon  a  cer- 
tain act,  would  not  be  the  act  of  the  constituted  body  of  men 
clothed  with  the  corporate  powers."  Indeed,  the  authorities  on 
this  subject  are  numerous,  uncontradicted,  and  supported  by  rea- 
son. It  is  true  the  common  seal  is  prima  facie  evidence  that  a 
deed  or  contract  is  the  act  of  the  company,  and  that  the  seal  has 
been  affixed  by  authority,  though  it  is  competent  to  go  behind  the 
seal,  and  show  that  it  was  not  affixed  by  the  legally  exercised  au- 
thority of  the  company.  In  this  case  there  was  no  common  seal  of 
the  company  attached.  While  a  seal  is  not  essential  to  the  validity 
of  a  chattel  mortgage,  in  the  absence  of  the  company's  seal  there 
is  no  presumption  of  its  being  the  corporation's  act,  and  it  devolves 
upon  the  party  relying  upon  the  mortgage  to  show  that  the  agent 
or  officer  had  authority  to  execute  it.  The  plaintiff's  witness  testi- 
fies that  there  was  no  resolution  of  stockholders  or  directors  to 
authorize  the  mortgage,  and  no  record  to  that  effect  is  entered  on 
the  books  of  the  company  ;  that  he  went  around  privately  and  saw 
a  majority  of  the  stockholders,  and  they  authorized  him  to  execute 
the  mortgage ;  and  that  he  requested  the  president  and  two  direct- 
ors to  sign  it.  A  corporation  can  act  only  in  the  manner  authorized 
by  law.  If  by  the  meeting  of  stockholders  for  of  the  directors  if 
they  have  by  the  charter  the  right)  the  secretary  of  the  company 
had  been  authorized  to  execute  this  mortgage  or  mortgages  gener- 
ally, the  mortgage  might  have  been  valid ;  but,  as  we  have  seen,  no 
authority  can  be  derived  in  this  irregular  manner  by  an  officer 
going  around  privately  to  what  he  alleges  was  a  majority  of  the 
stockholders,  and  getting  their  consent.  There  is  nothing  to  show 
that  they  were  a  majority,  and  that  they  did  consent,  as  would  be 
the  case  if  a  meeting  were  regularly  held,  the  vote  taken,  and  a 
minute  entered  on  the  company's  records.  To  give  validity  to  such 
proceedings  would  put  it  in  the  power  of  one  man  to  wreck  any 
company,  and  would  lead  to  irremediable  evils  and  abuses.  The 
corporation  seal  not  being  attached,  it  was  incumbent  on  the  plain- 


CAPACITY  OF  PARTIES.  241 

tiff  to  look  to  the  authority  of  the  agent  with  whom  he  dealt. 
Since  it  was  not  in  the  scope  of  the  secretary's  authority,  as  such, 
to  execute  the  mortgage,  and  as  no  legal  authority  to  execute  the 
same  specially  was  given,  it  goes  for  naught.  The  receipt  and  use 
of  the  money  is  not  of  itself,  as  we  have  seen,  a  sufficient  ratifica- 
tion hy  the  corporation.  But  it  is  immaterial  here  whether  there 
was  a  subsequent  ratification  or  not.  Ratification  would  be  good 
between  the  corporation  and  the  mortgagee,  but  would  not  validate 
as  to  other  creditors,  a  mortgage  which  was  invalid  when  regis- 
tered. 

The  mortgage  is  not  good  at  common  law  for  want  of  authority 
to  the  secretary  to  execute  it,  nor  is  it  good  as  a  statutory  mort- 
gage, under  The  Code,  sec.  685,  for  there  is  no  common  seal  at- 
tached, as  required  by  that  section  ;  and  the  probate  shows  that,  as 
to  the  president  and  the  two  stockholders,  there  was  no  legal  proof 
of  its  execution  by  them.  They  neither  acknowledged  the  same, 
nor  was  it  proven  by  the  examination  of  the  subscribing  witness, 
indeed,  under  the  words  of  the  statute  {lb.,  sec.  685),  it  may  be 
more  than  one  witness  is  necessary,  as  required  by  The  Code,  sec. 
1246,  subd.  1.  In  Todd  v.  Outlaw,  79  N.  C,  237,  Bynum,  /., 
says :  "Until  a  deed  is  proved  in  the  manner  prescribed  by  the 
statute,  the  public  register  has  no  authority  to  put  it  on  his  book. 
The  probate  is  his  warrant,  and  his  only  warrant,  for  doing  so. 
Williams  v.  Griffin,  49  N.  C,  31  ;  Burnett  v.  Thompson,  48  N.  C, 
113;  Lambert  v.  Lambert,  33  N.  C,  162:  Carrier  v.  Hampton,  33 
N.  C,  307.  Not  having  been  duly  proved,  the  registration  was  in- 
effectual to  pass  the  title,  as  against  creditors  or  purchasers.  Rob- 
inson v.  Willoughby,  70  X.  C,  358 ;  Fleming  v.  Burgin,  37  N.  C, 
584;  DeCourcy  v.  Barr,  45  N.  C,  181."  To  same  effect  is  Evans 
v.  Etheridge,  99  N.  C,  43,  5  S.  E.  R.,  386.  Error. 

Where  all  the  stockholders  and  directors,  being-  the  same  persons, 
meet  and  agree  to  execute  a  mortgage,  and  the  mortgage  is  executed 
under  seal,  it  is  a  valid  execution;  the  seal  is  not  necessary  except  where 
it  would  be  required  for  a  natural  person.  Benbow  v.  Cook,  115 — 324; 
Wade  v.  New  Bern,  77 — 460.  A  deed  signed  by  a  proper  officer  in  the 
name  of  the  company,  with  the  seal  attached,  is  a  sufficient  execution  at 
common  law,  and  the  method  required  by  statute  is  only  additional. 
A  corporation  may  convey  by  deed,  sealed  with  the  common  seal  and 
signed  in  its  name  by  the  president  and  two  other  members  of  the 
corporation  and  attested  by  a  witness  or  witnesses;  or  by  deed  sealed 
with  the  common  seal,  signed  by  the  president  and  attested  by  the 
secretary.  Revisal,  1130.  Bason  v.  Mining  Co..  90 — 417:  Lewis  'v.  R. 
R.,  95—179;  Shaffer  v.  Hahn,  111—1;  Heath  v.  Cotton  Mills.  115—202; 
Clarke  v.  Hodge,  116—762;  Barcello  v.  Hapgood,  118— p.  730.  A  mort- 
gage executed  according  to  the  requirements  of  the  statute,  is  the  con- 
tract of  the  company  and  not  of  the  officers  signing  it.  Bank  v.  Mfg. 
Co.,  100—345.  A  company  is  bound  by  a  contract  made  by  its  manager 
or  superintendent  within  the  general  scope  of  the  corporate  business. 
Clowe  v.  Pine  Product  Co.,  114 — 304.  Corporations  other  than  railroads 
have  a  general   power  to  mortgage   their   property  unless   prohibited   by 


242  FORMATION    OF    CONTRACT. 

the  charter,  and  such  mortgage  executed  under  resolution  of  a  majority 
of  the  stockholders,  though  not  in  regular  meeting,  is  valid.  Paper  Co. 
v.  Chronicle,  115 — 143.  An  agent  with  general  power  to  manage  the 
business  can  not  make  a  contract  that  virtually  disposes  of  all  the 
property;  neither  can  such  contract  be  ratified  except  by  a  meeting  of 
stockholders  held  according  to  law.  Bank  v.  Lumber  Co.,  116 — 827. 
Where  the  president  of  a  bank  signed  blank  certificates,  and  they  were 
filled  out  by  the  cashier  and  used  for  his  own  benefit,  the  bank  is  bound. 
Havens  v.  Bank,  132 — 214.  A  contract  made  by  an  officer  not  previously 
authorized  may  become  the  contract  of  the  company  by  ratification. 
Greenleaf  v.  R.  R.,  91 — 33.  A  railroad  company  may  be  liable  on  con- 
tract for  the  services  of  special  policeman.  Porter  v.  R.  R.,  97 — 46.  A 
deed  signed  "C.  M.  Pres.  of  D.  Mfg.  Co.,"  and  sealed  with  his  seal,  and 
with  one  witness  attesting,  is  the  deed  of  the  person  and  not  that  of  the 
corporation.  Clayton  v.  Cagle,  97 — 300;  Caldwell  v.  Mfg.  Co.,  121 — 339. 
But  a  corporation  having  no  corporate  seal  may  use  as  its  seal  the 
individual  seals  of  its  officers.  Taylor  v.  Heggie,  83 — 244;  Edwards 
v.  Supply  Co.,  150—171,  173;  Withrell  v.  Murphy,  154—82;  Lockville 
Power  Co.  v.  Carolina  Power  Co.   (N.  C),  84  S.  E.,  398. 

4.     Ultra  vires  contracts. 

(97)  HUTCHINS  v.  BANK, 
128  N.  C,  72,  38  S.  E.,  252—1901. 

Clark,  J.  The  defendant  demurred  on  the  ground  that  "being 
a  National  Bank,  it  had  no  power  under  the  National  Banking 
Act  creating  it  to  guaranty  the  debt  sued  upon." 

The  Judge  sustained  the  demurrer  and  dismissed  the  action. 
The  plaintiff's  appeal  presents  only  the  correctness  of  that  ruling 
for  review. 

The  allegation  in  the  complaint,  which  is  admitted  by  the  de- 
murrer, is  that  the  defendant,  by  letter,  agreed  that  a  draft  drawn 
by  plaintiff,  not  to  exceed  $300,  upon  Chalkley  &  Co.,  for  hides  to 
be  shipped  them  by  plaintiff  should  be  paid,  and  that  in  considera- 
tion of  that  guarantee  the  plaintiff  shipped  the  hides  to  Chalkley 
&  Co.,  but  "defendant  failed  and  refused  to  pay  the  draft  as  it 
had  contracted  and  agreed  to  do,  and  the  same  was  protested  for 
nonpayment,"  etc. 

The  National  Banking  Act  contains  no  prohibition  against  such 
banks  guaranteeing  paper,  but  it  is  contended  that  the  terms  of  the 
statute  do  not  authorize  a  National  Bank  to  make  a  contract  of 
guarantee.  In  Peoples  Bank  v.  National  Bank,  101  U.  S.,  181, 
183,  it  is  said :  "A  guaranty  is  a  less  onerous  and  stringent  con- 
tract than  that  created  by  endorsement.  We  see  no  reason  to 
doubt  that,  under  the  circumstances  of  this  case,  it  was  competent 
for  the  defendant  to  give  the  guaranty  here  in  question.  It  is  to 
be  presumed  that  the  vice-president  had  rightfully  the  power  he 
assumed  to  exercise,  and  the  defendant  is  estopped  to  deny  it. 
Where  one  of  two  innocent  parties  must  suffer  by  the  wrongful 


CAPACITY  OF  PARTIES.  243 

act  of  a  third,  he  who  gave  the  power  to  do  the  wrong  must  bear 
the  burden  of  the  consequences." 

In  Railroad  v.  McCarthy,  96  U.  S.,  258,  267,  it  is  said,  "The 
doctrine  of  ultra  vires,  when  invoked  for  or  against  a  corporation, 
should  not  be  allowed  to  prevail  where  it  would  defeat  the  ends  of 
justice  or  work  a  legal  wrong,"  citing  several  cases.  And  in  Board 
of  Agriculture  v.  R.  R.,  47  Ind.,  407,  "Although  there  may  be  a 
defect  of  power  in  the  corporation  to  make  a  contract,  yet,  if  a 
contract  made  by  it  is  not  in  violation  of  its  charter,  or  of  any 
statute  prohibiting  it,  and  the  corporation  has,  by  its  promise,  in- 
duced a  party  relying  on  the  promise,  and  in  execution  of  the  con- 
tract, to  expend  money  and  perform  his  part  thereof,  the  corpora- 
tion is  liable  on  the  contract."  In  R.  R.  v.  Trans.  Co.,  83  Pa.  St., 
160,  "Where  a  corporation  has  entered  into  a  contract  which  has 
been  fully  executed  on  the  other  part  and  nothing  remains  for  it 
to  do  but  to  pay  the  consideration  promised,  it  will  not  be  allowed 
to  set  up  the  plea  of  ultra  vires/'  To  the  same  purport,  5  Thomp. 
Corp.,  sec.  6024,  and  cases  there  cited. 

"Even  if  a  contract  is  ultra  vires,  yet  if  it  is  not  illegal  the  de- 
fendant is  estopped  from  setting  up  that  defense,  as  it  would  be 
fraud  on  the  plaintiff  to  allow  this  to  be  done,  he  having  entered 
into  the  transaction  relying  upon  said  contract."  Bushnell  v.  Bank, 
17  N.  Y.,  378;  Whitney  Arms  Co.  v.  Barlow,  63  N.  Y.,  62; 
Waterman  Corp.,  604,  and  indeed  the  authorities  and  text-writers 
seem  fairly  uniform  to  this  purport.  The  case  strongly  relied  on 
to  the  contrary  is  Bowen  v.  Bank,  94  Fed.  Rep.,  925,  but  there  the 
learned  Judge  stresses  the  fact  that  in  that  case  the  plaintiff  (un- 
like the  present)  "had  notice  that  there  were  no  funds  in  the  bank 
to  meet  the  checks  and  that  he  knew  that  the  contract  was  one  of 
guaranty  pure  and  simple."  It  may  be  doubted  if  the  latter  case 
could  be  sustained  on  review,  but  it  is  very  different  from  this. 

Here  if  it  be  conceded  that  the  contract  was  ultra  vires  it  was 
not  expressly  prohibited  nor  illegal,  the  plaintiff  acted  on  it  and 
relying  on  it  he  parted  with  his  property  and  shipped  the  hides. 
The  defendant  is  estopped  on  both  reason  and  precedent  to  aver 
that  it  was  not  empowered  to  give  the  guaranty.  It  does  not  lie 
in  defendant's  mouth  to  say  that  it  had  no  authority  to  do  what 
it  did.  after  the  plaintiff  has  shipped  his  hides  relying  upon  the 
defendant's  promise  that  the  draft  should  be  paid. 

In  the  preface  of  4th  Ed.  of  Cook  on  Corporations,  it  is  well 
said :  "The  doctrine  of  ultra  vires  is  disappearing.  The  old  theory 
that  a  corporate  act  beyond  the  express  and  implicit  corporate 
powers  was  illegal  and  not  enforceable,  no  matter  whether  actual 
injury  had  been  done  or  not,  has  given  way  to  the  practical  view 
that  the  parties  to  a  contract  which  has  been  wholly  or  partially 


244  FORMATION    OF    CONTRACT. 

executed  will  not  be  allowed  to  say  it  was  ultra  vires  of  the  cor- 
poration." 

The  judgment  sustaining  the  demurrer  is  reversed. 

If  one  party  to  the  contract  has  performed  his  part,  the  other  can 
.not  plead  ultra  vires.  Trustees  v.  Realty  Co.,  134— -41.  If  a  company 
acquires  land  for  any  purpose  authorized  by  its  charter,  the  purchase 
and  sale  by  it  is  valid;  if  it  transcends  its  powers  in  the  charter,  the 
purchase  and  sale  are  still  valid  against  every  one  except  the  State. 
Mallett  v.  Simpson,  94 — 37.  While  a  mining  company  buying  "railroad 
supplies"  might  be  acting  ultra  vires,  it  may  be  liable  on  such  contract 
where  the  articles  were  purchased  and  used,  and  the  seller  had  no  notice 
that  they  were  not  to  be  used  for  the  regular  business  of  the  company. 
Luttrell  v.  Martin,'  112 — 593;  Herring  v.  Lumber  Co.,  159 — 382.  A  cor- 
poration not  regularly  organized,  entering  into  a  contract,  is  estopped 
to  deny  its  existence,  and  so  with  the  person  dealing  with  it  as  a  cor- 
poration. Ryan  v.  Martin,  91 — 464;  Perry  v.  Insurance  Co.,  139 — 374; 
but  see  Wright  v.  R.  R.,  50 — 304.  Where  a  foreign  insurance  company, 
not  having  taken  out  license,  deals  with  a  person  in  this  State,  it  can 
not  plead  such  failure  to  obtain  license  to  defeat  its  liability  on  the 
contract.  Fisher  v.  Insurance  Co.,  136 — p.  220;  but  the  person  so  deal- 
ing with  it  may  plead  such  defect  of  authority  against  his  liability. 
Insurance  Co.  v.  Edwards,  124 — 116;  Howard  v.  Ins.  Co.,  125 — 49.  See 
Revisal,   1194,  4763,  4806,  4807;   Ober  v.   Katzenstein,   160-439. 

For  ultra  vires  contracts  generally,  see  Womack  on  Corp.,  p.  73;  Clark 
en  Corp.,  p.  163;  29  Am.  &  Eng.  Encyc,  42  et  seq.;  Merchts.  Bank  v. 
Baird,  160  Fed.,  642,  17  L.  R.  A.  (N.  S.),  526;  Appleton  v.  Citizens 
Cent.  Nat.  Bank,  190  N.  Y.,  417,  83  N.  E.,  470,  32  L.  R.  A.  (N.  S.),  543. 

Joint-stock  associations,  not  incorporated,  are  only  partnerships,  and 
the  members  are  liable  as  partners.  Bain  v.  Loan  Association,  112 — 
248;  Haustein  v.  Johnson,  112 — 253;  Faison  v.  Stewart,  112 — 332;  Fer- 
tilizer Co.  v.  Clute,  112—440. 

Sec.  3.     Aliens. 

(98)   BLACKWELL  v.  WILLARD, 

65  N.  C,  555,  6  A.  R.,  749-1871. 

Dick,  J.  Every  material  allegation  in  the  complaint,  not  con- 
troverted by  the  answer,  shall  for  the  purposes  of  the  action,  be 
taken  as  true.     C.  C.  P.,  sec.  137. 

All  the  allegations  in  the  complaint  which  are  admitted  in  the 
answer,  are  considered  as  part  of  the  answer  in  determining  the 
matters  in  controversy. 

In  this  case  there  is  a  demurrer  to  the  answer,  and  we  have  to 
consider,  whether  the  facts  thus  admitted,  are  sufficient  to  deter- 
mine the  rights  of  the  parties. 

Certain  property  belonging  to  the  plaintiffs  was  sold  under  a 
decree  of  the  court  of  equity  for  Beaufort  County,  made  at  Spring 
Term,  1X60.  The  sale  was  made  by  John  A.  Stanly,  Clerk  and 
Master  of  said  court;  and  the  defendant,  William  II.  Willard,  be- 
came the  purchaser  of  part  of  said  property,  and  executed  the  four 
notes  with  the  sureties  as  set  fortb  in  the  pleadings.  The  sale  was 
made  on  the  8th  day  of   November,  1860,  and  the  notes  were  pay- 


CAPACITY    OF    PARTI  ES.  245 

able  at  6,  12,  18,  and  24  months  from  that  date.  The  sale  was 
duly  confirmed  by  said  court  of  equity,  and  the  Master  was  di- 
rected to  collect  the  purchase-money,  when  due,  and  hold  the  same 
subject  to  the  order  of  the  court. 

At  the  Fall  Term,  1861,  the  following  order  was  made:  "In 
this  cause,  it  is  ordered  by  the  court,  that  the  Master  suspend  the 
collection  of  the  purchase-money,  as  long  as  in  his  opinion  the 
same  continues  solvent,  with  authority  to  receive  payment  of  such 
bonds  as  the  makers  thereof  may  desire  to  pay." 

The  first  note  was  paid  by  the  defendant,  Willard,  to  John  A. 
Stanly,  Clerk  and  Master,  on  the  2d  day  of  January,  1862,  by  a 
check  on  the  Bank  of  Cape  Fear;  and  the  other  notes  were  paid 
at  subsequent  periods  in  that  year,  in  currency,  which  had  not 
materially  depreciated. 

It  is  also  admitted  that  said  payments  were  made  in  good  faith, 
and  without  any  intention  to  defraud  the  plaintiffs. 

The  plaintiffs  at  the  time  of  the  sale  of  said  property,  and  the 
collection  of  said  notes,  were  citizens  and  residents  of  the  State  of 
New  York  ;  and  said  payments  were  received  by  the  Clerk  and 
Master,  without  their  consent.  The  said  suit  in  equity  was  pend- 
ing at  the  commencement  of  the  late  war;  and  the  plaintiffs,  as 
citizens  of  the  United  States,  were  alien  enemies,  in  the  contempla- 
tion of  the  laws  of  the  Confederate  States. 

One  of  the  important  consequences  of  a  state  of  war  is  the  abso- 
lute interruption  of  all  commercial  intercourse  and  dealing  be- 
tween the  subjects  of  the  two  countries.  A  nonintercourse  act 
was  passed  by  Congress,  on  the  13th  day  of  July,  1861  (12  U.  S. 
Stat,  at  Large,  257),  interdicting  all  commercial  intercourse  be- 
tween citizens  of  the  United  States  and  citizens  of  the  insurrec- 
tionary States. 

The  plaintiffs  could  not  have  commenced  or  prosecuted  a  suit 
in  our  courts,  as  then  constituted,  for  their  alienage  could  have 
been  pleaded  successfully  in  abatement  of  the  action.  1  Saunders 
PI.,  86.  Contracts  existing  prior  to  the  war  were  not  extin- 
guished ;  but  the  remedy  only  was  suspended ;  and  this  from  the 
inability  of  a  citizen  of  the  United  States  to  sue  in  the  courts  of 
an  insurrectionary  State,  or  to  sustain  a  persona  standi  in  judicio. 
4  Bouv.  Inst.,  291. 

The  plaintiff's  said  suit  in  equity  was  pending  at  the  commence- 
ment of  the  war;  and  thereupon  their  rights  of  action  to  collect  or 
secure  their  debts  became  suspended.  As  they  could  not  assert 
their  rights  in  the  court,  they  ought  not  to  be  prejudiced  by  the 
acts  of  adverse  parties,  or  the  officers  of  the  court.  The  suit  might 
have  been  abated,  upon  the  plea  of  alienage  put  in  by  the  defend- 
ants;  but  their  rights  of  property  and  the  right  of  action  would 


246  FORMATION    OF    CONTRACT. 

not  thereby  have  been  extinguished  and  defeated.  Among  the 
civilized  nations  of  the  present  day,  the  principle  is  well  estab- 
lished, and  generally  observed,  that  war  ought  not  to  interfere  with 
the  property  of  the  private  citizen  of  an  enemy's  country,  unless 
upon  urgent  necessity;  and  they  ought  not  to  be  deprived  of  any 
securities  which  they  hold  for  their  debts,  which  might  be  avail- 
able upon  a  return  of  peace.  Public  policy  requires  nonintercourse 
laws  to  be  enacted  and  strictly  observed ;  but  laws  confiscating  the 
property  of  the  private  citizens  of  an  enemy's  country  are  justly 
odious.  These  humane  and  enlightened  principles  are  fully  recog- 
nized by  the  courts  of  this  country  and  founded  upon  the  common 
law,  and  the  modern  laws  of  nations.     1  Kent,  63. 

The  relations  between  the  plaintiffs  and  their  counsel,  in  said 
suit  in  equity,  were  terminated  by  the  war ;  and  the  steps  after- 
wards taken  in  the  cause  did  not  affect  them.  They  had  a  good 
claim  against  the  defendants  before  the  war  began ;  their  remedy 
was  only  suspended,  and  was  revived  upon  the  return  of  peace. 
Bx  parte  Brass  Maker,  14  Vesey,  71 ;  Bell  v.  Chapman,  10  John- 
son, 183;  Bradwell  v.  Weeks,  13  Johnson,  1. 

We  are  of  opinion  that  the  order  made  in  the  court  of  equity, 
for  Beaufort  County,  at  Fall  Term,  1861,  and  the  payment  re- 
ceived by  the  Clerk  and  Master  during  the  war,  from  the  defend- 
ant, Willard,  constitute  no  bar  to  the  claims  of  the  plaintiffs  in 
the  present  action. 

There  is  no  error  in  the  ruling  of  His  Honor;  the  demurrer  is 
sustained,  and  the  judgment  in  the  court  below  is  affirmed. 

Per  Curiam.  Judgment  affirmed. 

Debts  contracted  with  an  alien  are  not  extinguished  by  war.  Hamilton 
v.  Eaton,  1 — 84,  discussing  the  English  treaty.  The  statute  of  limitations 
is  suspended  during  war.     Clark's   Code,   sec.   165 ;   Revisal,  379. 

Alien  enemy. — Payment  of  a  note  for  money  due  to  an  alien  enemy, 
made  to  a  Confederate  receiver,  does  not  cancel  the  debt.  Justice  v. 
Hamilton,  67 — 111;  Wood  v.  Branch,  62 — 71;  but  a  judgment  in  favor  of  a 
resident  agent  of  such  alien,  satisfied  by  execution,  is  a  bar  to  further 
action.  Elliott  v.  Higgins,  83 — 459.  No  one  can  appoint  an  agent  in  a 
foreign  country  during  war,  and  war  revokes  the  agency  between  citizens 
of  the  two  countries,  except  as  to  preexisting  contracts.  2  Page  Cont., 
sec.  962;  Hubbard  v.  Matthews,  13  Am.  Rep.,  562;  U.  S.  v.  Grossmeyer,  9 
Wall.  (U.  S.),  72.  Mut.  Ben.  L.  Ins.  Co.  v.  Hillyard,  37  N.  J.  L.,  444,  18 
A.  R.,  741 ;  an  alien  enemv  can  not  sue,  but  mav  be  sued.  McVeigh  v.  U. 
S.,  11  Wall,  27;  6  R.  C.  L.,  714. 

Alien  friend. — Under  the  old  law  an  alien  could  take  a  legacy  of  per- 
sonalty but  not  a  devise  of  realty.  Atkins  v.  Kron,  37 — 58.  An  alien 
friend  could  not  take  by  descent.  Paul  v.  Ward,  15—247;  Harman  v.  Fer- 
rall,  64 — 474.  An  alien  had  capacity  to  take  land  by  purchase,  and  his 
title  was  good  until  divested  by  the  State.  University  v.  Miller,  14 — 188; 
Rauche  v.  Williamson,  25 — 141.  Revisal,  sec.  182,  gives  the  right  to  an 
alien  to  take  land  by  descent  or  purchase  and  make  contracts  in  regard 
to  the  same.     See  also  Mordecai's  Lectures,  p.  597  ct  seq. 

Convicts. — The  doctrine  of  civiliter  mortuus  does  not  exist  in  our  law. 
and   a  person   convicted   and    in   prison   may   contract   and   he   sued;   and   he 


CAPACITY     OF     PARTIES.  247 

may  also  sue  except  so  far  as  this  right  like  others  may  be  interfered  with 
by  his  imprisonment.  White  v.  Underwood,  125—25;  9  Cyc,  873  etseq. 
The  statute  of  limitations  is  suspended  during  imprisonment.  Clark  s  Code, 
sec  148  (3).  Dade  Coal  Co.  v.  Haslett,  83  Ga.,  549,  10  S.  E.,  436;  Byers 
v.  Sun  Sav.  Bank  (Okla.).  139  Pac,  948,  52  L.  R.  A.   (N.  S.),  320. 

Attorneys  and  physicians.— While  these  were  formerly  considered  as 
exercising  their  professional  skill  for  the  honor  in  it,  they  have  acted  in 
this  country  generally  upon  the  idea  that  "the  laborer  is  worthy  of  his 
hire,"  and  they  may  sue  for  compensation  for  their  services.  Simmons 
v  Davenport,  140—407,  was  a  suit  for  attorneys'  fees.  In  Allison  v.  R.  R., 
129— p  344;  Furches,  C.  J.,  says:  "The  law  of  this  State,  adopting  the  law 
of  England  as  far  back  as  11  Hen.  VII.,  did  not  allow  an  attorney  'to 
take  any  fee  or  reward'  for  his  services  in  pauper  suits.  Rev.  Stat.,  chap. 
31,  sec.  153.  Rev.  Code,  chap.  31,  sec.  43,  which  continued  to  be  the  law 
until  the  adoption  of  The  Code,  as  it  was  regarded  as  a  species  of  cham- 
pertv  But  that  is  not  the  law  now."  And  an  attorney  may  make  a  con- 
tract for  a  contingent  fee.  Rev.  Code,  chap.  9,  sec.  7,  no  attorney  could 
take  any  greater  tax  fees  in  civil  cases  than  thqse  allowed  by  law,  and 
these  "tax  fees"  (Rev.  Code,  chap.  102,  sec.  16,)  were  taxed  as  a  part  of 
the  costs  against  the  losing  party. 

Sec.  4.    Infants. 

1.  Void  contracts. 
(99)  SAWYER  v.  NORTHAN, 

112  N.  C,  261,  16   S.   E.,   1023—1893. 

This  was  a  civil  action  for  the  recovery  of  land.  O.  C.  Farrar 
executed  a  deed  to  Thomas  F.  Credle,  Jr.,  at  the  instance  of 
Thomas  F.  Credle,  Sr.,  the  former  being  a  minor;  Thomas  F. 
Credle,  Sr.,  executed  a  mortgage  on  the  land  and  gave  notes  for 
the  purchase-money  in  his  own  name.  Thomas  F.  Credle,  Jr.,  died 
during  infancy,  and  the  plaintiff  claims  under  deeds  from  his  heirs, 
with  notice  of  the  facts.  The  defendant  claims  under  a  deed  from 
Farrar  and  wife,  reciting  a  sale  under  the  mortgage  above  men- 
tioned. The  court  adjudged  that  the  plaintiff  was  entitled  to  re- 
cover the  land  upon  the  payment  of  the  purchase-money  which  had 
been  paid  by  the  defendant.  From  this  judgment  both  parties 
appealed. 

Clark,  J.  The  transaction  most  favorable  to  the  plaintiff,  and 
leaving  out  of  view  all  circumstances  tending  to  prove  fraud,  is 
that  Thomas  F.  Credle,  intending  to  act  as  agent  for  his  son, 
Thomas  F.  Credle,  Jr.,  bought  the  land  of  O.  C.  Farrar  with  an 
agreement  to  mortgage  the  same  for  the  purchase-money ;  that  his 
son  was  a  minor,  twelve  years  of  age,  and  hence  incapable  of  ap- 
pointing an  agent ;  that  the  minority  of  the  son  was  not  made 
known  to  Farrar,  who  supposed,  indeed,  that  he  was  conveying  to 
Thomas  F.  Credle,  from  whom  he  had  originally  bought  the  land ; 
that  said  Thomas  F.  Credle,  after  receiving  the  deed  to  which  he 
caused   the   abbreviation    "Jr."   to   be   written    after   the   name   of 


248  FORMATION    OF    CONTRACT. 

Thomas  F.  Credle,  as  the  grantee  named  therein,  did  execute  a 
mortgage  on  the  land  covered  by  the  deed  and  mortgage  notes  for 
the  full  amount  of  the  purchase-money,  all  of  which  he  signed  in 
his   own  name. 

The  jury  find  that  the  purchase  and  the  mortgage  back  were 
contemporaneous  acts  and,  of  course,  parts  of  the  same  transac- 
tion. The  mortgage  could  have  no  validity  because  executed  by 
one  to  whom  the  land  had  not  been  conveyed.  But  the  deed  was 
equally  invalid  and  conveyed  no  title  because  it  was  merely  a  part 
of  a  transaction,  which  whole  transaction  was  of  no  effect  since 
Thomas  F.  Credle  (assuming  his  good  faith)  had  no  authority, 
and  could  have  none,  to  enter  into  such  contract  as  agent  for  a 
minor. 

It  is  true  land  can  be  conveyed  to  a  minor,  but  when  an  alleged 
contract  of  purchase  is  made  by  a  minor  (whose  infancy  is  undis- 
closed) under  an  agreement  to  mortgage  the  land  back  to  secure 
the  purchase-money,  the  whole  transaction  is  a  nullity  since  he  can 
not  execute  the  mortgage  and  there  is  no  contract.  One  attempt- 
ing to  act  as  agent  for  him  is  in  no  better  condition,  for  the  minor 
could  neither  appoint  an  agent  nor  empower  him  to  make  a  mort- 
gage which  he  could  not  make  himself.  The  conveyance  is  also  a 
nullity,  because  the  conveyance  back  by  the  grantee  by  way  of 
mortgage  which  was  a  part  of  the  contract,  and  the  basis  upon 
which  it  was  made,  was  never  executed.  If  the  deed  bv  Farrar 
had  conveyed  any  title,  there  being  a  failure  by  the  grantee  to  give 
a  valid  mortgage  as  agreed,  Farrar  retained  the  equitable  title,  or 
real  title,  since  he  could  call  for  a  conveyance. 

In  Bunting  v.  Jones,  78  N.  C,  242,  where  there  was  a  convey- 
ance of  land  and  a  contemporaneous  agreement  for  a  mortgage 
back  to  secure  the  purchase-money,  but  the  purchaser's  wife  re- 
fused to  join  in  the  mortgage,  it  was  held  that  no  title  vested  in 
the  grantee,  and  his  wife  acquired  no  dower  or  homestead  rights. 
In  this  case,  as  in  that,  it  might  well  be  said,  "It  was  not  intended 
to  give  the  land  to  the  party,  and  he  has  not  given  anything  for 
it."  That  case  has  been  cited  and  approved  in  Moring  v.  Dicker- 
son,  85  N.  C,  466,  and  Burns  v.  McGregor,  90  N.  C,  222. 

If  here  a  valid  mortgage  back  had  been  executed,  the  subsequent 
sale  thereunder  and  the  conveyance  to  the  purchaser  would  have 
divested  all  rights  of  the  plaintiff,  who  claims  under  the  minor. 
As  the  mortgage  was  not  executed  as  agreed,  the  contract  was  not 
carried  out,  what  purports  to  be  a  deed  to  the  minor  conveyed  no 
title,  and  the  whole  transaction  was  a  nullity  ab  initio.  No  ques- 
tion of  the  rights  of  third  parties  can  arise,  as  the  plaintiff  and  all 
under  whom  he  claims  are  fixed  with  knowledge  of  the  facts.  Cer- 
tainly as  between  the  parties,  the  title  was  not  divested  from  O.  C. 


CAPACITY  OF  PARTIES.  249 

Farrar  by  such  attempted  conveyance ;  and  if  the  subsequent  con- 
veyance from  Farrar  to  the  defendant  has  validity,  it  is  because 
the  title  still  remained  in  him,  and  not  because  he  attempted  to 
convey  as  mortgagee  under  a  power  of  sale  in  an  invalid  mortgage. 
The  court  should  simply  have  given  judgment  against  the  plain- 
tiff and  in  favor  of  the  defendant  for  the  land  and  for  costs.  This 
disposes  of  both  appeals.  The  defendant  will  recover  costs  in 
both  appeals  in  this  court.  Error. 

In  accord  with  the  principal  case.  Trueblood  v.  Trueblood,  18  Ind.,  195. 
65  A.  D.,  756;  Burns  v.  Smith,  29  Ind.  App..  181.  64  X.  E.,  94,  94  A.  S. 
R.,  268;  held  voidable  only,  in  Patterson  v.  Lippincott,  47  X.  J.  L.,  457,  54 
A.  R.,  178.  By  the  weight  of  authority  void  contracts  of  infants  seem  to 
be  limited  to  powers  of  attorney,  appointment  of  agents,  and  arbitration 
agreements.  2  Page  Cont..  sees.  858-860;  Clark  Cont.,  154;  but  as  to  con- 
tract by  agent  see  Smith  v.  Kron,  96 — p.  397.  In  Millsaps  v.  Estis,  134 
— p.  491,  it  was  held  that  an  infant  can  not  consent  to  a  submission  of  his 
cause  to  arbitration,  and  any  attempt  to  do  so  for  him  is  absolutely  void, 
but  on  a  rehearing  of  the  case  in  137 — 535.  it  was  held  to  be  voidable 
only.  According  to  the  modern  rule,  all  contracts  of  infants  are  voidable, 
except  powers  of  attorney.  16  Am.  &  Eng.  Encyc,  272.  While  an  infant 
can  not  appoint  an  agent,  he  may  act  as  agent  or  deputy  in  a  ministerial 
office  "unless  very  deficient  in  mental  capacity."  R.  R.  v.  Fisher,  109 — 1. 
The  tendencv  is  to  hold  all  contracts  of  infants  voidable.  Craig  v.  Van 
Bebber,  100  Mo.,  584,  18  A.  S.  R,  and  note ;  22  Cyc,  580. 

Disability. — -For  the  purpose  of  contract  generally,  the  disability  of  in- 
fancy extends  to  the  age  of  twentv-one ;  but  the  infant  is  of  age  on  the 
day 'before  his  birthday.  (1  Blk.,  463;  16  L.  R.  A.,  542.)  Our  law  does 
not  authorize  a  court  to  remove  the  disability  of  infancy.  (Clark  Cont.. 
152.)  Emancipation  or  marriage  does  not  remove  the  disability  to  contract, 
though  it  may  affect  his  right  to  his  earnings  and  his  liability  for  neces- 
saries. 2  Page  Cont.,  sec.  852;  7  L.  R.  A.,  176.  As  to  when  one  becomes 
of  age,  see  Jackson  v.   Beard,   162 — 105,   113;  22  Cyc,  511. 

Common  law  rule. — 1.  If  the  court  could  see  that  it  was  prejudicial  to 
the  infant,  the  contract  was  void.  2.  If  beneficial,  it  was  valid.  3.  If 
doubtful,  it  was  voidable.  2  Page  Cont.,  sec.  855 :  16  Am.  &  Eng.  Encyc, 
271.  Present  rule. — Certain  contracts  are  valid,  as  (1)  for  necessaries; 
(2)  those  authorized  or  required  by  law,  as  in  bond  for  appearance,  bond 
in  bastardy  proceeding,  enlistment  in  the  army,  apprenticeship  (Revisal, 
chap.  4),  infant  trustee.  Revisal,  1036.  In  Satterfield  v.  Reddick,  43 — 
p.  271,  and  Freeman  v.  Cook,  41 — p.  378,  it  is  said  that  a  marriage  settle- 
ment of  her  property  made  by  an  infant  female  was  binding,  because  to 
her  advantage.  In  Musgrove  v.  Kornegay,  52 — p.  75,  it  is  said  that  a  deed 
executed  by  a  child  too  young  to  be  capable  of  understanding  the  nature 
of  the  contract  is  void ;  but  if  he  has  mental  capacity,  it  is  voidable.  This 
seems  to  be  the  proper  distinction.  Mord.  Lect.,  412.  Fonda  v.  Van 
Home,  15  Wend.,  631,  30  A.  D.,  77;  Warwick  v.  Bruce,  6  Taunt.,  118.  6  E. 
R.  C,  43 ;  Infants,  Cent.  Dig.,  sec.  5 ;  Dec.  Dig.,  sec.  5.  "An  infant  is  not 
absolutely  incapable  of  binding  himself  by  contract,  but  is  generally  in- 
capable  of   absolutely   binding   himself."      Pollock   Cont.,   59. 


250  FORMATION    OF    CONTRACT. 

2.  Liability  for  necessaries. 

(100)  JORDAN  v.  COFFIELD, 

70   N.   C,   110—1874. 

Settle,  J.  The  plaintiff,  who  is  a  merchant,  furnished  to  the 
feme  defendant  certain  articles  just  previous  to  her  marriage,  con- 
sisting of  a  chamber  set  and  other  articles  constituting  her  bridal 
outfit,  amounting  in  all  to  the  value  of  $104.  It  is  conceded  that 
the  chamber  set  is  still  in  the  possession  and  use  of  the  defendant. 
To  the  plea  of  infancy  the  plaintiff  replies,  necessaries.  His 
Honor  charged  that  if  the  jury  believed  the  articles  furnished 
were  actually  necessary  and  of  a  reasonable  price,  the  plaintiff 
was  entitled  to  recover.  .  .  .  We  see  no  objection  to  this  charge. 

In  Smith  v.  Young,  19  N.  C,  26,  Daniel,  Judge,  states  the  rule 
governing  such  cases  with  great  clearness.  He  says :  "The  ques- 
tion whether  necessaries  or  not  is  a  mixed  question  of  law  and 
fact,  and  as  such  should  be  submitted  by  the  Judge  to  the  jury, 
together  with  his  directions  upon  the  law.  Whether  articles  fur- 
nished to  an  infant  are  of  the  classes  for  which  he  is  liable  is  a 
matter  of  law;  whether  they  are  actually  necessary  and  of  reason- 
able price  is  matter  of  fact  for  the  jury."  In  addition  to  the  au- 
thorities cited  by  the  learned  Judge  in  support  of  this  proposition, 
we  should  add  the  recent  case  of  Ryder  v.  Wombwell,  decided  in 
the  Court  of  Exchequer  and  reported  in  Law  Reports,  1868-69, 
page  31. 

His  Honor  is  to  be  understood  as  holding  the  articles  furnished 
to  be  of  the  class  for  which  the  defendant  would  be  liable,  and 
it  appears  from  the  record  that  there  was  evidence,  which  was 
well  left  to  the  jury  and  from  which  they  might  have  properly 
found  that  the  articles  were  necessary  to  one  in  the  degree  and 
condition  of  the  defendant,  and  that  they  were  of  reasonable  price. 
There  is  an  exception  to  the  general  rule  that  an  infant  is  incapa- 
ble of  binding  himself  by  a  contract  made,  not  in  favor  of  trades- 
men, but  for  the  benefit  of  the  infant  himself,  in  order  that  he 
may  obtain  necessaries  on  credit.  As  is  well  said  in  Hyman  v. 
Cain,  48  N.  C,  111,  "Infants  had  better  be  held  liable  to  pay  for 
necessary  food,  clothing,  etc.,  than  for  want  of  credit,  to  be  left 
to  starve."  Nor  are  we  to  understand  by  the  word  necessaries 
only  such  articles  as  are  absolutely  necessary  to  support  life,  but 
it  includes  also  such  articles  as  are  suitable  to  the  state,  station 
and  degree  of  life  of  the  person  to  whom  they  are  furnished. 
Peters  v.  Flemming,  6  M.  &  W.,  46. 

Although  the  point  is  not  distinctly  made  upon  the  record,  yet  it 
would  seem  that  the  defendant  relies  somewhat  upon  the  idea  that 


CAPACITY  OF  PARTIES.  251 

her  mother  was  bound  to  support  her,  notwithstanding  the  fact 
that  she  had  some  estate  of  her  own.  The  obligation  of  the  mother 
is  not  the  same  as  that  of  the  father  to  support  infant  children, 
and  the  weight  of  authority,  both  in  this  country  and  in  England, 
is  against  the  liability  of  the  mother  to  this  burden,  except  under 
peculiar  circumstances.     1   Parsons  Cont.,  308. 

Judgment  affirmed. 

(101)  FREEMAN  v.  BRIDGER, 
49  N.  C,  1,  67  A.  D.,  258—1856. 

Action  of  assumpsit,  in  which  defendant  pleaded  "general  issue 
and  infancy;"  the  plaintiff  replied  that  the  articles  furnished  were 
necessaries. 

The  action  was  brought  for  the  price  of  timber  furnished  to  the 
defendant  to  build  a  house,  and  for  other  articles.  The  defendant 
was  an  infant  at  the  time  the  articles  were  furnished,  and  lived 
with  his  mother.  He  had  at  that  time  a  guardian,  who  took  no 
control  over  him  or  his  property.  Before  the  articles  were  fur- 
nished the  defendant  had  married,  and  the  house,  for  which  the 
timber  was  furnished,  was  for  the  residence  of  himself  and  family, 
and  he  was  living  in  it  at  the  time  of  the  trial.  Of  the  amount 
claimed  $14  was  for  necessaries  suitable  to  his  condition,  and  the 
amount  for  the  timber  was  $55.  The  defendant  had  no  other 
house  and  this  one  was  suitable  to  his  condition.  There  was  a 
verdict  and  judgment  for  the  plaintiff,  and  defendant  appealed. 

Pearson,  J.  An  infant  is  presumed  not  to  have  sufficient  dis- 
cretion to  enable  him  to  transact  business  and  make  contracts.  So, 
the  general  rule  is,  that  the  contract  of  an  infant  is  not  binding  on 
him.  The  exception  is,  that  an  infant  is  bound  to  pay  for  goods 
sold  and  delivered  to  him,  provided  they  are  necessary  for  his  sup- 
port. This  is  put  on  the  ground  that  unless  an  infant  can  get 
credit  for  necessaries  "he  may  starve ;"  or  as  it  is  expressed  in 
some  of  the  cases,  "an  infant  must  live,  as  well  as  a  man,  there- 
fore, the  law  gives  a  reasonable  price  to  those  who  furnish  him 
with  necessaries  ad  victum  et  vestitum,  i.  c,  for  victuals  and 
clothes."  Lord  Coke  says,  Co.  Lit.,  172a,  "It  is  agreed  by  all  the 
books  that  an  infant  may  bind  himself  to  pay  for  his  necessary 
meat,  drink,  apparel,  physic  and  such  other  necessaries."  These 
last  words  embrace  boarding;  for  shelter  is  as  necessary  as  food 
and  clothing.  They  have  also  been  extended  so  as  to  embrace 
schooling  and  nursing  (as  well  as  physic)  while  sick.  In  regard 
to  the  quality  of  the  clothes  and  the  kind  of  food,  etc.,  a  restric- 
tion is  added,  that  it  must  appear  that  the  articles  were  suitable  to 
the  infant's  degree  and  estate. 


252  FORMATION    OF    CONTRACT. 

This  is  familiar  learning,  but  in  making  the  application  it  is 
proper  to  bear  in  mind  the  principle  upon  which  the  exception  is 
made.  His  Honor  was  of  opinion  that  a  contract  for  fifty-five 
dollars  worth  of  timber,  for  the  purpose  of  building  a  house,  made 
by  the  defendant  while  an  infant  living  with  his  mother,  fell  within 
the  exception,  inasmuch  as  the  timber  was  used  for  building  a 
house  on  the  infant's  land  "suitable  to  his  estate  and  station  in 
society,"  and  "such  as  are  usually  occupied  by  prudent,  economical 
young  men  just  setting  out  in  life  with  estates  like  the  defend- 
ant's ;"  it  also  appearing  that  he  had  married,  and  was  living  in 
the  house  with  his  wife  and  child  at  the  time  of  the  trial. 

We  agree  that  if  an  infant  marries,  the  principle  of  the  excep- 
tion extends  to  his  wife  and  child.  They  are  to  be  furnished  with 
necessary  food  and  clothing;  for  there  is  no  more  reason  why  they 
should  "starve"  than  the  infant  himself ;  but  in  regard  to  the  tim- 
ber, and  the  necessity  for  building  a  house,  we  differ  with  His 
Honor. 

The  plaintiff's  counsel  was  unable  to  cite  any  authority,  or  even 
a  dictum,  in  support  of  His  Honor's  opinion,  and  it  is  manifestly 
against  the  reason  of  the  thing.  If  the  infant  is  bound  to  pay  for 
the  timber,  he  must  pay  for  nails,  glass,  etc.,  and  the  wages  of  the 
workmen;  in  other  words,  for  the  whole  house;  and  if  this  be  so, 
on  the  ground  that  it  is  necessary  for  him  to  have  a  house  to  live 
in,  it  follows  that  he  must  pay  for  a  horse,  a  wagon,  a  plough, 
etc. ;  because  such  things  are  necessary  to  enable  him  to  cultivate 
his  land  ;  then  would  follow  a  few  cattle  and  hogs ;  so,  the  result 
would  be  to  make  the  exception  broader  than  the  general  rule, 
and  take  from  infants  that  protection  which  the  law  considers  they 
stand  in  need  of,  by  reason  of  their  want  of  discretion. 

There  is  another  fact  set  forth  in  the  case  which  makes  the  de- 
cision erroneous,  not  only  in  respect  to  the  timber,  but  in  respect 
to  the  fourteen  dollars  worth  of  articles  admitted  to  be  neces- 
saries, if  the  defendant's  counsel  had  insisted  upon  the  objection 
as  to  them :  The  defendant,  at  the  time  the  articles  were  con- 
tracted for,  had  a  guardian. 

While  an  infant  lives  with  a  parent,  he  can  not  bind  himself 
even  for  necessaries,  unless  it  be  proved  that  the  parent  was  un- 
able or  unwilling  to  furnish  the  child  with  such  clothes,  etc.,  as 
the  parent  considers  necessary,  "for  no  man  shall  take  upon  himself 
to  dictate  to  a  parent  what  clothing  the  child  shall  wear,  and  what 
time  they  shall  be  purchased,  or  of  whom."  Bainbridge  v.  Picker- 
ing, 2  Blackstone's  Rep.,  325. 

"Guardians  for  infants  are  presumed  to  furnish  all  necessaries, 
and  a  stranger  who  furnishes  board,  or  anything  else,  must,  except 
under  peculiar  circumstances,  take  care  to  contract  with  the  guar- 


CAPACITY     OF     PARTIES.  253 

dian."     State  v.  Cook,  34  N.  C,  67;  Hussey  v.  Rountree,  44  N.  C 
110;   Hyman  v.   Cain,   48   N.   C,   111;  Richardson   v.    Strong,   35 
N.  C,  106;  Downey  v.  Bullock,  42  N.  C,  102.     These  cases  settle 
the  rule,  that  where  there  is  a  guardian,  the  replication  "for  neces- 
saries" does  not  avoid  the  plea  of  "infancy;"  because  the  fact  of 
there  being  a  guardian,  whose  duty  it  is  to  furnish  all  necessaries 
for  the  support  of  the  ward,  shows  that  it  was  not  necessary   for 
the  infant  to  contract.     To  allow  him  to  do  so  would  defeat  the 
provision  which   forbids  guardians  to  exceed  the  income  of  their 
wards,  and,  in  fact,  would  put  the  ward  beyond  the  control  of  his 
guardian.     It  is  stated  in  this  case  that  the  guardian  assumed  no 
control  over  the  defendant.     That  does  not  prove  that  it  was  not 
his  duty  to  do  so.     But  if  an  infant  may  contract  for  timber,  build 
houses,  and  stock  his   farm  with  horses,  cattle,   etc.,  it  is   idle  to 
talk  about  the  control  of  his  guardian.     The  fate  of  this  defendant 
(for   we    see    from   the   record   that    this    action   was    commenced 
against  him  by  attachment,  as  an  absconding  debtor),  proves  the 
wisdom  of  the  law  and  the  need  infants  have  of  its  protection. 
Per  Curiam.  Venire  de  novo. 

As  to  what  are  necessaries,  and  the  province  of  the  judge  and  jury  see 
Mauldin  v.  So.,  etc.,  Univ.,  126  Ga.,  681,  55  S  E  922  8  Ann.  Cas  131, 
and  Nash  v.  Inman,  2  K.  B.,  1,  14  Ann.  Cas.,  682.  Where  an  intant  had 
no  property  except  his  interest  in  an  estate  which  appears  to  have  been 
insolvent,  money  loaned  to  him  by  the  administrator,  to  enable  him  to 
acquire  a  professional  education,  can  not  be  recovered  as  for  necessaries. 
Turner  v  Gaither,  83—357.  Supplies  furnished  to  an  infant  in  the  busi- 
ness of  farming  do  not  come  under  the  head  of  necessaries.  State  v. 
Howard,   88—650;   Grissom   v.    Beidleman,    129   Pac,   853,   44  L.   R.    A.    (-V 

S.),  411.  ,.  .,     , 

If  the  infant  is  living  with  the  father,  he  is  not  liable  for  necessaries 
if  not  living  with  the  father,  but  working  for  himself,  he  is  liable,  bmitn 
v  Young,  19—26;  Hyman  v.  Cain,  48—111;  because  it  is  the  rue  ot  law 
that  the  father  shall  support  his  children,  if  he  is  able,  and  if  he  is  not 
able  he  should  apply  to  the  court  for  the  use  of  their  property.  W  after 
v  Crowder.  37-p.  487;  Haglar  v.  McCombs,  66-p.  351;  Mull  v.  Walker, 
100—46  A  stepfather  is  not  bound  to  support  the  wife  s  children  by  a 
former  marriage;  but  a  stepfather  having  been  appointed  guardian,  can 
not  charge  his  ward  for  support  before  his  appointment;  such  child  mav 
become  liable  for  such  support  by  a  promise  after  coming  of  age,  Barnes 
v  Ward  45—93;  see  also  44—110  and  100—46.  A  guardian  is  presumed 
to    furnish    all    necessaries.      State    v.    Cook,    34—67;    Hussey   v.    Rountree, 

44 HO      So  a  physician  called  to  attend  the   slave  of   a  ward,   must   look 

to  the  guardian  for  pay.  Fessenden  v.  Jones,  52-14.  But  a  guardian 
who  is  a  merchant  mav  furnish  his  ward  necessaries  at  a  reasonable 
profit.  Moore  v.  Shields,"  69-50.  See  also  as  to  liability  for  necessaries, 
5  L  R  \  176;  12  L.  R.  A.,  859;  60  L.  R.  A.,  128;  16  Am.  &  Eng.  Encyc, 
275-281.  and  notes;  2  Page  Cont,  sec.  865;  Clark  Cont.  155;  1  Parsons 
Cont  296-  22  Cyc,  590;  Mordecai's  Lectures,  414.  The  liability  is  quasi 
contractual,  and  applies  only  to  the  reasonable  value  and  not  to  the  con- 
tract price,   Hyman   v.   Cain,  48—111;    1    Parsons   Cont.,   313. 

In  Jordan  v.  Coffield.  70-110,  it  is  said  that  the  liability  of  the  mother 
to  support  the  children  is  not  the  same  as  in  case  of  the  father:  but  tins 
is  questioned  in  88 — 33. 


254  FORMATION    OF    CONTRACT. 

3.  Voidable    contracts. 

(102)  SKINNER  v.  MAXWELL, 

66  N.   C,  45—1872. 

Dick,  J.  The  plaintiff  purchased  a  stock  of  goods  from  the 
defendant  for  the  purpose  of  carrying  on  the  business  of  trade  and 
merchandise.  He  paid  a  certain  amount  in  cash  and  executed  a 
note  for  the  balance  of  the  purchase-money  which  he  secured  by  a 
mortgage  on  the  stock  of  goods.  After  this  purchase  the  plaintiff 
bought  other  goods,  which  in  the  course  of  his  business  were 
placed  in  the  store  with  the  stock  which  he  had  received  from  the 
defendant. 

The  day  of  redemption,  specified  in  the  mortgage,  having  passed 
without  payment,  the  defendant,  as  mortgagee,  took  possession  of 
all  the  goods  in  the  store,  and  against  the  will  of  the  plaintiff,  was 
about  to  sell  the  same  to  satisfy  the  mortgage  debt.  This  suit  was 
commenced  for  the  purpose  of  rescinding  the  contract  of  purchase 
and  the  mortgage,  and  an  order  for  an  injunction,  and  the  ap- 
pointment of  a  receiver  was  asked  for  to  prevent  the  sale,  and 
protect  the  property  until  the  rights  of  the  parties  in  this  contro- 
versy are  determined  by  the  court. 

The  plaintiff  alleges  in  his  complaint  that  at  the  date  of  his  con- 
tract with  the  defendant,  he  was  an  infant  and  still  continues  of 
nonage,  and  demands  by  way  of  relief,  that  said  contract  and 
mortgage  be  entirely  rescinded,  etc.  This  allegation  of  infancy  is 
not  denied  in  the  answer,  and  is  thereby  admitted  for  the  purposes 
of  this  action. 

We  will  not  consider  the  question  of  fraud  mentioned  in  the 
complaint,  or  the  merits  of  the  controversy,  as  the  plaintiff  is 
entitled  to  a  rescission  of  the  contract  on  the  ground  of  his  infancy. 

As  a  general  rule  the  contract  of  an  infant  is  not  void,  but 
voidable.  Such  a  contract  is  incapable  of  being  enforced  at  law 
by  the  adult  party,  if  the  infant  chooses  to  plead  his  infancy.  It 
is,  however,  capable  of  being  ratified  by  the  infant  when  he  attains 
his  majority. 

Contracts  entered  into  by  infants  for  the  purpose  of  trade  and 
business  are  viewed  with  great  suspicion  by  the  courts,  and  have 
been  frequently  declared  absolutely  void.  The  courts  are  very 
watchful  over  the  rights  of  an  infant,  who  in  contemplation  of  law 
is  incapable  of  carrying  on  business  and  trade  with  proper  discre- 
tion ;  and  a  contract  made  by  him  for  this  purpose,  if  it  is  mani- 
festly prejudicial  to  his  interests,  will  be  set  aside. 

The  principles  which  govern  the  contracts  of  infants  are  not 
distinctly    defined    and    well    settled    in    the   books,    but   the   better 


CAPACITY    OF    PARTIES.  255 

opinion  seems  to  be,  that  every  contract  of  an  infant  is  capable  of 
being  ratified,  and  is,  therefore,  only  voidable. 

When  an  infant  is  sued  upon  a  contract,  he  can  protect  himself 
from  a  recovery  by  a  plea  of  infancy;  but  he  does  not  have  to 
wait  until  he  is  sued  in  order  to  disaffirm  his  contracts. 

Contracts  which  relate  only  to  persons  or  personal  property  may 
be  avoided  by  an  infant  during  his  minority  by  any  act  which 
clearly  manifests  such  a  purpose.     1  Parsons,  322. 

The  effect  of  such  disaffirmance  is  to  restore  the  property  which 
remains  to  the  person  from  whom  it  was  obtained  by  the  infant. 
It  is  held' that  an  infant  can  not,  during  his  minority,  completely 
avoid  a  contract  relating  to  land,  but  his  disaffirmance  only  sus- 
pends the  matter,  and  when  he  arrives  at  age,  he  is  at  liberty  to 
revive  and  enforce  such  contract.     1  Parsons,  322,  8  Jones,  125. 

In  our  case  the  infancy  of  the  plaintiff  being  admitted  in  the 
pleadings,  the  prayer  of  the  complaint,  disaffirmed  the  contract  of 
purchase  and  the  mortgage,  and  the  defendant  became  entitled  to 
so  much  of  the  property  in  the  store  as  belonged  to  the  original 
stock,  and  the  plaintiff  was  entitled  to  the  goods  afterwards  pur- 
chased by  him.  The  prayer  for  an  order  of  injunction,  and  for  a 
receiver  was  properly  allowed  by  His  Honor. 

(103)  FRANCIS  v.  FELMIT, 

20  N.   C,  637—1839. 

This  was  an  action  of  assumpsit.  The  defendant  agreed  to  work 
for  the  plaintiff  for  three  years  at  the  carpenter's  trade ;  the  plain- 
tiff was  to  teach  him  the  trade,  board  him,  furnish  him  with  $90 
worth  of  clothing  during  the  time,  and  at  the  end  of  the  time  give 
him  a  suit  of  clothes  and  a  set  of  tools;  the  defendant  worked 
two  years  and  four  months  and  quit;  the  plaintiff  taught  him  the 
trade,  boarded  him,  gave  him  $114  worth  of  clothing  and  a  set  of 
tools,  and  now  sues  for  breach  of  the  contract  and  to  recover  the 
value  of  these  articles;  the  defendant  pleaded  infancy.  There 
was  a  judgment  for  the  defendant,  and  the  plaintiff  appealed. 

Affirmed. 

Daniel,  J.  The  first  count  is  founded  on  a  breach  of  a  special 
agreement,  entered  into  by  the  defendant,  to  work  and  labor  for 
the  plaintiff  for  the  term  of  three  years,  for  the  consideration 
therein  expressed.  We  think  that  the  plea  of  infancy  was  a  good 
bar  to  any  recovery  on  this  count.  Contracts  entered  into  by  a 
person  within  the  age  of  twenty-one  years  are  not  binding  unless 
they  be  for  the  supply  of  necessaries,  or  unless  he  has  confirmed 
them  after  he  has  attained  that  age.  The  second  count  is  on  a 
quantum  meruit  for  necessaries  furnished  to  the  infant  defendant. 


256  FORMATION    OF    CONTRACT. 

The  plaintiff  proved  that  he  had  furnished  the  defendant  with  nec- 
essaries. The  defendant,  under  the  plea  of  nonassumpsit,  was 
permitted  by  the  court  to  give  evidence  that  he  was  an  able-bodied 
young  man,  and  that  he  worked  and  labored  for  the  plaintiff,  and 
in  that  way  paid  for  the  necessaries  which  had  been  furnished 
him.  The  Judge  charged  the  jury  that  if  they  were  satisfied  that 
the  defendant's  services  were  equal  to,  or  exceeded  in  value,  the 
necessaries  furnished,  they  would  find  for  him.  We  see  no  error 
in  the  admission  of  the  evidence  or  in  the  charge  of  the  Judge. 
Under  nonassumpsit,  evidence  of  payment  in  work  and  labor,  or 
in  any  other  thing  which  shows  that  the  demand  had  been  ex  equo 
et  bono  extinguished  before  the  commencement  of  the  action  is 
proper.     The  judgment  must  be  affirmed. 

(104)    DRUDE  v.  CURTIS, 

183  Mass.,  317,  67  N.  E.,  317,  62  L.  R.  A.,  755—1903. 

Hammond,  J.  Both  parties  being  infants  at  the  time  of  the 
contract,  either  could  avoid  it  without  a  return  of  the  considera- 
tion. But  neither  could  avoid  it  in  part.  He  must  avoid  it  wholly, 
if  at  all.  And  if  the  infant,  when  avoiding  the  contract,  has  in 
his  hands  any  of  the  specific  fruits,  the  act  of  avoiding  the  con- 
tract by  which  he  acquired  such  property  will  divest  him  of  all 
right  to  retain  the  same,  and  the  other  party  may  reclaim  it. 
Chandler  v.  Simmons,  97  Mass.,  514,  97  A.  R.,  117.  The  plain- 
tiff, who  was  the  buyer,  sought  first  to  exercise  his  right  to  avoid, 
and  brought  this  action  to  recover  the  money ;  and,  if  the  defend- 
ant also  had  not  been  an  infant,  he  would  have  had  no  defense 
upon  the  count  in  contract,  because  the  law  would  have  implied  a 
contract  upon  his  part  to  refund  the  money.  But  the  difficulty 
with  the  plaintiff's  case  is  that  the  defendant  is  meeting  the  plain- 
tiff with  a  weapon  like  that  used  by  him,  to  wit,  avoidance  of  a 
contract  on  the  ground  of  infancy.  And  while  the  infancy  of  the 
plaintiff  is  a  shield  to  him,  it  does  not  prevent  the  defendant  from 
relying  upon  his  own  infancy  in  turn  as  a  shield  to  him.  So  far 
as  respects  the  right  of  defendant  to  take  advantage  of  his  own 
infancy,  it  is  immaterial  whether  the  plaintiff  be  an  infant  or  an 
adult.  Can  the  plaintiff  recover  in  this  action  the  money  paid  by 
him  to  the  defendant?  The  defendant  spent  it  before  the  plaintiff 
avoided  the  contract.  His  plea  is  a  complete  defense  to  the  counts 
in  contract.  So  the  court  ruled,  and  we  do  not  understand  that 
the  correctness  of  this  ruling  is  contested  by  the  plaintiff.  If  at 
the  time  the  plaintiff  elected  to  avoid  the  contract  the  defendant 
had  in  his  possession  the  same  money  which  he  received  from  the 
plaintiff,  then  since,  by  reason  of  the  avoidance,  the  defendant  had 


CAPACITY  OF  PARTIES.  257 

no  further  right  to  hold  it,  the  plaintiff  perhaps  might  have  main- 
tained replevin,  or,  upon  proper  proceedings  taken,  have  main- 
tained trover  as  for  a  subsequent  conversion.  (The  court  then 
holds  that  trover  would  not  lie  if  the  money  had  been  spent,  be- 
cause there  was  no  tortious  act.) 

The  generally  accepted  doctrine  is  that  all  contracts  of  infants  are 
voidable  at  the  "option  of  the  infant,  while  the  other  party  is  bound. 

A  being  in  debt  sold  a  stock  of  goods  to  B,  an  infant,  who  promised  to 
pay  certain  debts  of  A  as  the  consideration.  This  was  voidable  as  to  B. 
but  if  made  in  good  faith,  the  creditors  of  A  could  not  set  it  aside  for 
this  reason.  Hislop  v.  Harris,  68—141;  Tenn.  Mfg.  Co.  v.  James,  91  Tenn., 
154,  18  S.  W.,  262,  15  L.  R.  A.,  43  (contract  for  services).  A  person  is 
liable  for  causing  an  infant  to  violate  his  contract.  State  v.  Harwood, 
104-724. 

A  bequeathed  to  B,  an  infant  bound  to  him  as  apprentice,  a  horse,  saddle 
and  bridle,  worth  $75;  the  executors  refused  to  give  the  legacy,  but  finally 
compromised  by  giving  B  a  cow  and  calf  and  a  sow  and  pigs  :  B  was  not 
bound  by  the  compromise,  and  could  recover  the  legacy,  but  he  would 
have  to  account  for  the  property  gotten.     Tipton  v.  Tipton,  48—552. 

Deeds.— An  infant  is  presumed  to  assent  to  a  deed  made  for  his  benefit, 
but  he  can  repudiate  it  after  coming  of  age.  Gaylord  v.  Respass,  92—559. 
Where  a  deed  was  made  by  A  to  B,  an  infant,  and  delivered  to  C  for  B,  a 
subsequent  arrangement  between  A  and  C  for  C's  benefit,  and  to  destroy 
B's  deed,  would  not  affect  B's  title,  as  he  was  incapable  of  parting  with 
the  deed  or  assenting  to  its  destruction.  Brindle  v.  Herren,  88—383. 
Whether  a  deed  of  bargain  and  sale  made  by  an  infant  is  void  or  voidable 
was  discussed  bv  Ruffin,  C.  J.,  in  Hoyle  v.  Stowe,  19—320.  Xow  consid- 
ered voidable.  Alord.  Lect,  665-667;  Baggett  v.  Johnson,  160—26;  Bool 
v.  Mix,   17  Wend.,   119,  31   A.  D.,  285. 

Negotiable  instrument.— This,  like  any  other  contract  of  an  infant,  is 
voidable.  But  "the  endorsement  or  assignment  of  the  instrument  by  a 
corporation,  an  infant,  or  married  woman  passes  the  property  therein, 
notwithstanding  that  from  want  of  capacity  the  corporation,  infant,  or 
married  woman  may  incur  no  liability  thereon."  Revisal,  2180.  The  law 
before  this  was  that  such  endorsement  made  a  valid  title  as  against  the 
maker  of  the  note,  but  the  infant  could  still  avoid  it.  Whether  this 
changes  the  law  has  not  been  clearlv  decided.  That  it  does  not,  see 
4  Am.  &  Eng.  Encvc,  167,  and  note:  22  Cyc,  588;  1  Dan.  Xeg.  Inst.,  sec. 
227.     Bunker  on  Xeg.  Inst.  Law,  p.  6,  and  note,   contra. 

As  to  liability  on  negotiable  instruments  generally,  see  4  Am.  &  Eng. 
Encvc,  165-167;"  16  Am.  &  Eng.  Encyc.  284;  Armfield  v.  Tate,  29—258. 

Judgment.— The  manner  in  which  actions  may  be  brought  by  and  against 
infants  is  regulated  by  statute,  Clark's  Code,  sees.  180,  181  ;  but  when  an 
infant  sues  in  his  own  name,  without  guardian  or  next  friend,  the  judg- 
ment is  voidable  bv  him.  Tate  v.  Mott,  96—19.  When  an  infant  sues  by 
guardian  or  next  friend  for  services  rendered,  he  is  bound  by  the  judg- 
ment; if  he  sues  alone,  the  defendant  may  object  by  plea  in  abatement  for 
nonage:  if  objection  is  not  taken  in  apt  time,  it  is  waived.  Hicks  v.  Beam, 
112—642. 


258  FORMATION    OF    CONTRACT. 

4.  Ratification    and    avoidance. 
(105)  WARD  v.  ANDERSON, 

111    X.   C,    115,   15   S.   E.,  933—1892. 

Edward  Anderson  and  wife,  Letitia,  and  Matilda  A.  Sexton,  a 
minor,  executed  two  notes  to  John  Beavans,  one  for  $150,  and 
one  for  $50,  and  secured  the  same  by  two  mortgages  on  the  land 
of  the  minor.  Afterwards  they  executed  a  mortgage  on  the  same 
land  to  Spencer  Ward  to  secure  a  debt  of  $400.  The  last  mort- 
gage contained  the  recital,  "which  said  tract  is  subject  to  a  prior 
lien  in  favor  of  John  Beavans  for  $200,"  and  was  executed  after 
Matilda  Sexton  was  of  age.  The  court  held  that  this  was  a  rati- 
fication, and  defendants  appealed. 

AvERY,  J.  The  question  presented  by  this  appeal  is  whether 
the  mortgage  deeds  executed  by  an  infant,  and  purporting  to  con- 
vey land  to  John  Beavans  to  secure  two  notes,  one  for  $150,  and 
the  other  for  $50,  were  ratified  by  a  recital  in  reference  to  the 
same  land  in  a  second  conveyance  of  it  to  secure  debts  made  after 
his  arrival  at  the  age  of  twenty-one,  and  in  the  following  words 
inserted  immediately  after  the  description,  to  wit,  "Which  said 
tract  is  subject  to  a  prior  lien  in  favor  of  John  Beavans,  for  the 
sum  of  $200,"  it  being  admitted  that  no  other  mortgage  deeds 
were  ever  executed  by  the  infant  to  said  Beavans. 

In  McCormic  v.  Leggett,  38  N.  C,  427,  Chief  Justice  Pearson 
stated  the  rule  governing  the  ratification  of  the  voidable  contracts 
of  infants  after  attaining  their  majority  to  be  "that  the  deed  of 
an  infant  is  not  void,  but  is  voidable  by  him  after  he  arrives  at 
age.  That  in  order  to  avoid  the  deed  mere  words  are  not  suffi- 
cient, but  there  must  be  some  deliberate  act  done,  by  which  he 
takes  benefit  under  the  deed  or  expressly  recognizes  its  validity." 
In  Hoyle  v.  Stowe,  19  N.  C,  320,  cited  in  McCormic  v.  Leggett, 
supra.  Chief  Justice  Ruffin,  after  doubting  Houser  v.  Reynolds, 
2  N.  C,  143,  stated  the  rule  in  reference  to  verbal  declarations, 
relied  on  as  a  ratification  of  an  infant's  contract,  to  be  that  they 
operate  as  a  confirmation  of  the  deed  only  where  they  "are  directly 
between  the  parties  to  the  deed  and  contain  an  explicit  recognition 
of  the  deed  and  expression  of  the  maker's  satisfaction  with  it,  as  a 
conveyance."  If  the  ratification  is  in  words  it  must  amount  to 
an  express  promise,  made  to  the  party  to  be  benefited  by  it,  or  "an 
unequivocal  act  from  which  the  inference  is  certain  that  a  legal 
liability  was  meant  to  be  acknowledged."  Ibid.,  p.  328.  But  an 
infant  can  disavow  his  voidable  deed  after  arriving  at  full  age, 
without    directly   treating   with   the   grantee,   either   verbally   or   in 


CAPACITY     <>F     PARTIES.  259 

writing,  by  executing  a  deed  for  the  same  land  to  a  stranger. 
Hoyle  v.  Stowe,  supra.  Jt  was  held  by  the  court  of  New  York 
that  a  second  conveyance  after  an  infant  attained  his  majority, 
was  such  a  solemn  act  that  even  though  the  bargainor  was  out  of 
possession,  and  it  was  therefore  inoperative  to  pass  the  land,  yet, 
being  equally  as  notorious  as  the  first  conveyance  and  inconsistent 
with  the  recognition  of  its  validity,  it  was  "an  effectual  avoidance 
of"  the  first  deed.  Jackson  v.  Burchin,  14  Johns.,  124;  Jackson 
v.  Carpenter,  11  Johns.,  539. 

In  our  case  Beavans  relies  not  on  a  verbal  promise,  but  upon  a 
solemn  deed,  which  though  executed  to  a  stranger,  contained  the 
most  explicit  acknowledgment,  deliberately  made,  that  the  former 
conveyances  had  created  a  lien,  still  subsisting  and  superior  to  that 
created  by  the  mortgage  deed  to  Ward. 

In  the  later  case  of  Turner  v.  Gaither,  83  N.  C,  362,  Chief 
Justice  Smith  quoted  the  language  of  Greenleaf  (2  vol.,  sec.  367), 
in  which  a  distinction  is  drawn  between  executed  and  executory 
contracts. 

We  have  in  America  two  lines  of  authorities,  the  one  holding 
that  the  infant's  contract  imposes  no  liability  on  him  until  created 
by  a  new  ratification,  having  all  the  elements  of  a  new  contract, 
except  a  new  consideration ;  the  rule  being  that  there  must  be 
either  "an  express  promise,  or  such  acts,  after  the  infant  becomes 
of  age,  as  practically  lead  to  the  conclusion  that  he  intended  to 
ratify  the  contract."  The  other  theory  is  that  the  infant,  on  at- 
taining his  majority,  may  ratify  the  contract  "upon  the  same  prin- 
ciples, for  the  same  reasons,  and  by  the  same  means,  as  a  debt 
barred  by  the  statute  of  limitations  may  be  revived."  10  Am.  & 
Eng.  Enc,  645.  This  court  may  be  classified  as  one  of  those  that 
demands  unequivocal  evidence  of  an  intention  to  ratify  the  void- 
able act,  but  the  distinction  is  clearly  recognized  that  mere  words 
relied  upon  as  a  confirmation  must  have  all  the  elements  of  a  new 
contract  between  the  parties,  while  a  solemn  and  notorious  act, 
such  as  executing  a  deed  that  contains  a  recital  inconsistent  with 
the  disaffirmance  of  the  voidable  conveyance,  or  a  new  deed  alien- 
ing the  land  to  another,  may  operate  as  a  ratification  or  repudia- 
tion, though  the  grantee  in  both  cases  is  a  stranger,  and  the  gran- 
tee in  the  original  deed,  made  during  infancy,  is  not  present  nor 
a  party  to  the  subsequent  deed. 

We  find  in  support  of  our  view  that  the  Supreme  Court  of 
Massachusetts,  at  a  very  early  period  of  its  history,  held  that  a 
subsequent  deed  of  a  grantor  made  after  arriving  at  his  majority 
for  the  whole  of  a  piece  of  land,  recognizing  by  a  recital  a  former 
conveyance  for  a  part  of  the  same  land  executed  during  infancy 
and  conveying  subject  to  it,  ratified  his  former  deed  and  made  it 


260  FORMATION    OF    CONTRACT. 

effectual  in  law  to  pass  the  land  purporting  to  be  conveyed  by  it. 
Bank  v.  Chamberlain,  15  Mass.,  220.  Other  courts  of  this  country 
have  approved  the  principle  laid  down  in  that  case.  Scott  v. 
Buchanan,  11  Humph.  (Tenn.),  468;  Palmer  v.  Miller,  25  Barb., 
399;  Irvine  v.  Irvine,  9  Wall,  617;  Linde  v.  Budd,  2  Paige,  191. 
Precisely  the  same  question,  however,  has  been  passed  upon  by 
some  other  courts,  and  they  have  followed  the  rule  stated  in  Bank 
v.  Chamberlain,  supra;  Losey  v.  Bond,  95  Ind.,  67. 

There  is  a  striking  analogy  between  the  case  at  bar  and  that  of 
Hinton  v.  Leigh,  102  N.  C,  28,  in  which  it  was  held  that  a  simi- 
lar recital  in  a  mortgage  deed  of  a  lien  created  by  a  deed  of  trust 
executed  previously  but  admitted  to  registration  after  the  deed  of 
later  date,  created  a  charge  upon  the  land  mentioned  in  the  recital 
for  the  payment  of  the  debt  intended  to  be  secured  by  the  first 
mortgage,  which  the  courts  would  enforce  by  ordering  a  sale, 
unless  the  debt  should  be  discharged  by  a  certain  day.  The  judg- 
ment of  the  court  below  in  our  case  declares  the  lien  created  by 
the  ratification  of  the  deed  executed  during  infancy,  and  a  sale  is 
ordered  on  default  in  the  payment  of  the  debt  due  to  the  defend- 
ant, Beavans,  before  the  day  mentioned. 

For  the  reasons  given,  we  think  that  in  holding  that  the  mort- 
gage deed  executed  during  infancy  was  made  effectual  by  the  sub- 
sequent recital  as  far  as  to  create  a  charge  superior  to  the  lien  of 
the  second  conveyance,  there  was 

No    error. 

(106)   PIPPEN  v.  MUT.  BEN.  L.  INS.  CO., 

130  N.  C,  23,  40  S.  E.,  822,  57  L.  R.  A.,  505—1902. 

This  was  an  action  to  recover  $1,000  upon  an  insurance  contract. 
The  plaintiff's  intestate,  being  under  age,  took  out  a  life  insurance 
policy,  and  afterwards  surrendered  it  to  the  company  for  the  sum 
of  $54,  and  died  before  coming  of  age.  There  was  a  judgment 
for  the  defendant,  and  plaintiff  appealed.  Affirmed. 

Cook,  J.  .  .  .  The  good  faith  and  fairness  of  these  transactions 
with  the  infant  intestate  is  not  questioned;  and  it  is  expressly  stated 
in  the  case  agreed  that  "the  said  surrender  was  voluntarily  made 
and  executed  in  writing  by  the  said  intestate  bona  fide  and  without 
compulsion  or  undue  influence  on  the  part  of  the  defendant." 
The  main  contention  of  the  plaintiff  is  that  the  surrender  of  the 
policy  by  his  infant  intestate  was  a  voidable  contract,  which  he, 
in  this  action,  seeks  to  avoid,  and  sues  to  recover  upon  the  orig- 
inal contract  of  insurance  which  he  endeavors  to  affirm.  His 
Honor,  upon  the  facts  agreed,  rendered  judgment  in  favor  of  the 


CAPACITY    OF    PARTIES.  261 

defendant,  and  plaintiff  appealed.  We  sustain  His  Honor,  and 
hold  that  the  plaintiff  is  not  entitled  to  recover. 

The  contract  of  insurance  made  with  the  infant,  plaintiff's  in- 
testate, was  not  for  necessaries,  and  was  therefore  voidable  at 
his  election,  but  binding  upon  the  defendant  company.  It  was  an 
executory  contract  (Lovell  v.  Ins.  Co.,  Ill  U.  S.,  264),  relating 
to  personalty;  (Coningland  v.  Smith,  79  N.  C,  303;  Simmons  v. 
Biggs,  99  N.  C.  236;  Hooker  v.  Sugg,  102  N.  C,  115,  3  L.  R.  A., 
217,  11  A.  S.  R.,  717),  and  could  therefore  be  avoided  by  him 
during  his  infancy.  State  v.  Howard,  88  N.  C,  650;  Clark  Cont., 
244.  His  disaffirmance  could  have  been  made  either  by  refusing  to 
perform  his  part  of  the  contract,  and  then  pleading  his  disability 
in  a  suit  for  its  enforcement ;  or  by  a  voluntary  annulment  or  can- 
cellation made  by  agreement  with  the  company.  And  it  appears 
that  he  adopted  the  latter  course  by  a  voluntary  surrender  of  the 
policy  and  receiving  its  cash  value. 

But  it  was  argued  by  the  learned  counsel  for  the  plaintiff  that 
the  intestate  did  not  receive  the  full  amount  to  which  he  was  en- 
titled by  reason  of  the  terms  expressed  in  a  "note"  or  condition 
appearing  on  the  policy.  Be  that  as  it  may,  the  disaffirmance  of 
the  contract  by  voluntarily  surrendering  it  rendered  the  contract 
void  ab  initio,  and  the  intestate  then  became  entitled  to  be  restored 
to  his  original  status,  which  is  not  the  subject  of  this  controversy. 

It  is  further  insisted  by  the  plaintiff  that  the  surrender  or  de- 
livering up  of  the  policy,  in  consideration  of  the  sum  paid  to  him 
by  the  company,  was  a  sale  of  the  policy  made  by  his  intestate  to 
the  company,  and  in  this  action  he,  having  affirmed  the  contract 
of  insurance,  disaffirms  the  sale,  and  is  therefore  entitled  to  re- 
cover upon  the  policy,  although  it  had  been  delivered  to  the  com- 
pany. This  contention  can  not  be  sustained,  because  the  property, 
or  interest,  so  vesting  in  the  intestate,  was  a  contingency  liable  to 
be  defeated  and  incapable  of  delivery,  actual  or  constructive,  and 
therefore  not  the  subject  of  sale;  or,  should  it  be  considered  an 
assignment,  the  instant  the  interest  of  the  intestate  passed  out  of 
him  into  the  company,  eo  instanti  the  obligations  therein  imposed 
ceased  and  the  contract  was  rescinded. 

In  the  case  of  Edgerton  v.  Wolf,  6  Gray,  453,  the  defendant, 
an  infant,  purchased  a  horse,  which  was  delivered  to  him,  with  the 
right  to  return  the  horse  if  he  could  not  get  the  money  to  pay  for 
him,  and,  after  failing  to  get  the  money,  returned  the  horse  to  the 
vendor  plaintiff;  but  afterwards  took  the  horse  from  the  plaintiff's 
possession  and  sold  him.  The  court  there  held  that  the  sale  made 
to  the  infant  was  voidable  at  his  election,  and  his  returning  the 
horse  voluntarily,  intending  to  give  up  all  his  interest  in  the  prop- 
erty, was  an  avoidance  of  the  contract,  and  all  the  rights  of  the 


262  FORMATION    OF    CONTRACT. 

vendor  revested  in  him,  and  the  infant  defendant  ceased  to  have 
any  right  over  the  property,  and  could  not  retake  the  same  against 
the  will  of  the  vendor  plaintiff. 

So,  it  appearing  that  the  surrender  of  the  policy  was  a  disaf- 
firmance of  the  original  contract  of  insurance,  rendering  the  same 
absolutely  void  ab  initio  (Clark  Cont.,  258),  a  "disaffirmance  can 
not  he  retracted.  Ratification  of  a  contract,  after  it  has  been 
once  disaffirmed,  comes  too  late.  .  .  .  When  the  infant  has  exercised 
the  privilege  to  rescind  his  contract,  he  can  not  afterwards  aban- 
don or  repudiate  the  rescission  and  take  the  other  alternative." 
"The  contract  having  been  made  void,  can  not  be  revived,  except 
by  mutual  consent,"  says  the  court  in  McCarty  v.  Iron  Co.,  92 
Ala.,  463,  12  L.  R.  A.,  136.  There  is  no  error,  and  the  judgment 
of  the  court  below  must  be  affirmed. 

Contracts  relating  to  personalty  may  be  disaffirmed  during  infancy,  State 
v.  Howard,  88—650;  Stoll  v.  Hawks,  179  Mich.,  51,  146  N.  W.,  229,  51  L. 
R.  A.  (N.  S.),  28;  but  contracts  as  to  realty  can  not  be  disaffirmed  or 
ratified  during  infancy.  McCormic  v.  Leggett.  53—425;  Tillery  v.  Land 
Co.,  136 — 537.  Disaffirmance  must  be  within  a  reasonable  time  after  com- 
ing of  age,  which  is  held  to  be  three  years.  Weeks  v.  Wilkins,  134 — 516; 
Baggett  v.  Jackson,  160 — 26. 

Who  may  avoid. — Only  the  infant  or  his  privies  in  blood  can  take  ad- 
vantage of  his  disability ;  but  after  he  has  avoided  a  deed,  any  one  may 
disaffirm   it.      Hoyle  v.   Stowe,   19—320;   Mord.  Lect,   667. 

What  amounts  to  ratification  or  disaffirmance. — There  is  a  difference 
between  executed  and  executory  contracts.  In  the  former  any  act  amount- 
ing to  an  acknowledgment  of  liability  will  operate  as  a  ratification;  while 
in  the  latter  there  must  not  only  be  an  acknowledgment  of  liability,  but 
an  express  confirmation  or  new  promise  voluntarily  made  upon  coming  of 
age,  and  with  the  knowledge  that  lie  is  not  legally  bound.  Turner  v. 
Gaither.  83—357 :  Petty  v.  Rosseau.  94—355 ;  Alexander  v.  Hutchinson. 
9—535,  12—13;  Mord.  Lect.,  668  et  seq.;  Lanning  v.  Brown,  84  Ohio  St., 
385,  95  X.  E.,  921,  Ann.  Cas.,  1912  C,  772;  Bool  v.  Mix.  17  Wend..  119.  31 
A.  D.,  285. 

"I  shall  have  to  pay,  I  suppose,  but  I  shall  do  so  at  my  convenience," 
is  not  a  sufficient  promise.  Dunlop  v.  Hales,  47—381.  •  "It  is  a  just  debt, 
and  I'll  pay  it  if  I  ever  get  so  I  can  without  inconvenience  to  myself,"  is 
insufficient.  Bresee  v.  Stanley,  119 — 278.  Where  an  infant  gave  bis  note 
for  the  purchase-money  of  land,  and  after  coming  of  age  remained  in 
possession  and  promised  to  pay,  it  is  a  ratification.  Armlield  v.  Tate 
29—258:  Dewey  v.  Burbank,  77—259.  A  deed  of  an  infant  may  be  ratified 
or  disaffirmed  by  act  of  the  parties  after  coming  of  age,  and  perhaps  by 
long  and  unreasonable  acquiescence  in  the  possession  and  enjoyment  of 
the  property.  Epps  v.  Flowers,  101 — 158;  Cox  v.  McGowan,  116 — 131. 
The  receipt  of  the  purchase-money  after  coming  of  age  is  a  ratification, 
though  advised  by  counsel  that  it  would  not  be.  Norwood  v.  Lassiter, 
132 — p.  55:  McCormic  v.  Leggett,  53—425.  When  a  guardian  purchased 
a  horse  and  buggy  for  his  ward,  who  kept  them  after  he  came  of  age,  sold 
them  and  used  the  money,  it  is  a  ratification.  Coffey  \.  McMichael,  64 — 
507.  If  a  deed  of  bargain  and  sale  by  an  infant  is  void,  a  second  delivery 
after  coming  of  age  will  make  it  valid:  if  voidable,  a  statement  endorsed 
on  the  deed  would  ratify  it.  Murray  v.  Shanklin,  20 — p.  435;  and  the  exe- 
cution of  a  deed  to  another  would  he  a  disaffirmance.  Hoyle  v.  Stowe, 
19 — 320.  A  judgment  in  a  proceeding  to  which  an  infant  is  not  a  party 
is  void  as  to  him,  and  the  receipt  of  money  under  it  does  not  confirm  it. 
but   he  may  have   to   account    for   the   money.      Stancill    v.   Gay,   93 — 462.     A 


CAPACITY     OF     PARTIES.  263 

contract  as   to  personalty   may   be   disaffirmed   by   an    infant    during  in fancj 

or  after  coming  of  age'  by  refusing  to  perform  it,  by  pleading  disability, 
or  by  dealing  with  the  property  as  his  own.  Pippen  v.  Ins.  Co.,  130—23; 
State   v.    Howard,   88—650. 

Where  an  infant  feme  covert  :igned  a  deed  but  no  probate  was  taken, 
signing  again  with  her  husband  after  coming  of  age  is  no  ratification, 
and  executing  a  new  deed  to  another  is  a  disaffirmance.  Gaskins  v.  Allen, 
137 — 426.  Under  the  old  law,  Rev.  Stat.,  chap.  37,  sec.  9,  when  an  infant 
feme  covert  acknowledged  the  execution  of  a  deed  and  private  examina- 
tion was  taken,  it  was  conclusive.  Wright  v.  Player,  72—94:  Woodbourne 
\.  Gorrell,  66—82:  hut  not  so  under  present  law.  lones  v.  Cnhen,  82- 
p.  78:  Epps  v.  Flowers,   101—158;   Kidd  v.  Venable,_  111— 535. 

\\  here  a  guardian  gave  an  option  on  his  ward's  land  until  April  23. 
signing  by  the  ward  on  April  28,  is  not  a  ratification.  Leroy  v.  Jacobsky, 
134—459." 

Marriage. — While  this  is  a  contract,  it  differs  from  other  contracts  in 
several  respects,  especially  in  that  it  can  lie  entered  into  by  a  minor.  The 
age  for  consent  in  males  is  10.  and  in  females  14  (Rev.,  2082)  ;  entered 
into  under  that  age  it  is  voidable,  and  if  the  parties  continue  to  Jive 
together  after  that  age  it  is  a  confirmation.  State  v.  Parker,  106—711: 
Sims  v.  Sims,  121—  p.  300:  Koonce  v.  Wallace,  52—194;  Mordecai's  Lec- 
tures, 210-213,  271;  but  an  infant  is  not  liable  for  breach  of  promise  of 
marriage.     Mord.   Lect,    176,   271,   412. 

Effect  of  ratification  or  disaffirmance. — The  infant  has  the  right  to 
ratify  or  repudiate  his  contract,  but  when  he  has  made  his  election  it  is 
irrevocable.  Norwood  v.  Lassiter,  132— p.  55;  it  is  ratified  or  disaffirmed 
in  toto  and  ab  initio,  and  neither  the  infant  nor  his  representative  can 
retract.     Cox  v.  McGowan,   116 — 131. 

Return  of  consideration. — When  an  infant  purchases  property  and  has 
it  in  his  possession  after  coming  of  age,  and  then  repudiates  the  con- 
tract, he  must  restore  it,  and  he  is  liable  for  a  tortious  use  or  disposition 
of  it ;  but  he  is  not  liable  for  such  disposition  during  infancy.  Devries 
v.  Summit.  86— p.  133;  Hodges  v.  Powell,  96— p.  69.  If  he  repudiates  the 
contract  and  has  the  property,  the  other  party  is  entitled  to  it  or  that 
into  which  it  has  been  changed,  if  he  can  reach  it;  but  the  infant  will  not 
have  to  make  it  good  if  squandered  during  infancy.  Millsaps  v.  Estis 
137 — p  546:  Mord.  Lect.,  413;  1  Parsons  Cont,  321;  Clark  Cont.,  171; 
EngleVrt  v.  Pritchett,  40  Neb.  195,  58  N.  W\,  852,  26  L.  R.  A..  177; 
Lambkin  v.  Ledoux,  101  Me.,  581,  64  Atl..  1048,  8  L.  R.  A.  (  X.  S.),  104: 
Craig  v.  Van  Bebber,   100  Mo.,  584,   18  A.   S.  R..  569. 

Misrepresenting  his  age  does  not  estop  the  infant  from  taking  advan- 
tage of  his  disability.  Loan  Association  v.  Black,  119—329:  Lowery  v. 
Cate,  108  Tenn.,  54,"  6  S.  W..  1068,  91  A.  S.  R..  744.  57  L.  R.  A..  073: 
Commander  v.  Brazile,  88  Miss.,  668,  41  So.,  497,  9  L.  R.  A.  (X.  S.),  1117; 
Tobin  v.  Spann,  85  Ark.,  556,  109  S.  W.,  534,  16  L.  R.  A.  (X.  S.),  672: 
Putnal  v.  Walker,  61  Fla.,  720,  55  So.,  844,  36  L.  R.  A.  (X.  S.),  33:  Kirk- 
ham   v.   W  heeler-Osgood   Co.,  4   Ann.   Cas.,   532,   and  note. 

Tort  in  connection  with  contract. — While  an  infant  is  liable  for  his 
torts,  he  is  not  liable  for  torts  growing  out  of  contract,  as  for  overdriving 
a  horse  which  be  has  hired.  Barnes  v.  Herrin,  44— p.  16;  Crump  v.  Mc- 
Kav,  53— p.  34;  nor  where  he  repudiates  the  contract.  Poe  y.  Home.  44— 
398.  The  weight  of  authority  in  other  courts  seems  to  be  that  where  lie 
obtains  the  property  for  one  purpose  and  uses  it  for  a  different  purpose 
and  thereby  injures  it,  he  is  liable,  as  in  hiring  a  horse  to  drive  to  one 
place  and  driving  it  to  another  place  or  beyond  the  distance  intended.  16 
\m  &•  Eng.  Encyc,  308.  309;  28  Am.  Rep..  518:  51  Am.  Rep..  340:  26  L. 
R.  A.,  300;  57  L."  R.  A.,  673,  and  notes;  but  this  doctrine  does  not  seem  to 
be  accepted  in  North  Carolina.  See  cases  cited  above,  and  Mordecai  s 
Lect..  417;  Rem.  333.  So  an  infant  is  not  liable  for  a  tort  committed  by  his 
agent  in  a  contract  relation,  but  he  may  be  liable  for  a  tort  by  agent. 
Kron  v.   Smith,  56 — p.  397. 


264  FORMATION    OF    CONTRACT. 

Sec.  5.  Insane  persons. 

1.  Mental  capacity  determined. 

(107)   BALLEW  v.  CLARK, 

24   N.   C,   23—1841. 

Action  of  ejectment.  The  plaintiff  offered  a  writing  purporting 
to  be  a  deed  for  the  land  from  M.  Ballew,  who  is  still  alive,  to 
the  lessor  of  the  plaintiff,  and  proved  that  the  defendant  held  as 
tenant  of  Ballew.  The  question  was  whether  at  the  time  of  mak- 
ing the  deed  Ballew  was  of  sane  mind.  The  court  charged  the 
jury  that  it  was  for  them  to  decide  whether  Ballew  knew  what 
he  was  doing  when  he  signed  the  deed;  that  if  he  had  not  mind 
sufficient  to  understand  what  he  was  doing,  his  act  would  be  null 
and  void ;  that  if  he  was  in  his  right  mind  at  any  time  previous  to 
the  execution  of  the  writing,  this  state  was  presumed  to  continue, 
and  the  burden  would  be  on  the  defendant  to  show  the  contrary; 
but  if  he  proved  to  the  satisfaction  of  the  jury  that  he  was  a 
lunatic  before  he  executed  the  paper,  the  burden  would  be  on  the 
plaintiff  to  show  that  he  had  his  mind  at  the  time  of  its  execu- 
tion. There  was  a  verdict  and  judgment  for  the  defendant,  and 
plaintiff  appealed. 

Daniel,  J.  We  are  of  opinion  that  the  charge  of  the  Judge 
was  correct.  The  general  rule  is,  that  sanity  is  to  be  presumed 
until  the  contrary  be  proved ;  and  where  an  act  is  sought  to  be 
avoided,  on  the  ground  of  mental  imbecility,  the  proof  of  the  fact 
lies  on  the  person  who  alleges  it.  On  the  other  hand,  if  a  general 
derangement  be  once  established,  or  conceded,  the  presumption  is 
shifted  to  the  other  side,  and  sanity  is  then  to  be  shown  at  the 
time  the  act  was  done.  3  Kent.,  451,  3  Bro.,  441,  13  Ves.,  88; 
Jackson  v.  Vanduson,  5  Johns.,  144.  The  case  states  that  the  de- 
fendant was  tenant  of  M.  Ballew ;  and,  we  understand,  that  the 
lessee  of  the  plaintiff  contended  that  the  law  would  not  allow  the 
said  Ballew  to  stultify  himself,  or  any  other  person  to  do  it  except 
his  heir-at-law  after  his  death.  In  3  Kent,  451,  it  is  said  that  the 
party  himself  may  set  up,  as  a  defense  and  in  avoidance  of  the 
contract,  that  he  was  non  compos  mentis,  when  it  was  alleged  to 
have  been  made.  The  principle  advanced  by  Littleton  and  Coke, 
that  a  man  shall  not  be  heard  to  stultify  himself,  has  been  prop- 
erly exploded,  as  being  manifestly  absurd,  and  against  natural  jus- 
tice. Yeates  v.  Bowen,  Strange,  1104;  Buller's  N.  P.,  172;  Web- 
ster v.  Woodford,  3  Day's  Rep.,  90;  Mitchell  v.  Kingman,  5  Pick., 
431  ;  Hill  v.  Peet,  15  Johns.,  503.     The  Judge  was  right,  we  think, 


CAPACITY    OF    PARTIES.  265 

in  permitting  the  defendant  to  contest  the  validity  of  the  deed,  on 
the  ground  of  insanity  of  the  supposed  bargainor.  The  judgment 
must  be  Affirmed. 

(108)  MORRIS  v.  OSBORNE, 

104  N.   C,  609,   10  S.   E.,  476—1889. 

Civil  action  on  a  bond  executed  in  1867.  To  rebut  the  pre- 
sumption of  payment  the  plaintiff  relied  on  an  entry  on  the  note, 
"January  26th,  1884.  Renewed.  T.  A.  Osborne."  There  was 
evidence  tending  to  show  that  Osborne  was  mentally  incapable  of 
making  such  acknowledgment.  There  was  a  verdict  and  judg- 
ment for  plaintiff,  and  defendant  appealed. 

Avery,  J.  His  Honor  told  the  jury  that  if  "Thomas  A.  Os- 
borne had  capacity  to  know  what  he  was  doing,  and  the  conse- 
quences of  his  act,  and  that  he  signed  the  endorsement  on  the  note, 
intending  and  meaning  to  signify  and  acknowledge  that  the  debt 
had  not  been  paid,"  they  would  find  that  the  presumption  of  pay- 
ment had  been  rebutted.  A  sane  person  is  presumed,  in  law,  to 
intend  the  natural  and  necessary  consequences  of  his  own  acts. 
8  Am.  &  Eng.  Encyc,  753.  It  was  conceded  on  the  argument 
that  it  was  not  erroneous  to  instruct  the  jury,  as  a  rule  for  testing 
mental  capacity,  that  the  person  whose  act  is  drawn  in  question 
must,  in  order  to  maintain  the  validity  of  it,  be  shown  to  know 
what  he  is  doing,  the  consequences  of  his  act,  or  that  he  must  be 
capable  in  this  case  of  understanding  the  meaning  and  import  of 
the  indorsement  on  the  note  signed  by  him.  If  Osborne  knew 
what  he  was  doing,  and  the  consequences  of  his  act,  it  would  fol- 
low inevitably  that  he  understood  when  he  signed  the  endorsement, 
"January  26th,  1884.  Renewed,"  that  he  was  acknowledging  that 
he  had  not  paid  the  note,  and  that  his  obligation  to  pay  was  still 
subsisting;  and,  further,  that,  comprehending  this,  he  must  have 
meant  or  intended  to  signify  that  the  debt  had  not  been  paid. 
This  is  but  another  method  of  defining  the  measure  of  mental 
capacity  sufficient  to  qualify  a  person  to  make  a  valid  contract. 
While  it  is  not  safe  or  advisable  to  attempt  to  frame  formulas 
that  are  synonymous  with  rules  repeatedly  approved  by  the  courts 
as  criterions  of  capacity  to  contract,  we  see  nothing  erroneous,  or 
calculated  to  mislead  the  jury,  in  the  language  objected  to  in  this 
case,  when  considered  in  connection  with  the  testimony  and  other 
portions  of  the  charge.  We  do  not  intend  to  approve  this  direc- 
tion as  adapted  to  every  case  involving  mental  capacity  to  con- 
tract. The  law  does  not  demand  that  a  person  shall  have  unusual 
culture  or  capacity  to  quality  him  to  make  a  valid  will,  but  that 
he  shall  know  the  "nature  and  character  of  the  property  disposed 


266  FORMATION    OF    CONTRACT. 

of,  who  are  the  objects  of  his  bounty,  and  how  he  is  disposing  of 
the  property  among  the  objects  of  his  bounty."  Bost  v.  Bost,  87 
N.  C,  477.  It  would  not  be  erroneous,  in  speaking  of  a  testator, 
to  say  that  he  must  have  intended  or  meant  that  one  of  his  chil- 
dren should  have  certain  stocks ;  another,  bonds,  and  a  third,  land, 
— according  to  the  provisions  of  the  will,  after  his  death.  If  he 
knew  what  he  was  doing,  he  knew  that  this  would  be  the  neces- 
sary result  of  making  such  a  will,  and  he  meant  to  signify  his  in- 
tent that  such  natural  consequences  should  grow  out  of  the  act. 
So,  when  Thomas  Osborne  signed  the  endorsement,  "Renewed 
January  26th,  1884," — if  he  knew  what  he  was  doing,  he  did  it 
to  show  or  acknowledge  that  the  debt  evidenced  by  the  note  was 
still  due  and  unpaid.  The  power  to  bind  one's  self  by  an  agree- 
ment must  not  be  made  to  depend  upon  the  ability  to  foresee  the 
remote  consequences  of  the  act ;  but  a  sane  man  must  intend  the 
natural,  immediate,  and  inevitable  results  that  follow  and  grow 
out  of  it.     There  is  No  error. 

In  Smith  v.  Smith,  108 — 365,  the  same  view  was  taken  as  in  Ballew  v. 
Clark,  supra,  but  the  action  of  the  clerk  in  appointing  a  guardian  ad  litem 
was  not  a  sufficient  finding  of  insanity  to  rebut  the  presumption.  Delirium 
tremens  is  only  temporary  insanity.  State  v.  Sewell,  48 — 245.  Insanity 
is  not  presumed  until  shown  to  exist.     Hudson  v.  Hudson,  144 — 449. 

Mere  weakness  of  intellect  is  not  sufficient  to  avoid  a  contract.  Law- 
rence v.  Willis,  75 — 471  ;  that  a  person  is  deaf  and  dumb  is  not  sufficient, 
though  formerly  he  was  considered  an  idiot.  Barnett  v.  Barnett,  54 — p. 
222;  Christmas  v.  Mitchell,  38 — 535;  he  must  be  able  "to  understand  what 
he  is  about,"  but  is  not  required  to  manage  his  affairs  with  judgment  and 
discernment.  Moffitt  v.  Witherspoon,  32—185 ;  Paine  v.  Roberts,  82 — 451  ; 
Earnhardt  v.  Smith,  86—473;  Ducker  v.  Whitson,  112—44;  Whitaker  v. 
Hamilton,  126—465;  Bond  v.  Mfg.  Co..  140—381;  neither  weakness  of 
mind  nor  old  age,  in  the  absence  of  fraud,  is  sufficient.  Smith  v.  Beatty, 
37—456;  Suttles  v.  Hav,  41—124;  Williams  v.  Haid,  118-481;  Jackson 
v.  Rowell,  87  Ala.,  685,  6  So.,  95,  4  L.  R.  A..  637;  moral  debasement  is 
not  necessarily  insanity.  Mayo  v.  Jones,  78 — 102;  hereditary  tendency  is 
only  a  circumstance  to  show   the  existence  of   insanity.     51 — 471. 

2.  Effect   of  inquisition   of   lunacy. 

(109)    PARKER  v.  DAVIS, 

53   X.   C,  460—1862. 

Action  of  assumpsit.  The  defendant  pleaded  specially  that  he 
had  a  guardian  under  a  commission  of  lunacy.  The  plaintiff  pro- 
posed to  show  that  at  the  time  the  articles  were  furnished  the  de- 
fendant was  of  sound  mind,  and  this  evidence  was  admitted  under 
objection.  The  defendant  was  a  man  of  ordinary  intelligence  when 
sober,  lint  was  much  addicted  to  drink,  and  the  articles  were  fur- 
nished to  himself  and  family.  The  court  charged  the  jury  that  if 
they  were  satisfied  the  articles  had  been  purchased  by  the  de- 
fendant, or  by  Ins  family  with  his  knowledge  and  approval,  when 


CAPACITY    OF     PARTIES.  267 

he  was  sober,  and  had  sufficient  capacity  to  understand  the  nature 
of  the  transaction ;  that  the  account  had  been  examined  by  him 
and  admitted  to  be  correct,  when  having  sufficient  capacity  to 
understand,  they  should  find  for  the  plaintiff;  otherwise,  for  the 
defendant.  Verdict  and  judgment  for  the  plaintiff,  and  defendant 
appealed. 

Battle,  ).  We  concur  in  the  opinion  expressed  by  His  Honor 
in  the  court  below.  An  inquisition  of  lunacy  is  not  conclusive, 
and  a  person  who  deals  with  the  supposed  lunatic  may  show  that 
at  the  time  the  contract  was  made  he  had  sufficient  capacity  to 
make  it.  This  was  expressly  decided  by  this  court  in  the  case  of 
Arlington  v.  Short,  10  N.  C,  71,  and  that  decision  has  been  con- 
firmed by  the  subsequent  cases  of  Christmas  v.  Mitchell,  58  N.  C, 
535,  and  Rippy  v.  Gant,  39  N.  C,  443. 

The  counsel  for  the  defendant  has  referred  us  to  the  Revised 
Code,  ch.  57,  sec.  1,  which  enacts  that  guardians  of  lunatics  shall 
have 'like  powers,  and  be  subject  to  like  remedies  on  their  bonds, 
as  guardians  of  orphans,  and  he  contends  that  all  contracts  for 
articles  or  for  services  intended  for  the  benefit  of  lunatics,  like 
those  for  infants,  ought  to  be  made  with  their  guardians,  and  that 
if  made  with  the  lunatics  themselves,  they  are  no  more  binding 
than  such  contracts  would  be  if  made  with  minors.  Fessenden  v. 
Jones,  52  N.  C,  14.  The  analogy  will  not  hold  in  cases  like  the 
present,  because  infants  must  necessarily  remain  such  until  they 
arrive  at  full  age,  when  the  guardianship  of  them  terminates;  but 
a  lunatic  may  become  of  sound  mind,  and  be  capable  of  contract- 
ing for  himself,  and  yet  the  guardianship  may  continue  until  an- 
other inquisition  is  found,  by  which  he  is  declared  to  be  of  sound 
mind  again.  Besides,  the  provision  in  the  Revised  Code,  to  which 
reference  has  been  made,  was  taken  from  the  Act  of  1784  (ch. 
228,  Revised  Code  of  1820),  which  was  long  before  the  decision, 
to  which  we  have  referred,  was  made.  The  finding  of  an  inquisi- 
tion and  the  appointment  of  a  guardian,  not  being  conclusive  upon 
the  plaintiff,  the  testimony  offered  by  him  to  show  the  capacity 
at  the  time  when  the  goods  were  purchased,  was  properly  ad- 
mitted, and  as  no  valid  objection  can  be  urged  against  the 
charge  made  thereupon  by  the  presiding  Judge,  the  judgment 
must   be  Affirmed. 

The  inquisition  is  not  conclusive,  is  also  held  in  Armstrong  v.  Short 
8—11-  Johnson  v.  Kincaid.  37-470.  Some  courts  hold  that  a  contract 
by  one  who  has  been  declared  insane  by  a  judicial  inquisition  is  void  and 
not  voidable.  2  Page  Cont..  sec.  902:  Clark  Cent,  182:  19  L.  R  A  489 
SI  T  R  A  910:  68  L.  R.  A.,  302:  except  as  to  necessaries.  16  Am  & 
Ene  Encvc.  625.  The  question  is  referred  to  in  Odom  v.  Riddick  104- 
515  and  Sprinkle  v.  Wellborn.  140-163.  3  L.  R.  A.  (X.  S.),  175,  but  not 
necessarv    to    the    decision.  .      .  .  . 

A    marriage   by   one   who   has   been    declared   a   lunatic    is   absolutely    void 


268  FORMATION    OF    CONTRACT. 

ab  initio,  and  can  be  at  any  time  so  declared  by  the  courts, — in  a  proceed- 
ing brought  either  in  the  name  of  the  guardian  or  in  the  name  of  the 
lunatic  by  the  guardian.  Sims  v.  Sims,  121 — 297;  Johnson  v.  Kincaid,  37— 
470;  Crump  v.  Morgan,  38—91;  Setzer  v.  Setzer,  97—252;  Lea  v.  Lea,  104— 
603;  Williamson  v.  Williams,  56 — 446;  Shaw  v.  Burney,  36—148;  Webber 
v.  Webber,  79— p.  576.  In  Smith  v.  Morehead,  59 — p.  363,  the  court  says: 
"Want  of  reason  makes  the  marriage  absolutely  void  ab  initio,  and  the 
pretended  marriage  may  be  so  treated  without  any  sentence  pronounced 
by  a  court."  If  the  marriage  is  void  for  want  of  mental  capacity,  no 
court  nor  legislature  can  make  it  valid.  Cooke  v.  Cooke,  61 — p.  588.  In 
Watters  v.  Watters,  168 — 411,  it  is  held  that  a  marriage  when  one  of  the 
parties  is  insane,  is  voidable  and  not  void,  but  may  be  declared  void  ab 
initio  by  a  decree  of  court  on  behalf  of  the  person  non  compos.  The  only 
void  marriages  are  those  prohibited  by  statute,  Rev.  2083,  between  the 
races  and  for  bigamy.  As  to  suit  for  divorce  for  adultery,  where  the  de- 
fendant becomes  insane,  see  Stratford  v.  Stratford,  92 — 297;  Mordecai's 
Lectures,  219-224.  For  method  of  proceeding  in  inquisition,  see  Revisal, 
1890,  and  132  N.  C,  243.  If  no  inquisition  or  guardian,  the  lunatic  may 
sue  by  next  friend.  Smith  v.  Smith,  106 — 498;  Abbott  v.  Hancock,  123 — 
99;  Clark's  Code,  sees.  180,  181. 

3.  Liability  for  necessaries. 

(110)   RICHARDSON  v.  STRONG, 

35  N.  C,  106,  55  A.  D.,  430—1851. 

Action  of  assumpsit.  The  defendant  became  insane,  and  so 
violent  as  to  attempt  to  injure  himself ;  the  plaintiff  attended  him 
as  a  nurse  and  a  guard,  at  the  request  of  his  son-in-law,  and 
under  the  direction  of  a  physician ;  upon  defendant's  recovery  he 
refused  to  pay  for  the  services,  on  the  ground  of  his  lunacy  and 
that  the  services  were  not  necessary.  There  was  a  verdict  and 
judgment  for  the  plaintiff,  and  defendant  appealed. 

Ruffin,  C.  J.  The  contracts  of  a  lunatic  are  not  all  absolutely 
void ;  but  it  is  held  that  contracts  fairly  made  with  them  for 
necessaries  or  things  suitable  to  their  condition  or  habits  of  life 
are  to  be  sustained.  The  leading  case  on  the  subject  in  England 
is  that  of  Baxter  v.  Earl  of  Portsmouth,  and  in  Tally  v.  Tally, 
22  N.  C,  385,  the  same  opinion  was  expressed  by  this  court. 
There  is,  therefore,  no  absurdity  in  the  case  of  lunatics  more  than 
in  that  of  infants  in  implying  a  request  to  one  rendering  necessary 
services  or  supplying  necessary  articles,  and  implying  also  a  prom- 
ise to  pay  for  them.  Indeed,  with  whatever  propriety  the  ancient 
maxim  that  no  one  ought  to  be  allowed  to  stultify  himself  is  de- 
nied in  modern  law,  its  application  in  a  case  of  this  kind  seems 
entirely  just.  The  urgency  of  the  case  demands  instant  help,  and 
leaves  no  opportunity  for  a  previous  application  to  a  court  having 
the  ordering  of  the  estates  to  fix  an  allowance ;  and  in  such  an 
instance  as  this,  in  which,  as  far  as  is  seen,  there  was  a  recovery 
before  a  commission  issued,  there  could  be  no  subsequent  allow- 
ance, however  assiduous  and  effective  the  attentions  to  the  party 


CAPACITY    OF     PARTIES.  269 

might  have  been.     Therefore,  there  is  no  middle  ground  between 
leaving  an  unhappy  person  thus  afflicted  destitute  of  those  services 
and  things  indispensable  to  his  proper  restraint  and  recovery,  or 
however  rich,   dependent   for  them  on  gratuitous  benevolence,  on 
the  one  hand;  or  on  the  other  of  implying  a  promise  to  pay  for 
them  what  they  may  reasonably  be  worth.     It  is  as  if  a  phyician 
administered   to   a   man   deprived   of    his    senses   by   a    dangerous 
blow,  when  the  loss  of  life  might  result  from  delay.     He  would 
certainly  be  bound  to  make  reasonable  remuneration,  though  in- 
capable at  the  moment  of  making  an  actual  request.     The  reason 
extends  to  medical  services  to  a  madman,  and  to  those  of  a  nurse 
for  him,  or  of  a  guard  to  protect  him  from  a  propensity  to  destroy 
himself  or  his  property.     In  the  case  before  the  court  the  plaintiff 
acted  at  the  instance  of  the  defendant's  medical  adviser  and  his 
nearest    friend   and   relatives,   not   insisting,    however   disagreeable 
the  duty,  on  any  stipulation   for  high  wages,  but  content  with  a 
quantum  meruit.  His  conduct  was,  therefore,  as  fair  as  it  could  be. 
Upon  the  other  point  there  is  no  doubt.     What  the  plaintiff  did 
certainly  falls  within  the  class  of  necessaries  as  defined  in  the  law. 

Judgment   affirmed. 

Contract  of  lunatics  for  necessaries  is  binding,  as  in  case  of  infants. 
Tally  v  Tally,  22—385;  and  it  applies  also  to  support  of  wife  and  chil- 
dren Brooks  v.  Brooks,  25— p.  391;  it  seems  also  to  apply  to  necessary 
expense  in  protecting  his  property,  not  being  limited  strictly  to  persona 
expense.  Young  v.  Kennedy,  95—265 ;  and  where  money  has  been  furnished 
for  the' supposed  benefit  of  a  lunatic,  he  is  liable  only  for  the  part  actu- 
ally expended  for  necessaries  for  the  lunatic  and  family.  Surles  v.  fip- 
kin,  69—513. 

4.  Contract  voidable. 

(Ill)   RIGGAN  v.  GREEN, 
80  N.  C,  236,  30  A.  R.,  77—1879. 

Civil  action  heard  on  exceptions  to  referee's  report.  The  plain- 
tiffs, as  heirs-at-law  of  Joseph  H.  Riggan,  sued  to  recover  a  tract 
of  land,  and  defendant  claims  the  land  under  a  deed  from  said 
Riggan  to  one  Brown.  The  plaintiffs  reply  that  the  deed  was 
executed  when  Riggan  was  of  unsound  mind  and  incapable  of 
making  a  deed;  the  defendant  rejoins  a  purchase  by  Brown  and 
himself  for  full  value  and  without  notice  of  any  incapacity,  and 
that  the  grantor  and  his  family  received  the  benefit  of  the  pur- 
chase-money. The  referee  found  against  the  plaintiffs,  and  His 
Honor  overruled  exceptions  and  confirmed  the  report,  and  plain- 
tiffs appealed. 

Diltard,  J.  Under  our  present  system  the  distinctive  princi- 
ples formerly  applicable  in  the  separate  courts  of  law  and  equity 


270  FORMATION    OF    CONTRACT. 

are  now  to  be  recognized  in  the  Superior  Courts,  and  such  judg- 
ment and  decree  is  to  be  pronounced,  as  the  equitable  rights  of  the 
parties  may  require.  And  in  conformity  to  this  idea,  the  order  of 
reference  in  this  case  was  drawn,  giving  the  referee  power  to  deal 
with  the  matters  under  investigation,  as  a  chancellor  under  a  bill 
to  set  aside  the  deed  of  a  lunatic.  Considered  in  this  point  of 
view,  it  becomes  material  to  inquire  what  is  the  effect  of  a  deed 
of  a  lunatic  for  land,  and  for  what  and  under  what  circumstances 
will  such  a  deed  be  set  aside,  and  a  recovery  allowed  of  the  prop- 
erty conveyed. 

The  doctrine  as  to  the  effect  of  a  deed  of  a  lunatic  is  thus  laid 
down  by  Blackstone,  2  vol.,  p.  295:  "Idiots  and  persons  of  non- 
sane  memory,  infants  and  persons  under  duress,  are  not  totally 
disabled  to  convey  or  purchase,  but  sub  modo  only ;  for  their  con- 
veyances and  purchases  are  voidable  and  not  actually  void."  In 
2  Kent's  Commentaries,  451,  it  is  said,  "that  sanity  is  to  be  pre- 
sumed until  the  contrary  be  proved,  and  therefore  by  the  common 
law  a  deed  made  by  a  person  non  compos  mentis  is  voidable  only 
and  not  void."  By  our  statute  law,  a  deed  executed  and  regis- 
tered, passes  a  seisin,  and  by  the  decisions  under  said  statute  the 
registration  of  a  deed  of  bargain  and  sale  is  equivalent  to  livery 
of  seisin  in  a  feoffment ;  Bat.  Rev.,  ch.  35,  sec.  1  ;  Hogan  v.  Stray- 
horn,  65  N.  C,  279;  Hare  v.  Jernigan,  76  N.  C,  471  ;  and  there- 
fore we  conclude  that  the  deed  of  Joseph  H.  Riggan  availed  to 
pass  an  estate  to  James  T.  Brown,  and  the  same  was  valid  until 
by  an  action  of  the  grantor  or  his  heirs  the  same  is  avoided. 

Such  being  the  operation  of  the  deed,  and  this  action  being 
brought  in  a  court  competent  to  recognize  and  administer  the  legal 
and  equitable  rights  of  the  parties  in  the  same  suit,  it  remains  to 
determine  how  the  court  ought  to  have  dealt  with  the  subject- 
matter  involved  therein. 

Courts  of  equity  ever  watch  with  a  jealous  care  every  contract 
made  with  persons  non  compos  mentis,  and  always  interfere  to  set 
aside  their  contract,  however  solemn,  in  all  cases  of  fraud,  or 
when  the  contract  or  act  is  not  seen  to  be  just  in  itself,  or  for  the 
benefit  of  such  persons ;  but  when  a  purchase  is  made  in  good 
faith,  without  knowledge  of  the  incapacity,  and  no  advantage  is 
taken,  for  a  full  consideration,  and  that  consideration  goes  mani- 
festly to  the  benefit  of  the  lunatic,  courts  of  equity  will  not  inter- 
fere therewith.  1  Story  Eq.,  sees.  227,  228;  1  Chitty  on  Contracts. 
191  ;  Molton  v.  Camroux,  2  Exc,  487.  If  a  court  of  equity  in  any 
case  sets  aside  the  deed  of  a  non  compos,  it  will  ordinarily  ad- 
minister the  equity  of  having  him  to  pay  back  to  the  other  party 
the  money  or  other  thing  received  of  him.  And  when  it  appears 
that  the  consideration  is  full  and  the  lunatic  is  not  able  to  put  the 


CAPACITY    OF     PARTIES.  271 

other  party  in  statu  quo,  or  if  the  benefit  received  is  actual  and  of 
a  durable  character,  in  either  case,  the  courts  of  equity  will  not 
be  inclined  to  set  aside  the  conveyance.  Carr  v.  Holliday,  21  N. 
C,  344;  and  same  case,  40  N.  C,   167. 

Now  in  the  light  of  these  principles,  what  ought  to  have  been 
the  conclusions  of  law  by  the  referee  on  the  facts  found  and  set 
forth  in  his  report,  and  what  should  have  been  the  judgment  in 
the  court  below  on  the  exceptions  taken  to  the  referee's  conclu- 
sions of  law?  It  is  expressly  found  as  a  fact  that  the  $500  paid 
by  Brown  to  Riggan  was  the  full  value  of  the  30  acres  conveyed 
to  him,  and  that  the  same  went  to  extinguish  an  execution  against 
the  lunatic  in  the  hands  of  an  officer,  and  that  by  means  thereof 
the  said  Joseph  H.  Riggan  was  enabled  to  keep  and  occupy,  till 
his  death,  another  piece  of  land  designated  as  his  homestead,  which 
now  by  descent  belongs  to  plaintiffs  ;  that  the  deed  to  Brown  was 
executed  in  the  family  of  the  grantor,  and  attested  by  a  brother 
and  two  sons  of  the  grantor,  and  that  Brown  and  the  defendant 
claiming  under  him,  have  ever  since  held  and  used  the  said  land  as 
their  own,  and  made  large  improvements  without  objection  or  any 
interposition  by  the  grantor  or  any  other  on  his  behalf,  and  it  is 
further  found  as  a  fact  that  the  purchase  of  defendants  was  for 
full  value  and  without  notice  of  any  incapacity  in  Joseph  H.  Rig- 
gan. From  such  a  state  of  facts  it  would  be  apparent  to  the  chan- 
cellor, and  he  would  so  decide,  that  a  rescission  of  the  deed  would 
produce  no  benefit  to  the  plaintiffs  if  coupled  with  the  duty  and 
obligation  to  replace  defendants  in  statu  quo,  whilst  it  would  be  a 
great  inconvenience  and  injustice  to  the  defendants,  and  there- 
upon the  conclusion  would  be  not  to  interfere  to  set  aside  the  deed, 
but  leave  the  same  to  be  operative  and  valid.  And  it  is  therefore 
our  opinion  that  the  referee  was  correct  in  his  conclusions  of  law, 
and  no  error  was  committed  by  the  judge  in  the  court  below  in 
overruling  the  plaintiff's  exceptions.  Affirmed. 

The  deed  of  an  insane  person  is  voidable  and  not  void,  and  the  courts 
interfere  in  such  cases  on  the  ground  of  fraud,  Creekmore  v.  Baxter, 
121 — 31  ;  and  will  not  usually  set  the  deed  aside  unless  there  has  been 
fraud,  or  knowledge  of  the  insanitv,  and  then  will  place  the  parties  in 
statu    quo.      Odom    v.    Riddick.    104—515;    Sprinkle    v.    Wellborn,    140-163, 

3  L.  R.  A.  (N.  S.),  174;  Godwin  v.  Parker,  152—672;  Tpock  v.  R.  R., 
158 — 445 ;  Smith  v.  Ryan,  191  X.  Y.,  452,  84  X.  E.,  402,  19  L.  R.  A.  (N.  S.), 
461,   14   Ann.   Cas.,   505;   Thompson   v.   Thomas,    163 — 500;   Jackson   v.    King, 

4  Cowen,  207,  15  A.  D.,  354;  Moulton  v.  Cambroux,  4  Ex.,  ch.  17.  6  E.  R.  C. 
71,  140  A.  S.  R.,  346,  and  note;  it  seems  that  after  inquisition  the  deed 
or  contract  is  void,  since  knowledge  is  generallv  conclusivelv  presumed. 
West  v.  R.  R.,  151—231;  Flach  v.  Gottschalk  Co.,  "88  Md.,  368,' 7  A.  S.  R., 
418:  Barkey  v.  Barkey,  106  X.  E..  609.  L.  R.  A.,  1915  B,  678.  A  sheriffs 
deed  is  not  void  because  the  defendant  in  execution  was  insane  at  the 
time  of  the  judgment  and  sale,  it  is  voidable.  Thomas  v.  Hunsucker, 
108 — 720.      Upon    becoming    insane    the    right    of    a    sheriff    to    exercise    his 


272  FORMATION    OF    CONTRACT. 

office  ceases,  and  the  authority  of  his  deputies  terminates.  Somers  v. 
Comrs.,    123—582. 

A  purchaser  without  notice  of  insanity  is  protected;  so  also  is  a  pur- 
chaser with  notice  from  one  not  having  notice,  or  a  purchaser  without 
notice  from  one  with  notice.  Odom  v.  Riddick,  104 — 515,  7  L.  R.  A.,  118, 
17  A.   S.   R.,   686. 

The  creditor  must  proceed  in  the  Superior  Court  as  a  court  of  general 
equity  jurisdiction  to  have  his  debt  paid  out  of  the  residue  of  lunatic's 
property,  after  allowance  made  for  his  support.  Adams  v.  Thomas,  81 — 
296.  The  same  case  again  before  the  court  in  83 — 521 ;  Blake  v.  Respass, 
77—193;  Smith  v.  Pipkin,  79—569;  Latham  v.  Wiswall,  37—294;  Mcllhenny 
v.   Trust   Co.,   108— p.  313;    McLean   v.   Breese,   109—564,    113—390. 

As  to  contracts  of  insane  persons  generally,  see  2  Page  Cont.,  sees  894 — 
901;  Clark  Cont,  178;  Mordecai's  Lectures,  660;  16  Am.  &  Eng.  Encyc, 
p.  562  et  scq.;   Pollock  Cont.,  93;  22  Cyc,  1194;  6  R.  C.  L.,  594. 

Sec.  6.  Drunken  persons. 

(112)  CAMERON-BARKLEY  CO  v.  LIGHT  &  POWER  CO., 

138  N.  C,  365,  50  S.  E.,  695,  107  A.  S.  R.,  532—1905. 

Civil  action  on  contract.  Judgment  for  defendant,  and  plaintiff 
appealed. 

Walker,  J.  This  action  was  brought  to  recover  damages  for 
the  breach  of  a  contract  whereby  the  plaintiff  agreed  to  sell  and 
the  defendant  to  buy  a  Corliss  engine.  The  case  was  heard  at  a 
former  term  (137 — 99)  upon  a  petition  for  a  certiorari.  We  or- 
dered the  writ  to  issue  so  that  the  plaintiff's  exceptions  and  as- 
signments of  error  could  be  more  accurately  stated.  The  judge 
who  tried  the  case  has  made  a  very  full  and  satisfactory  return  to 
the  writ,  and  has  given  the  plaintiff  the  benefit  of  every  exception 
which  could  possibly  be  taken  to  the  rulings  of  the  court.  The 
defect  in  the  original  case  appears  now  to  have  occurred  through 
no  fault  of  the  judge,  who  was  exceedingly  liberal  and  accommo- 
dating towards  counsel,  agreeing  for  their  convenience  to  appoint 
a  place  in  the  district  to  settle  the  case. 

The  defendant  in  its  answer  admitted  that  its  president  had 
signed  a  contract  and  pleaded  specially  that  at  the  time  of  signing 
it,  he  was  so  drunk  that  he  did  not  have  sufficient  mental  capacity 
to  contract  with  the  plaintiff  for  the  engine.  The  court,  without 
objection,  submitted  only  one  issue  to  the  jury,  which  is  as  fol- 
lows: "What  damage,  if  any,  is  the  plaintiff  entitled  to  recover 
of  the  defendant?"  The  jury  answered  "nothing."  Judgment  was 
entered  accordingly. 

The  question  presented  for  our  consideration  arises  upon  an 
exception  to  the  charge  of  the  court  regarding  the  drunkenness  of 
the  plaintiff's  agent  and  its  sufficiency  to  avoid  the  contract.  It  is 
held  by  some  authorities  to  be  a  principle  of  the  common  law  that 
every  contract,  which  a  man  non  compos  mentis  makes,  is  avoid- 


CAPACITY    OF    PARTIES.  273 

able  and  yet  shall  not  be  avoided  by  himself  because  it  is  a  maxim 
in  law  that  no  man  of  full  age  shall  be,  in  any  plea  to  be  pleaded 
by  himself,  received  by  the  law  to  stultify  himself  and  to  set  up 
his  own  disability  in  avoidance  of  his  acts.  Beverly's  Case,  4 
Rep.,  123.  And  Coke,  as  appears  in  his  Institutes,  was  of  the 
same  opinion :  "As  for  a  drunkard  who  is  voluntarius  daemon,  he 
hath  (as  hath  been  said)  no  privilege  thereby,  but  what  hurt  or 
ill  soever  he  doth,  his  drunkenness  doth  aggravate  it."  Co.  Litt., 
247a.  But  Blackstone  observes  that  this  doctrine  sprung  from 
loose  authorities  and  he  evidently  agrees  with  Fitzherbert,  who 
rejects  the  maxim  as  being  contrary  to  reason.  2  Blk.,  291. 
Whatever  was  the  true  principle  of  the  common  law  as  anciently 
understood,  there  can  be  no  doubt  that  since  the  reign  of  Edward 
III,  if  not  since  the  time  of  Edward  I,  it  has  been  settled  accord- 
ing to  the  dictates  of  good  sense  and  common  justice  that  a  con- 
tract made  by  a  person,  so  destitute  of  reason  as  not  to  know  the 
nature  and  consequences  of  his  contract  though  his  incompetence 
be  produced  by  intoxication,  is  void,  and  even  though  this  condi- 
tion was  caused  by  his  voluntary  act  and  not  procured  through  the 
circumvention  of  the  other  party.  Mere  imbecility  of  mind  is  not 
sufficient  as  a  ground  for  violating  the  contract  when  there  is  not 
an  essential  privation  of  the  reasoning  faculties  or  an  incapacity 
of  understanding.  2  Kent,  451.  This  court  has  adopted  Coke's 
definition  that  a  person  has  sufficient  mental  capacity  to  make  a 
contract  if  he  knows  what  he  is  about.  Moffit  v.  Witherspoon,  32 
N.  C,  185;  Paine  v.  Roberts,  82  N.  C,  451.  And  it  has  been 
held  not  error  to  charge  that  the  measure  of  capacity  is  the  ability 
to  understand  the  nature  of  the  act  in  which  he  is  engaged  and  its 
full  extent  and  effect.  Cornelius  v.  Cornelius,  52  N.  C,  593. 
The  doctrine  that  a  party  may  plead  his  own  disability  to  defeat 
the  alleged  contract  arises  out  of  the  very  nature  of  a  contract, 
which  requires  that  the  minds  of  the  parties  should  meet  to  a  com- 
mon intent,  and  if  one  of  them  has  not  "the  agreeing  mind"  the 
contract  can  not  be  formed.  In  Hawkins  v.  Bone,  4  F.  &  F.,  311, 
Chief  Baron  Pollock  said :  "But  the  law  of  England  is  that  a  man 
is  not  liable  on  a  contract  alleged  to  have  been  made  by  him  in  a 
state  in  which  he  was  not  really  capable  of  contracting.  A  con- 
tract involves  a  mutual  agreement  of  two  minds,  and  if  a  man  has 
no  mind  to  agree,  he  can  not  make  a  valid  contract ;"  and  the 
question  at  last  is  whether  he  was  wholly  incapable  of  any  reflec- 
tion or  deliberate  act,  so  that  in  fact  he  was  unconscious  of  the 
nature  of  the  particular  transaction.  It  is  not  necessary  that  he 
should  be  able  to  act  wisely  or  discreetly,  nor  to  effect  a  good  bar- 
gain, but  he  must  at  least  know  what  he  is  doing.  So  far  as  the 
legal  incapacity  is  concerned,  it  can  make  no  difference  from  what 


274  FORMATION    OF    CONTRACT. 

cause  it  proceeded,  whether  from  the  party's  own  imprudence  or 
misconduct,  or  otherwise.  It  is  the  state  and  condition  oi  the  mind 
itself  that  the  law  regards,  and  not  the  causes  that  produced  it. 
If  from  any  cause  his  reason  has  been  dethroned,  his  disability 
to  contract  is  complete.  Bliss  v.  R.  R..  24  \  t.,  424.  The  Master 
of  the  Rolls  |  Sir  William  Grant  |  in  Cook  v.  Clay  worth.  IS  \  esey, 
15.  said:  '"As  to  that  extreme  state  of  intoxication  that  deprives 
a  man  oi  his  reason  1  apprehend  that,  even  at  law.  it  would  inval- 
idate a  deed  obtained  from  him  while  in  that  condition."  Lord 
Ellenborough  in  Pitt  v.  Smith,  3  Camp..  33,  thus  states  the  doc- 
trine: "You  have  alleged  that  there  was  an  agreement  between 
the  parties,  and  this  allegation  you  must  prove,  as  it  is  put  in 
issue  by  the  plea  oi  not  guilty;  hut  there  was  no  agreement  be- 
tween the  parties  if  the  defendant  was  intoxicated  in  the  manner 
supposed  when  he  signed  this  paper.  He  had  not  an  agreeing 
mind.  Intoxication  is  good  evidence  upon  a  plea  ol  non  est  fac- 
tum to  a  deed,  oi  non  concessit  to  a  grant,  and  oi  non  assumpsit 
to  a  promise." 

The  authorities  sustaining  the  view  of  the  law  we  have  stated 
and  adopted  are  quite  numerous.  Clark  on  Cont.  (2d  Ed.),  p. 
186;  Parsons  on  Cont.  (9th  Ed.),  p.  444;  Matthews  v.  Baxter,  1.. 
R.  Exc,  132;  Webster  v.  Woodford,  3  Pay.  °0 :  Van  Wyck  v. 
Brasher.  SI  X.  V..  2(^0:  Barsinger  v.  Bank.  67  Wis..  75;  Rush 
v.  Breinig,  113  Ba.  St..  310;  Bates  v.  Rail.  72  Ilk.  108;  Wright 
v.  Fisher.  65  Mich..  275:  14  Cyc,  1103:  17  A.  &  E.  Enc.  1 2d 
Ed.),  399. 

It  was  held  in  King  v.  Bryant.  3  X.  C.  394,  that  if  a  man  was 
so  drunk  at  the  time  of  signing  a  bond  that  he  did  not  know  what 
he  was  doing:  and  while  in  that  condition  he  was  induced  to  sign 
the  instrument,  it  was  a  fraud  upon  him  which  vitiated  the  bond. 
even  in  an  action  at  law  upon  it,  and  to  the  same  effect  is  the 
decision  of  the  court  in  Gore  v.  Gibson,  13  M.  &  V.  (Exch.),  o2.> 
— opinion  of  Park.  B.  In  the  latter  case.  Pollock,  C.  B..  said : 
"Although  it  was  considered  that  a  man  should  be  liable  upon  a 
contract  made  by  him  when  in  a  state  oi  intoxication,  on  the 
ground  that  he  should  not  be  allowed  to  stultify  himself,  the  weight 
of  the  modern  authorities  is  that  no  contract  made  by  a  person  m 
that  state,  when  he  does  not  know  the  consequences  oi  his  act.  is 
landing  upon  him.  That  doctrine  appears  to  me  to  be  in  accord- 
ance  with   reason   and   justice." 

We  have  examined  the  charge  of  the  court  with  care  and  can 
not  find  that  His  Honor  said  anything  not  in  strict  accordance 
with  the  law,  as  we  now  declare  it  to  be.  He  charged  the  jury  as 
follows:  "The  merq  fact  that  the  defendant's  president  was  drink- 
ing was  not  sufficient,  but  the  jury  must  find  that  he  was  so  intox- 


CAPACITY     OF     PARTIES.  27? 

icated  that  he  could  not  understand  the  nature  and  scope  of  what 
he  was  doing.  If  the  jury  hnd  from  the  greater  weight  of  the  tes- 
timony that  the  agent  was  drinking,  it  would  not  be  sufficient  to  in- 
validate the   contract,   but   if   the   jury   find   that   the   defendant's 

president,  at  the  time  he  signed  the  contract  or  order  for  the  en- 
gine, was  so  drunk  as  to  be  incapable  of  knowing  the  effect  of 
what  he  was  doing,  then  the  contract  or  order  would  not  be  bind- 
ing upon  the  defendant.  Whether  or  not  he  was  so  intoxicated  as 
to  render  him  incompetent  to  contract,  is  a  question  for  the  jury 
upon  all  the  evidence."  We  think  this  was  a  clear  and  sufficient 
exposition  of  the  law  applicable  to  the  facts  of  the  case.  What 
the  judge  said  in  his  reference  to  the  nature  of  the  transaction  in 
which  the  agent  was  engaged  and  its  importance  or  magnitude,  was 
not  calculated  in  our  opinion  to  confuse  the  jury  or  lead  them 
away  from  the  real  question  involved  in  the  issue,  but  was  evi- 
dently intended  to  point  what  he  had  already  said  as  to  the  true 
test  of  mental  capacity,  and  to  impress  upon  them,  as  an  essential 
condition  of  the  validity  of  the  contract,  that  the  agent  oi  the  de- 
fendant at  the  time  he  signed  the  paper  must  have  been  sober 
enough  to  understand  the  nature  of  the  transaction  and  the  effect 
or  consequence  of  his  act,  and  not  that  he  must  have  been  able  to 
act  with  wisdom  or  discretion.  The  particular  transaction,  and 
what  the  party  did  in  respect  to  it.  may  have  furnished  some  evi- 
dence of  his  mental  condition.  The  effect  of  that  part  of  the 
charge  to  which  the  plaintiff  excepted  was  to  leave  the  whole 
transaction,  with  the  evidence  as  to  the  agent's  intoxication  to  the 
jury,  and  in  doing  so  no  reversible  error  was  committed.  His 
Honor  told  the  jury  that  they  must  find  that  the  agent  was  so  in- 
toxicated that  he  did  not  understand  the  nature  and  scope  of  the 
transaction,  and  that  this  was  a  question  for  the  jury  upon  all  of 
the  evidence,  a  part  of  which  necessarily  was  the  transaction  itself, 
whether  in  its  nature  large  or  small.  Even  if  the  illustration,  as 
argued,  was  not  a  very  apt  one.  it  did  no  harm  that  we  can  dis- 
cover. No  error. 

Intoxication  as  a  defense  to  an  action  on  contract.  Morris  v.  i.  lay, 
53 — 216.  If  a  person  intoxicated  makes  a  bad  trade,  it  may  be  ratified 
after  be  becomes  sober,  or  it  may  be  set  aside  for  fraud  and  imposition. 
Moore  v.  Reid.  37 — 580:  Calloway  v.  YVitherspoon.  40 — 128.  The  question 
of  drunkenness  is  generally  considered  under  the  bead  of  fraud.  McLeod 
v.  Billiard.  84 — 515:  Freeman  v.  Dwiggins,  55 — lo2;  Futrell  v.  Futrell. 
59-^337;  Reid  v.  Moore.  25—310:  Hvman  v.  Moore.  48— 41o:  Gregg  v. 
Williams.  12 — 16 :  54  L.  R.  A..  440:  Mordecai's  Lectures.  662:  Burch  v. 
Scott  (N.  C),  84  S.  F..  1035:  Cook  v.  Bagnell  Timber  Co.,  78  Ark..  47. 
8  Ann.  Cas..  254:  Miller  v.  Sterrin°er.  66  S.  F...  228.  25  1..  R  A  I  \"  S.), 
596:  6  R.   C.   I...   597;    Bish.   Eq„   sec.   250. 


276  FORMATION    OP1    CONTRACT. 

Sec.  7.  Married  women. 
1.  At  common  law. 

(113)  KNOX  v.  JORDAN, 

58  N.   C,   175—1859. 

In  1853,  Draper,  Knox  &  Co.,  of  New  York,  sold  goods  to  de- 
fendant, W.  B.  Jordan,  who  gave  a  note  with  his  wife  as  surety, 
as  follows : 

"New  York,  Sept.  22,  1853. — Six  months  after  date  I  promise 
to  pay  to  the  order  of  Draper,  Knox  &  Co.  six  hundred  and 
thirty-five  dollars  and  eighty-five  cents  at  their  office,  value  re- 
ceived.    (Signed)  W.  B.  Jordan  and  Mary  J.  Jordan." 

At  the  time  of  the  execution  of  the  note,  Mary  J.  Jordan  had 
considerable  property  to  her  separate  use  and  benefit,  but  there 
was  no  trustee.  She  signed  the  note  simply  as  surety  and  did  not 
charge  nor  intend  to  charge  it  upon  her  separate  estate.  This  was 
a  bill  in  equity  to  subject  her  separate  property  to  the  payment  of 
the  debt. 

Manly,  J.  The  case  brings  up  again  the  inquiry  how  far  and 
under  what  circumstances  the  separate  estate  of  a  married  woman 
is  liable  for  her  engagements. 

This  subject  has  undergone  much  discussion  and  has  been  vari- 
ously settled  elsewhere ;  but  in  North  Carolina  it  is  still  consid- 
ered an  unsettled  question  in  many  respects. 

No  case  has  yet  gone  to  the  extent  of  sanctioning  the  doctrine, 
that  as  to  the  separate  property,  the  married  woman  is  regarded  as 
a  feme  sole  in  all  respects.  This  seems  to  be  the  English  doctrine 
followed  in  this  country  by  New  York,  but  not  by  any  other  State 
that  we  are  aware  of,  while  Pennsylvania,  Virginia,  South  Caro- 
lina, Tennessee  and  Mississippi  adopt  a  different  rule.  In  the  case 
of  Frazier  v.  Brownlow,  38  N.  C,  237,  it  has  been  decided  by  this 
court  that  a  married  woman  may,  in  an  obligation  which  she  con- 
tracts, specifically  charge  the  same  on  her  separate  property,  where 
it  is  done  with  the  concurrence  of  the  trustee.  And  in  the  case  of 
Harris  v.  Harris,  42  N.  C,  111.  it  is  decided,  where  slaves  are 
bequeathed  to  the  sole  and  separate  use  of  a  married  woman  dur- 
ing her  life  (no  trustee  being  named)  and  then  for  the  use  of  two 
daughters,  and  then  over  to  their  children,  that  a  sale  by  the 
woman,  in  which  her  husband,  the  daughters  and  their  husbands 
joined,  was  good.  Tt  was  not  necessary  to  this  latter  decision  that 
a  different  principle  should  be  resorted  to  than  that  on  which  the 
case  of  Frazier  v.  Brownlow  rests.     The  sale  by  the  parties  might 


CAPACITY    OF    PARTIES.  277 

have  been  upheld  for  the  life  of  the  wife  as  a  charge  upon  the 
profits  only ;  and  in  that  way  the  two  would  have  been  consistent 
and  stood  upon  ground  which  we  think  more  compatible  with  the 
objects  of  such  settlements  and  the  rules  of  the  common  law.  The 
principle  of  the  case  of  Frazier  v.  Brownlow  we  adopt,  because 
we  are  unwilling  to  take  a  step  backward  and  to  unsettle  a  matter 
which  has  been  considered  as  settled  so  long  and  which  has,  wc 
doubt  not,  been  frequently  followed.  But  we  are  at  the  same  time 
unwilling  to  depart  further  from  the  principles  of  the  common  law 
in  relation  to  the  disabilities  of  married  women  and  run  into  the 
labyrinth  of  difficulties  which  allows  the  doctrine  whereby  they 
are  treated  as  femes  sole.  We  prefer  adhering  as  closely  as  may 
be,  consistently  with  decided  cases,  to  the  rule  that  a  separate 
estate  for  the  support  of  a  married  woman  does  not  confer  any 
faculties  upon  her  except  those  which  are  found  in  the  deed  of 
settlement  and  that,  in  all  other  respects,  she  is  a  feme  covert  and 
subject  to  the  usual  disabilities. 

As  we  have  said,  however,  we  recognize,  as  settled  law,  the 
principle  upon  which  the  case  of  Frazier  v.  Brownlow  stands,  viz., 
that  a  wife  may,  when  not  restricted  by  the  deed  of  settlement, 
with  the  concurrence  of  the  trustee,  specifically  charge  her  separate 
estate  with  her  contracts  and  engagements.  She  may  encumber 
expressly,  but  not  by  implication. 

At  common  law  the  legal  existence  of  the  wife  was  for  most 
purposes  merged  in  that  of  the  husband;  she  could  not,  except  in 
special  cases,  contract,  nor  sue,  or  be  sued,  nor  make  any  contract 
in  respect  to  her  separate  estate  that  would,  in  law,  bind  her.  But 
courts  of  equity,  as  a  consequence  of  the  principle  established  by 
them,  that  a  married  woman  may  take  and  enjoy  property  to  her 
separate  use,  enable  her  to  deal  with  it  in  certain  respects  as  a 
feme  sole.  She  may  alien  or  encumber  it  in  execution  of  powers 
conferred  on  her  by  the  terms  of  the  trust,  and  if  not  restricted 
by  the  terms,  may  under  the  authority  of  Frazier  v.  Brownlow 
charge  the  income  or  profits  with  the  payment  of  debts,  or  appro- 
priate them  to  any  selected  object,  provided  such  charge  or  ap- 
propriation be  specific  and  unequivocal  and  concurred  in  as  before 
stated. 

She  is  not  liable  by  reason  of  her  separate  property  to  her  gen- 
eral personal  engagements,  by  holding  such  engagements  a  charge 
by  implication  or  by  any  similar  rule  of  construction. 

We  are  not  sure  this  restricted  view  of  the  powers  and  liabili- 
ties of  married  women  will  adequately  protect  them  from  the 
peculiar  influences  which  act  upon  them,  but  we  are  quite  sure, 
the  other,  of  regarding  them  as  femes  sole  in  respect  to  their  sepa- 


278  formation   of  contract. 

rate    estate,    would    render    such    settlements    in    very    many    cases 
futile  and  vain. 

It  will  be  seen  from  what  has  been  said  that  the  creditors'  bill 
can  not  be  sustained.  This  equity  rests  upon  the  ground  that  the 
separate  estate  of  the  wife  is  responsible  for  her  personal  engage- 
ments generally,  although  not  charged  with  them  specifically.  This 
the  court  does  not  hold.  Bill  dismissed. 

At  common  law  the  contract  of  a  married  woman  was  a  nullity,  but 
with  a  separate  estate  she  had  certain  powers  of  contract,  and  she  could 
hind  her  real  estate  by  joinder  of  her  husband  and  private  examination, 
or  bv  judgment  of  a  court.  Green  v.  Branton,  16 — p.  107;  2  Blk.,  349; 
2  Kent,    150,   162;    Mord.    Lect.,   279. 

2.  Under  the  Constitution  and  statutes. 

(114)   BALL  v.  PAQUIN, 

140  X.  C,  83,  52  S.  E,  410,  3  L.  R.  A.   (N.  S.),  307—1905. 

Civil  action  against  Paul  Paquin  and  wife.  The  feme  defend- 
ant owned  a  lot  in  Asheville,  on  which  she  and  her  husband  built 
a  house  ;  they  contracted  with  the  plaintiff  for  certain  work  in  re- 
gard to  water  and  heating  apparatus ;  the  contract  was  in  writing, 
containing  the  terms  of  the  contract  and  an  agreement  to  pay  upon 
the  proper  completion  of  the  work  ;  the  plaintiffs  also  filed  a  lien 
on  the  premises  for  the  work.  There  was  a  verdict  and  judgment 
for  the  plaintiff,  and  defendants  appealed. 

Connor,  J.  The  feme  defendant  does  not  plead  her  coverture, 
nor  does  it  appear  by  the  answer  that  she  is  covert,  except  that  the 
male  defendant  informs  the  court  that  nothing  can  be  made  out 
of  him  because  he  has  no  interest  in  the  dwelling  house  and  lot, 
save  as  the  husband  of  the  feme  defendant.  He  says,  however, 
that  he  alone  contracted  for  the  work  on  the  house  which  the  writ- 
ten contract  declares  was  being  erected  "by  the  said  Hannah  B. 
Paquin."  How  all  of  this  is  we  do  not  know,  except  as  the  jury 
have   found. 

The  plaintiffs  put  the  contract  of  October  15  in  evidence  by 
which  it  appears  that  they  had  theretofore  furnished  some  mate- 
rial and  done  some  work  for  the  defendants  on  the  dwelling  on  the 
lot  of  the  feme  defendant  "in  the  city  of  Asheville,  on  Haywood 
street,  known  as  the  'Coffin  lot,'  "  being  erected  by  the  said  Han- 
nah B.  Paquin.  The  terms  upon  which  the  balance  of  the  work- 
is  to  be  done  and  material  furnished  are  set  forth,  and  the  defend- 
ants promised  to  pay  promptly  the  amount  due  on  the  contract.  It 
is  signed  by  the  defendants,  acknowledged  by  them,  and  the  pri- 
vate examination  of  the  feme  defendant  taken  and  certified  by  a 
notary    public    in    the   manner   and    form    prescribed    for   executing 


CAPACITY     OF     PARTIES.  279 

deeds  of  conveyance  of  real  estate.  The  jury  have  found  that 
there  is  due  the  plaintiff  for  material  furnished  and  work  done  on 
the  dwelling,  since  the  execution  of  the  contract,  the  sum  of 
$1,337.  In  this  court  the  plaintiffs  were  permitted  to  amend  the 
complaint  to  correspond  with  the  proof. 

The  defendants  contend  that  they  may  have,  use  and  enjoy  the 
labor  and  material  furnished,  by  which  the  dwelling  is  supplied 
with  lavatories,  hot  and  cold  baths,  and  pay  nothing  for  it ;  that 
the  right  to  do  all  of  this  is  secured  to  them  by  the  constitution 
and  laws  of  this  State,  because  the  property  is  the  separate  estate 
of  the  feme  defendant.  If  this  contention  is  correct,  it  woulc 
seem  that  our  Constitution  and  laws  are  sadly  in  need  of  radical 
amendment. 

The   appeal   renders   it   necessary   to   examine  the   statutory   law 
and  decisions  of  this  court  relied  upon  to  sustain  the  defendant's 
exception  to  the  judgment.     It  would  serve  no  good  purpose  to  re- 
view  the   numerous   cases   which   have   been   before   this   court,    in 
which    creditors    have   endeavored    to    collect    debts    from    married 
women.      The   construction   of   the   Constitution   and   laws   has   re- 
ceived the  most   anxious  and  careful  consideration   of   the   judges 
who  have  sat  upon  this  bench.     We  find  that  the  same  effort  has 
been  made  in  England  and  in  many  of  the  States  of  the  Union  to 
break    away    from   the   common   law    conception    of    the    status    of 
married  women,  in  regard  to  their  property  rights  and  contractual 
capacity.      An   interesting  history   of   the   course   of   parliamentary 
and  judicial  thought  and  action  on  the  subject  is  given  by   Profes- 
sor Dicev  in  "Law  and  Opinion  in  England,"  369;  Pomeroy's  Eq., 
sec.   1098,  ct  seq.    (3d  Ed.).     Mr.   Bishop,  vol.   1,  sec.  847,  says: 
"That  since  the  confusion  of  tongues  in  the  Tower  of  Babel,  there 
has  been  nothing  more  noteworthy  in  the  same  time  than  the  dis- 
cordant and  ever  shifting  utterances  of  the  judicial   mind  on  the 
subject."     Flaum   v.   Wallace,   103   N.   C,  306.      It   is  but   natural 
and  not  to  be  regretted  that  under  our  system  of  jurisprudence,  in 
which,  by  the  operation  of  three  agencies,  legal  fiction,  equity  and 
legislation,  the  law  is  brought  into  harmony  with   society    (  Maine 
Anc.  Law),  the  movement  is  slow  and  at  times  unsatisfactory.    In 
no  court  in  this  country  was  the  common   law  conception  of  the 
marital   relation,  with   all   of   its  incidents,  more  clearly  and  tena- 
ciouslv  retained  than   in   ours.      Prior  to   1848  we   find   no   statute 
interfering  with  'or  limiting  the  common  law   right   and  power  of 
the  husband  over  his  wife's  property.    In  respect. to  dower,  the  law 
was  so  changed  that  the  husband  could  sell  his  land  without  her 
consent   and   deprive  her   of   "her   third."      This   was   changed   by 
Act  of   1866-67  and   dower  as  at  common   law  restored. 

It  is  therefore  not  unnatural  that   when  by  the  Constitution  of 


280  FORMATION    OF    CONTRACT. 

1868,  an  entirely  new  theory  was  adopted  by  which  it  is  declared 
that  "the  real  and  personal  property  of  any  female  in  this  State 
acquired  before  marriage,  and  all  property,  real  and  personal,  to 
which  she  may  after  marriage  become  in  any  manner  entitled, 
shall  be  and  remain  the  sole  and  separate  estate  and  property  of 
such  female,"  etc.  (Const.,  Art.  X,  sec.  6),  the  court  should  have 
moved  with  caution  in  giving  it  operation. 

It  would  seem  that  this  language  carries  with  it,  as  an  essen- 
tial attribute  of  ownership  of  the  wife,  the  power  to  deal  with 
and  make  contracts  in  regard  to  such  property,  except  as  expressly 
restricted  by  the  same  instrument,  as  a  feme  sole.  This  was 
clearly  intimated  in  Withers  v.  Sparrow,  66  N.  C,  129.  That  ex- 
pression was  doubtless  taken  as  an  indication  that  this  court  would 
so  hold,  when  the  question  was  fairly  presented.  At  the  session 
of  1868-69  we  find  no  legislation  upon  the  subject  of  married 
women.  The  effect  of  the  holding,  as  foreshadowed  in  Withers 
v.  Sparrow,  supra,  would  have  been  to  adopt  the  English  and  New 
York  doctrine,  by  which  a  married  woman  could  contract  with 
respect  to  her  separate  estate  as  a  feme  sole.  At  the  session  of 
1871-72,  chapter  193,  an  act  was  passed  "concerning  marriage, 
marriage  settlements  and  the  contracts  of  married  women."  The 
act  is  comprehensive  in  its  scope  and  evidently  drawn  with  care. 
The  subject-matter,  as  published  in  the  Public  Laws  of  1871-72, 
is  classified  under  "headings,"  the  third  being,  "What  contracts  a 
married  woman  may  make  with  strangers."  Section  17  (being 
section  1826  of  The  Code).  "No  woman  during  her  coverture 
shall  be  capable  of  making  any  contract  to  affect  her  real  or  per- 
sonal estate,  except  for  her  necessary  personal  expenses  or  the 
support  of  her  family,  or  such  as  may  be  necessary  in  order  to 
pay  her  debts  existing  before  marriage,  without  the  written  con- 
sent of  her  husband,  unless  she  be  a  free-trader  as  hereinafter  al- 
lowed." It  would  seem  that  the  Legislature  enacted  this  statute 
with  full  recognition  of  the  radical  change  made  by  the  Constitu- 
tion, and  the  clear  suggestion  by  the  court  that  the  power  to  con- 
tract, as  a  feme  sole,  was  conferred  as  a  necessary  incident  to  the 
power  to  own  property  "as  if  unmarried."  It  was  not  supposed 
that  the  words  "devise"  and  "with  the  written  consent  of  the 
husband  convey,"  used  in  the  Constitution,  referred  to  her  power 
to  enter  into  executory  contracts.  For  the  purpose  of  throwing 
around  her  the  protection  of  her  husband's  counsel  and  advice,- 
the  Legislature  declared  that,  with  certain  exceptions,  she  should 
not  contract  "without  the  written  consent  of  her  husband."  In 
the  absence  of  controlling  decisions  to  the  contrary,  we  should 
unanimously  hold  that  she  could  make  all  manner  of  contracts 
with  the  written  assent  of   her  husband,   and  that   for  breach   of 


CAPACITY    OF    PARTIES.  281 

them  her  property  was  liable  as  if  she  were  a  feme  sole.  The 
cases  which  came  to  this  court  during  the  years  1868-1876  clearly 
indicate  that  such  was  the  construction  of  the  statute  by  the  pro- 
fession and  laymen. 

The  first  case  is  Harris  v.  Jenkins,  72  N.  C,  183  (1875).  The 
feme  plaintiff  signed  a  sheriff's  bond  as  security  without  the  writ- 
ten assent  of  her  husband.  This  case  came  clearly  within  the 
words  of  the  Act  of  1871-72,  and  the  court  did  not  hesitate  to 
hold  that  she  was  not  bound. 

Pippen  v.  Wesson,  74  N.  C,  437  (1876),  presented  the  ques- 
tion for  the  first  time,  whether  under  the  Constitution  and  the 
Act  of  1871-72  a  married  woman  could,  with  the  written  assent 
of  her  husband,  enter  into  an  executory  contract  for  breach  of 
which  she  could  be  sued  to  judgment,  and  her  property  subjected 
to  sale  under  final  process.  It  will  be  noted  that  the  statute  uses 
the  word  "contract."  There  is  no  suggestion  therein  of  any  other 
form  of  obligation  or  remedy  for  breach  thereof.  This  court  held 
that  no  power  to  enter  into  an  executory  contract  was  conferred 
by  the  Constitution  or  statute  on  a  married  woman ;  that  the  only 
change  made  in  her  contractual  capacity  was  that  her  separate 
estate,  formerly  called  her  equitable  separate  estate  and  property 
secured  by  the  intervention  of  a  trustee,  was  by  the  Constitution 
made  her  statutory  separate  estate,  her  husband  occupying  the 
position  of  trustee ;  that  the  only  way  in  which  such  separate 
estate  or  property  could  be  subjected  to  her  engagements,  even 
with  the  written  assent  of  her  husband,  was  by  a  specific  charge 
or  by  showing  a  beneficial  consideration ;  and  that  thereby  her  sep- 
arate estate  was  charged  with  her  obligations,  not  upon  the  theory 
that  she  had  contracted  a  debt,  but  that  her  engagement,  thus 
made,  constituted  a  charge  which  the  courts  of  equity  had  there- 
tofore enforced. 

It  is  not  our  purpose  to  do  more  than  to  say  that  this  decision 
was  based  upon  the  view  that  neither  the  Constitution  nor  the 
statute  enlarged  her  common  law  contractual  capacity,  and  that 
the  statute  was  disabling  rather  than  enabling  in  its  provisions, 
except  as  to  the  class  specified.  Whatever,  in  the  light  of  thought 
and  experience  of  thirty  years,  may  be  said  of  this  decision,  it 
became  the  accepted  law  of  this  State,  and  its  fundamental  prin- 
ciple with  some  modifications,  has  been  followed.  A  number  of 
important  and  disturbing  results  have  flowed  from  it.  A  constant 
struggle  has  been  going  on  to  find  some  adjustment  of  the  law  to 
the  inevitable  result  of  the  radical  change  made  by  the  Constitu- 
tion. Married  women  today  are  the  owners  of  property,  both  real 
and  personal,  worth  millions  of  dollars.  They  employ  tenants 
and  croppers  and  cultivate  thousands  of  farms,  engage  in  merchan- 


282  FORMATION    OF    CONTRACT. 

dise,  conduct  hotels,  boarding  houses  and  almost  every  kind  of 
business  suited  and  sometimes  unsuited  to  their  mental  and  physi- 
cal capacity.  The  largest  possible  powers  have  been  conferred 
upon  them  in  respect  to  the  control  of  their  property,  as  in  Man- 
ning v.  Manning,  79  N.  C,  293,  and  many  other  cases.  It  has 
been  found  by  an  experience  of  thirty  years  that  the  most  unex- 
pected and  often  startling  results  have  come  from  this  condition. 
As  a  matter  of  everyday  experience,  we  know  that  a  very  large 
portion  of  the  industrial  and  commercial  life  of  the  State  is  under 
the  control  and  subject  to  their  judgment  and  opinion.  It  is  pos- 
sible that  nine-tenths  of  the  contracts  entered  into  by  them  are 
not  enforceable  in  the  courts. 

In  Harvey  v.  Johnson,  133  N.  C,  352,  upon  a  review  of,  and 
in  accordance  with  all  former  decisions,  this  court  held  that  a 
note  executed  by  husband  and  wife,  charging  her  separate  estate, 
is  sufficient  to  bind  her  separate  personal  property ;  that  in  the 
absence  of  a  privy  examination  it  did  not  bind  her  separate  real 
estate.  In  that  case  it  appeared  that  the  consideration  inured  to 
the  benefit  of  her  estate. 

In  Flaum  v.  Wallace,  supra,  such  a  note  was  held  binding  on 
her  separate  personal  estate,  although  not  for  her  benefit.  This 
court  took  one  step  forward  in  the  enfranchisement  of  married 
women  by  holding,  in  a  well-considered  opinion,  in  Vann  v.  Ed- 
wards, 135  N.  C,  661,  that  the  restriction  upon  her  right  to  con- 
vey her  land,  requiring  the  written  assent  of  her  husband,  did 
not  apply  to  her  separate  personal  estate ;  hence,  it  is  now  the  law 
of  this  State  that  she  can  sell  and  transfer  her  personal  property 
as  a  feme  sole. 

It  is  unnecessary  to  make  further  reference  to  the  numerous  de- 
cisions of  the  court  in  which  her  power  to  deal  with  her  separate 
personal  estate  is  discussed.  Flaum  v.  Wallace  and  Vann  v.  Ed- 
wards, supra,  settle  her  rights  in  this  respect. 

It  is  said,  however,  that  a  different  principle  obtains  when  it  is 
sought  to  subject  her  separate  real  estate  to  her  contractual  obli- 
gations. While  expressions  had  been  used  by  some  of  the  judges 
indicating  an  opinion  that  she  could  do  so  only  by  a  contract  exe- 
cuted with  the  formalities  prescribed  for  the  conveyance  of  her 
land,  no  decision  was  made  to  that  effect  until  1890,  when  the 
question  underwent  a  careful  and  thorough  consideration  in  Far- 
thing v.  Shields,  106  N.  C,  289.  There  Mr.  Justice  Shepherd. 
referring  to  Flaum  v.  Wallace,  said:  "We  were  greatly  influenced 
in  so  holding  because  of  the  power  of  the  wife  to  absolutely  dis- 
pose of  her  statutory  separate  personal  estate  by  the  simple  assent 
of  her  husband,  and  we  deemed  it  but  reasonable  that  if  she  could 
so  absolutely  dispose  of  such  property,  she  might  exercise  the  lesser 


CAPACITY     OF     PARTIES.  283 

power  of  charging  it,  either  expressly  or  hy  necessary  implication. 
But  when  we  come  to  the  statutory  separate  real  estate,  the  fore- 
going reason  fails,  hecause  under  our  statute  law,  the  wife  and 
husband  can  not  dispose  of  such  property  unless  the  former  has 
been  privately  examined,  separate  and  apart  from  her  husband." 
The  learned  justice  concludes  that  the  power  to  charge  her  sep- 
arate estate  is  measured  by  her  power  to  dispose  of  the  same; 
hence,  if  she  expressly  charged  the  debt  in  that  case  with  the 
written  assent  of  her  husband,  "it  would  have  been  of  no  avail 
without  privy  examination."  In  further  discussing  the  law  he 
says  that  the  lands  of  a  married  woman  can  not  be  charged  by 
any  undertaking  on  her  part  "unless  it  be  evidenced  by  deed  with 
privy  examination."  This,  for  the  reason  that  she  will  not  be 
permitted  to  do  indirectly  what  she  can  not  do  directly.  Scott  v. 
Battle,  85  X.  C,  184.  Similar  expressions  are  used  in  Thurber 
v.  LaRoque.  105  N.  C.  301;  Williams  v.  Walker,  111  X.  C,  604; 
Loan  Asso.  v.  Bank,  119  X.  C,  327;  Bank  v.  Fries,  121  X.  C. 
241.  In  Weathers  v.  Borders,  121  X.  C,  387,  the  contract  was 
not  in  writing  and  of  course  there  was  no  privy  examination. 
The  expression  that  she  could  only  charge  her  real  estate  by  "a 
regular  conveyance  executed  as  required  by  the  statute,"  etc.,  was 
not  necessary  to  the  decision  of  the  case  and,  as  we  have  seen,  is 
not  required  by  any  decision  of  this  court.  When  the  question 
came  directly  before  the  court,  it  was  said  that  the  cases  did  not 
hold  it  to  be  necessary  that  a  mortgage  should  be  executed.  Bank 
v.   Ireland,   122  X.  C,  571. 

It  will  be  found  in  all  these  cases  that  the  question  whether  it 
was  necessary  that  the  form  of  the  contract  should  be  a  convey- 
ance, was  not  presented.  It  is  evident  that  the  judges  were  refer- 
ring to  the  formalities  with  which  such  contracts  should  be  exe- 
cuted. In  Bank  v.  Howell,  118  X.  C,  271,  it  is  said  that  she 
can  not  charge  her  separate  real  estate  "except  upon  privy  exam- 
ination." In  Bank  v.  Ireland,  122  N.  C,  571,  the  present  Chief 
Justice,  writing  in  that  respect  for  a  unanimous  court,  referring 
to  Farthing  v.  Shields,  supra,  and  other  cases,  said:  "Those  de- 
cisions do  not  require  that  the  charge  shall  be  made  by  mortgage." 
In  so  far  as  it  was  intimated  that  no  privy  examination  was  nec- 
essary, the  then  chief  justice  and  other  justices  did  not  concur. 

The  conclusion  is  irresistible  that  where  the  contract  has  all 
the  elements  required  by  the  statute  and  is  reduced  to  writing,  as- 
sented to  by  the  husband,  and  the  wife  is  privately  examined  sep- 
arate and  apart  from  her  husband,  it  is  binding  upon  her  separate 
real  estate.  In  this  record  we  have  such  a  contract,  executed  with 
all  the  formalities  required  for  conveying  the  property,  describing 
it  with  sufficient  certainty  to  convev,  the  consideration  clearly  set 


284  FORMATION    OF    CONTRACT. 

forth,  admittedly  for  the  improvement  of  her  separate  real  estate. 
Why  is  such  estate  not  bound  for  the  breach  of  her  express  con- 
tract, by  necessary  implication?  It  is  true  that  she  does  not  ex- 
pressly charge  it  upon  either  real  or  personal  estate,  but  she  refers 
to  her  separate  real  estate,  describing  it  as  her  property,  and  stat- 
ing that  she  is  erecting  a  dwelling  thereon,  and  that  the  work  and 
material  contracted  for  are  for  such  dwelling.  Language  not  so 
strong  was  held  in  Bates  v.  Sultan,  117  N.  C,  94,  sufficient  to 
charge  her  personal  estate.     Brinkley  v.  Ballance,  126  N.  C,  393. 

The  decisions,  while  not  in  all  respects  harmonious,  indicate  a 
movement  of  the  court  towards  bringing  the  law  in  this  respect 
into  harmony  with  our  social,  industrial  and  commercial  condi- 
tions. The  Legislature  has  to  some  extent  responded  to  this  de- 
mand. In  so  far  as  it  is  within  our  province  to  do  so,  we  desire 
to  express  our  opinion  that  it  is  desirable  that  the  Legislature  sim- 
plify the  subject  by  giving  to  married  women  full  power  to  enter 
into  executory  contracts,  binding  their  property,  real  and  personal, 
"as  if  unmarried" — removing  all  doubt  and  uncertainty  either  as 
to  the  form  of  the  contract,  its  execution,  or  remedy  for  breach. 

How  far  they  should  be  restricted  or  protected  by  requiring  the 
assent  of  the  husband  is  worthy  of  the  most  careful  consideration. 
It  is  manifest  that  the  court,  in  its  desire  to  so  construe  the  statute 
as  to  prevent  injustice  and  wrong,  has  been  hampered  by  the  early 
decisions  made  when  we  were  passing  from  the  old  into  the  new 
conception  of  the  status  of  married  women,  in  respect  to  their 
rights  of  property  and  power  to  contract.  The  wisdom  of  the  ex- 
periment was  seriously  doubted  by  many  of  our  wisest  men,  both 
lawyers  and  laymen.  It  was  probably  well,  when  confronted  with 
two  cases  in  which  married  women  had  signed  bonds  as  security, 
that  the  court  should  move  cautiously. 

We  do  not  feel  at  liberty,  nor  is  it  necessary  in  this  case,  to 
overrule  any  of  the  decisions  made  in  this  court  upon  this  subject. 
This,  with  the  exception  of  Bank  v.  Ireland,  supra,  is  the  first  case 
in  which  an  executory  contract  was  executed  by  the  wife  with 
privy  examination.  She  was  held  liable  there,  because  there  was 
an  express  charge.  In  this  case,  in  which  the  contract  is  executed 
with  privy  examination,  we  hold  that  she  is  liable  upon  an  implied 
charge  upon  the  separate  real  estate.  We  have  not  overlooked 
Dougherty  v.  Sprinkle,  88  N.  C,  300,  nor  Thompson  v.  Taylor, 
110  N.  C,  70.  In  neither  of  these  cases  was  there  an  express 
contract  by  the  married  woman. 

We  are  of  opinion,  and  so  hold,  that  upon  the  pleadings  and  con- 
tract. His  Honor  correctly  held  that  the  separate  real  estate  of  the 
feme  defendant  was  bound  for  the  amount  found  to  be  due  by  the 
jury.     The  plaintiffs  are  entitled  to  enforce  their  lien  on  her  prop- 


CAPACITY  OF  PARTIES.  285 

erty.  This  court  in  Thompson  v.  Taylor,  supra,  said  that  the  lien, 
given  by  the  Constitution  and  statute  for  work  and  labor  done  and 
material  furnished,  was  predicated  upon  a  valid  contract,  and,  as  a 
married  women  had  no  capacity  to  make  such  a  contract,  her  prop- 
erty could  not  be  subjected  to  such  lien.  This  was  not  the  point 
in  the  case.  The  feme  covert  had  not  made  any  contract,  either 
express  or  implied.  In  Smaw  v.  Cohen,  95  N.  C,  85,  it  was  held 
that  an  action  against  a  married  woman  to  enforce  a  lien  for  an 
amount  less  than  $200  with  within  the  jurisdiction  of  a  justice  of 
the  peace.  This  court,  as  we  construe  the  opinion,  did  not  pass 
upon  the  validity  of  the  contract.  Mr.  Justice  Shepherd,  in  Far- 
thing v.  Shields,  supra,  intimated  that  the  lien  could  be  enforced 
upon  a  simple  contract  by  the  married  woman  because  of  the  lien 
law.  However  this  may  be,  we  are  of  opinion  that  by  construing 
section  6  in  connection  with  section  3  of  Article  X  of  the  Consti- 
tution, and  section  1826  in  connection  with  1781  of  The  Code,  the 
conclusion  is  sustained  that  for  all  debts  contracted  for  work  and 
labor  done,  a  lien  is  given  upon  the  property  of  a  married  woman. 

It  is  true  that  the  lien  is  given  for  the  amount  due  upon  the 
debts  contracted.  In  this  connection  it  is  permissible  to  give  the 
term  "contracted"  the  larger  meaning — agreed  to  be  paid — thereby 
giving  a  highly  remedial  statute  an  operation  commensurate  with 
its  purpose.  The  provisions  for  the  mechanic's  and  laborer's  lien 
and  for  securing  to  the  married  woman  her  property  are  found  in 
the  same  article  of  the  Constitution.  In  this  case,  the  principle 
noscitur  a  sociis  is  invoked  to  ascertain  the  intention  of  the  law 
maker.  Sutherland  Const.  Sta.,  sec.  414,  et  seq.  It  has  been  held 
by  many  courts  that  when  a  married  woman  was  empowered  to 
contract  for  the  benefit  of  her  separate  estate,  the  lien  for  debts 
contracted  for  that  purpose  attaches.  Boisot  Mech.  Liens,  sec. 
271  ;  Philips  on  Mechanics'  Liens,  sec.  96 ;  Carthage  M.  &  W.  Co. 
v.  Baumann,  44  Mo.  App.,  386.  In  Stephenson  v.  Ballard,  82 
Ind.,  87,  it  is  held  that  a  statute  forbidding  a  married  woman  to 
encumber  her  separate  estate,  except  by  deed  with  her  husband, 
must  be  so  construed  in  connection  with  another  statute  giving  a 
mechanic's  lien  as  to  give  effect  to  the  latter.  Greenough  v.  Wig- 
ginton,  11  Iowa,  435;  Appeal  Germania  Savings  Bank,  95  Pa.  St., 
329;  Kuhas  v.  Turney,  87  Pa.  St.,  497.  However  this  may  be, 
the  Act  of  1901,  chapter  617,  expressly  extends  the  lien  law  to  the 
property  of  married  women.  It  has  been  sustained  in  Finger  v. 
Hunter,  130  N.  C,  529. 

We  think  that  in  the  light  of  the  authorities  and  upon  the  reason 
of  the  thing,  the  judgment  can  be  sustained  upon  either  view,  that 
under  the  Act  of  1871-72   (Code,  sec.  1826),  the  feme  defendant 


286  FORMATION    OF    CONTRACT. 

is  liable,  and  that  upon  a  proper  construction  of  the  lien  law,  she 
is  equally  so. 

We  have  examined  the  exceptions  in  the  record  to  rulings  of 
His  Honor  during  the  trial  and  do  not  hnd  any  error.  We  have 
taken  this  case  under  advisement  from  the  last  term  and  given  to 
it  our  most  serious  consideration.  We  hope  that  the  subject  of  the 
powers  and  rights  of  married  women  in  respect  to  their  property 
and  contracts  may  attract  the  attention  of  the  General  Assembly 
and  be  brought  into  harmony  with  the  best  modern  thought  and 
conditions.     The  judgment  must  be  Affirmed. 

(115)  REA  v.  REA, 
156   X.   C,   529,   72   S.   E.,   573-1911. 

Clark,  C.  J.  On  6  April,  1908,  the  plaintiff,  who  owned  46 
shares  of  stock  in  the  Edenton  Cotton  Mills,  delivered  same  to  C. 
W.  Rea,  her  husband  having  indorsed  on  the  certificate  as  follows : 

For  value  received,  I  hereby  sell,  assign,  and  transfer  unto  C. 
W.  Rea  the  shares  of  stock  represented  by  the  within  certificate, 
and  do  hereby  irrevocably  constitute  and  appoint  W.  O.  Elliott, 
secretary,  attorney  to  transfer  the  said  stock  on  the  books  of  the 
within  corporation,  with  full  power  of  substitution  in  the  premises. 

April  6,  1908.  Martha  C.  Rea. 

In  the  presence  of  C.  W.  Rea. 

On  8  April,  1908,  said  C.  W.  Rea  surrendered  said  certificate 
to  said  cotton  mill  and  the  same  number  of  shares  were  issued  to 
him.  C.  W.  Rea  died  in  1909  and  the  certificate  of  stock  which 
had  been  issued  to  him  went  into  the  hands  of  his  administrator. 
The  plaintiff  contends  in  this  action  that  said  assignment,  delivery, 
and  transfer  of  said  stock  by  her  was  a  nullity  because  of  non- 
compliance with  Revisal,  2107. 

There  is  a  broad  distinction  between  conveyances  and  contracts. 
Revisal,  2107,  applies  only  to  contracts.  Laws  of  1911,  ch.  109, 
provides:  "Subject  to  the  provisions  of  section  2107,  Revisal 
1905,  every  married  woman  shall  be  authorized  to  contract  and 
deal  so  as  to  affect  her  real  and  personal  property  in  the  same 
manner  and  with  the  same  effect  as  if  she  were  unmarried;  but 
no  conveyance  of  her  real  estate  shall  be  valid  unless  made  with 
the  written  assent  of  her  husband,  provided  by  section  6,  Article 
X  of  the  Constitution,  and  a  privy  examination  as  to  the  execu- 
tion of  the  same,  taken  and  certified  as  required  by  law."  This 
recognizes  that  section  2107  applies  to  contracts,  and  that  the  only 
restriction  upon  conveyances  by  her  is  that  constitutional  one  re- 
quiring the  "written  assent"  of  her  husband  as  to  conveyances  of 
realtv  and  her  privy  examination  in  such  case. 


CAPACITY    OF     PARTIES.  287 

Revisal,  2107,  is  equally  explicit.  It  comes  under  subhead  3, 
entitled  "contracts  between  husband  and  wife,"  and  provides:  'No 
contract  between  a  husband  and  wife  during  coverture  shall  be 
valid  to  affect  or  change  any  part  of  the  real  estate  of  the  wife 
or  the  accruing  income  thereof,  for  longer  time  than  three  years 
next  ensuing  the  making  of  such  contracts,  or  to  impair  or  change 
the  body  or  capital  of  the  personal  estate  of  the  wife,  or  of  the 
accruing  income  thereof,  for  longer  time  than  three  years  next 
ensuing  the  making  of  such  contracts,  unless  such  contract  shall 
be  in  writing,  and  be  duly  proved  as  is  required  for  conveyances 
of  land;  and  upon  the  examination  of  the  wife  separate  and  apart 
from  her  husband,  as  is  now  or  may  hereafter  be  required  In- 
law in  the  probate  of  deeds  of  femes  covert,  it  shall  appear  to 
the  satisfaction  of  such  officer  that  the  wife  freely  executed  such 
contract,  and  freely  consented  thereto  at  the  time  of  her  separate 
examination,  and  that  the  same  is  not  unreasonable  or  injurious 
to  her.  The  certificate  of  the  officer  shall  state  his  conclusions, 
and  shall  be  conclusive  of  the  facts  therein  stated.  But  the  same 
may  be  impeached  for  fraud  as  other  judgments  may  be." 

An  examination  of  section  2107  shows  that  it  applies  solely  to 
contracts  and  not  to  conveyances  ;  indeed,  the  word  "contract"  is 
used  five  times  in  that  section.  The  object  of  the  Legislature  was 
clearly  to  prevent  the  wife  making  any  contract  with  her  husband 
whereby  she  should  incur  a  liability  against  her  estate  which  in 
future  might  prove  a  burden  or  charge  upon  it,  or  cause  a  change 
or  impairment  of  her  income  or  personalty.  To  that  end  not  only 
a  privy  examination  was  required,  but  the  certificate  of  a  magis- 
trate that  the  contract  is  not  unreasonable  or  injurious  to  her. 
This  provision  does  not  attempt  to  apply  to  conveyances  by  her 
as  to  which  the  Act  of  1911  retains  the  constitutional  restriction 
in  regard  to  realty,  that  there  must  be  the  written  assent  of  the 
husband  and  privy  examination.  Had  the  act  attempted  to  im- 
pose a  further  restriction  upon  the  conveyance  of  married  women 
of  realty,  such  as  the  approval  of  a  third  person,  it  would  be  in 
conflict  with  the  Constitution,  which  gives  her  the  power  to  con- 
vey her  realtv,  if  she  has  "the  written  assent  of  her  husband."' 

The  majority  of  this  court  has  sustained  the  statutory  require- 
ment of  a  privy  examination  in  conveyances  of  realty  by  married 
women,  but  solely  upon  the  ground  that  it  is  not  an  additional 
restriction,  but  merely  a  regulation  to  ascertain  whether  the  wife 
really  executed  the  deed. 

As  to  conveyances  by  the  wife  of  her  personalty,  the  Constitu- 
tion gives  her  full  power  of  jus  disponendi,  without  any  restric- 
tion whatever.  Nor  is  there  any  statute  whatever  that  in  any  way 
has  attempted  to   restrict   it.     This  matter  has  been    fully  consid- 


288  FORMATION    OF    CONTRACT. 

ered  and  settled  by  this  court  in  a  remarkably  well-considered  and 
able  opinion  by  Mr.  Justice  Walker  in  Vann  v.  Edwards,  135  N. 
C,  661,  which  leaves  nothing  to  be  added.  That  case  overruled 
Walton  v.  Bristol,  125  N.  C,  419,  so  far  as  it  could  be  construed 
to  intimate  a  different  conclusion.  In  Sydnor  v.  Boyd,  119  N.  C, 
481,  the  wife  attempted  to  assign  her  life  insurance  policy  to  her 
husband  so  as  to  make  it  payable  to  him  at  her  death,  and  guar- 
anteed "the  validity  and  sufficiency  of  the  foregoing  assignment." 
This  was  an  executory  contract  which  would  have  changed  or 
diminished  the  corpus  of  her  estate  at  her  death,  and  she  would 
have  incurred  liability  upon  her  guarantee.  The  court  held  that 
this  was  a  contract,  and  invalid  because  not  made  in  compliance 
with  the  Code,  1835   (now  Revisal,  2107). 

If  Revisal,  2107,  had  included  conveyances,  it  would  have  been 
invalid  as  to  the  transfers  by  a  married  woman  of  her  personalty, 
because  the  Constitution  gives  her  as  to  them  the  absolute  jus  dis- 
ponendi,  as  if  feme  sole,  without  any  restriction  whatever.  It 
would  have  been  invalid  as  to  conveyances  of  realty,  because  re- 
quiring the  assent  of  a  third  person  over  and  above  the  "written 
assent"  of  her  husband,  which  is  the  only  requirement  of  the  Con- 
stitution, and  an  addition  to  the  privy  examination  required  by 
statute,  which  has  been  held  a  mere  regulation  and  not  a  restric- 
tion upon  the  right  of  the  woman  to  convey.  In  this  case  the  hus- 
band actually  witnessed  the  transfer  in  writing,  which,  under  the 
authority  of  Jennings  v.  Hinton,  126  N.  C,  51,  is  a  sufficient  com- 
pliance with  the  requirement  of  the  written  assent  of  the  husband 
to  conveyance  of  realty. 

In  this  case  there  does  not  appear  to  have  been  any  considera- 
tion, and  the  assignment  was  not  only  a  conveyance,  but  a  gift. 
No  magistrate  could  certify  that  a  gift  by  a  woman  to  her  hus- 
band is  for  her  benefit  or  does  not  diminish  her  estate.  It  would 
be  a  startling  proposition  that  a  married  woman  who  by  our  Con- 
stitution has  full  control  of  her  property,  as  if  unmarried,  can  not 
make  a  present  to  her  husband  if  she  sees  fit.  It  is  a  matter  of 
everyday  occurrence.  Whether  she  make  her  husband  a  gift  of 
money,  a  dressing  gown,  or  a  pair  of  slippers,  it  would  be  aston- 
ishing if  she  could  recover  it  from  his  administrator,  or  from  him 
if  there  should  be  a  divorce.  Of  course,  if  the  conveyance  or  gift 
by  her  has  been  procured  by  fraud  or  duress,  it  can  be  impeached 
just  as  if  made  to  anyone  else. 

Summing  up,  the  rights  of  married  women  in  North  Carolina 
as  to  conveyances  and  contracts  are : 

As  to  conveyances  of  personalty :  There  is  no  restriction  what- 
ever upon  her  right  to  dispose  of  her  personalty  as  fully  and 
freely  as  if  she  had  remained  unmarried,  either  in  the  Constitu- 


CAPACITY     OF     PARTIES.  289 

tion  or  by  any  statute.  Vann  v.  Edwards,  135  N.  C,  661,  cited 
with  approval  by  Justice  Connor  in  Ball  v.  Paquin,  140  N.  C,  91, 

As  to  conveyances  of  realty :  The  Constitution  requires  only 
"the  written  assent"  of  the  husband.  The  statute  superadds  only 
a  regulation  providing  for  a  privy  examination,  which  has  been 
upheld  on  the  ground  that  it  is  not  an  additional  requirement,  but 
merely  a  method  of  ascertaining  if  the  deed  is  really  her  volun- 
tary act. 

As  to  contracts:  Laws  1911,  ch.  109,  provides  that  a  married 
woman  is  authorized  to  contract  and  to  affect  her  real  and  per- 
sonal property  thereby  in  the  same  manner  and  to  the  same  effect 
as  if  she  were  unmarried,  excepting  only  contracts  whereby  she 
may  incur  liability  to  her  husband,  as  to  which  the  provisions  of 
Revisal,  2107,  are  retained. 

The  conveyance  of  the  stock  by  the  wife  was  not  restricted  by 
the  Constitution  or  any  statute.  If  reversing  Vann  v.  Edwards. 
135  N.  C,  661,  it  were  now  held  otherwise,  the  cotton  mills  could 
be  held  liable,  and  every  bank,  railroad  company,  and  other  cor- 
poration which  has  transferred  stock  in  like  cases  to  this.  Wooten 
v.  R.  R.,  128  N.  C,  119.  While  the  Legislature  has  seen  fit  to 
guard  contracts  whereby  a  wife  may  incur  liability  to  her  hus- 
band, it  has  not  attempted  to  restrict  her  right  of  conveyance,  still 
less  to  forbid  gifts  by  her  to  her  husband  without  the  approval  of 
a  Justice  of  the  Peace. 

Upon  the  case  agreed,  judgment  should  have  been  entered  in 
favor  of  the  defendant.  Reversed. 

Since  the  act  of  1911,  given  in  the  last  case,  the  law  of  married  women's 
contracts  has  been  materially  changed.  The  former  law  has  been  thor- 
oughly treated  in  Mordecai's  Lectures,  297-364,  and  an  analysis  of  the  old 
law  by  Prof.  Mordecai  may  be  found  in  Vann  v.  Edwards,  128 — p.  431,  and 
in  Pell's  Revisal,  2094.  The  following  summary  will  give  most  of  the 
important  questions   that  have  arisen,   and   indicate  the   changes   made : 

1.  The  common  law  disability  of  married  women  still  exists,  ex- 
cept as  modified  by  statute.  Armstrong  v.  Best,  112 — 59;  State  v.  Rob- 
inson.   143—620;   Dougherty   v.    Sprinkle,   88—300. 

2.  She  may  contract  as  a  feme  sole — 

(a)  Where  she  is  a  free-trader. — (1)  By  registration,  Revisal,  2112; 
Council  v.  Ferguson,  153 — 443,  explaining  "free-trader"  and  "deal".  (2) 
By  living  separate  from  her  husband  under  a  decree  of  divorce,  Revisal. 
2116:  Taylor  v.  Taylor.  93 — 418;  (3)  Under  a  deed  of  separation,  Re- 
visal, 2116;  Smith  v.  King,  107 — 273;  (4)  Where  husband  is  declared  a 
lunatic,  Revisal,  2116:  (5)  When  abandoned  by  her  husband,  Revisal.  2117; 
Hall  v.  Walker.  118—377;  Vandiford  v.  Humphrey,  139—65;  Witty  v. 
Barham,  147 — 479;  (6)  Where  the  husband  is  an  alien  and  out  of  the 
country.  Levi  v.  Marsha,  122 — 565:  (7)  Where  trading  as  "company"  or 
"agent"  and  partners  or  principal  not  disclosed,  Revisal,  2118;  Scott-Sparger 
Co.  v.  Ferguson,   152 — 346. 

(b)  Under  Constitution,  Art.  X,  sec.  6;  Revisal,  2093. — (1)  She  may 
dispose  of  her  personal  property  by  gift  or  executed  contract,  without  the 
assent  of  her  husband,  Vann  v.  Edwards,  135 — 661  ;  (2)  She  may  devise 
or  bequeath  her  property  without  the  husband's  consent,  Revisal,  2098 ; 
Tiddy    v.    Graves,    126 — 620;     (3)    Leases    of    land    running    not    more    than 


290  FORMATION    OF    CONTRACT. 

three  years  or  beginning  not  more  than  six  months  from  the  execution, 
Revisal,  2096;  (4)  She  may  receive  or  collect  her  property,  Kirkman  v. 
Bank,  77 — 394;  Blake  v.  Blackley,  109 — p.  264,  or  deposit  money  in  bank 
and  check  on  it,  Revisal,  2095;  (5)  She  may  be  stockholder  in  a  corpora- 
tion and  liable  on  her  stock,  Revisal,  1185;  Aleares  v.  Duncan,  123 — 203; 
Smathers  v.  Bank,  155—283;  Bachelor  v.  Norris,  166 — 105;  (6)  Under  the 
recent  statute  she  may  contract  as  if  she  were  a  feme  sole,  except  in  deal- 
ing with  her  husband,  and  in  conveying  her  real  estate.  Lipinskv  v. 
Revell,   167—508. 

(c)  Under  Revisal,  2094;  Code,  1826. — She  may  contract  without  the 
consent  of  her  husband  so  as  to  bind  her  personal  estate,  (1)  for  her 
necessarv  personal  expense,  Clark  v.  Hav,  98 — 421  ;  Berrv  v.  Henderson, 
102—525;  Farthing  v.  Shields,  106—289;  (2)  for  the  support  of  the  family, 
Bazemore  v.  Mountain,  121 — 59;  Clark  v.  Hay,  98 — 421;  Rawlings  v.  Xeal, 
126 — 271  ;    (3)    to   pay   ante-nuptial   debts,   Revisal,   2101. 

3.  All  other  contracts  affecting  her  personal  estate  must  be  made  (1) 

with  the  written  consent  of  her  husband,  Rev.,  2094,  and  this  does  not 
enable  her  to  make  a  legal  contract  binding  on  her  personally,  but  only 
to  reach  her  separate  estate  in  equity,  Pippen  v.  Wesson,  74 — 437 ;  Dough- 
erty v.  Sprinkle,  88 — 300;  Loan  Asso.  v.  Black,  119 — 323.  The  consent  of 
the  husband  may  be  shown  by  his  signing  a  note  with  her,  Jones  v.  Craig- 
miles,  114 — 613;  Harvey  v.  Johnson,  133 — 352;  by  joining  in  a  deed,  Bank 
v.  Ireland,  122 — 571  ;  by  signing  as  a  witness,  Jennings  v.  Hinton,  126 — 
48:  by  signing  an  order  as  agent  for  his  wife,  Brinkley  v.  Ballance,  126 — 
393;  Bates  v.  Sultan,  117 — 94;  and  it  would  seem  that  the  wife  need  not 
contract  in  writing;  by  endorsing  a  note  with  her,  Rawls  v.  White.  127 — 
17;  Coffin  v.  Smith,  128 — 252;  but  playing  on  a  billiard  table  for  which 
she  had  given  a  note  is  not  sufficient  ratification,  Rothchild  v.  McNichol, 
122 — 556.  (2)  She  must  charge  her  separate  estate  either  expressly,  or  by 
necessary  implication  that  it  is  for  her  benefit.  Pippen  v.  Wesson,  74 — 
437:  Flaum  v.  Wallace,  103 — 306;  Jones  v.  Craigmiles,  114 — 613;  Bates  v. 
Sultan,  117 — 94;  Bank  v.  Benbow,  150 — 781.  The  property  charged  need 
not  be  described,  94 — 247.  In  Brinkley  v.  Ballance,  126 — 393,  the  court 
says  that  "charging"  is  not  necessary,  but  this  does  not  seem  to  have  been 
followed  in  other  cases.  Ball  v.  Paquin,  140 — 83.  These  requirements  are 
not  necessary   under   the  present   statute.     Lipinskv   v.   Revell,   167 — 508. 

4.  To  bind  her  real  estate  requires  the  written  consent  of  the  husband, 
private  examination  of  the  wife,  and  charging  the  estate.  Revisal,  952, 
953.  954:  Farthing  v.  Shields,  106—289;  Ball  v.  Paquin.  140-83:  Miller  v. 
Church.  112—626;  Rav  v.  Wilcoxon,  107—514;  Smith  v.  Ingram,  130—100; 
142—960;  Long_v.  Rankin,  108—333:  Bates  v.  Sultan,  117—94;  Harvey  v. 
Tohnson,  133 — 352 ;  Smith  v.  Bruton,  137 — 79 ;  Bazemore  v.  Mountain,  121 — 
59,  126—313;  Weathers  v.  Borders,  124—610;  Williams  v.  Walker,  111  — 
604;  Thompson  v.  Smith,  106—357:  Hall  v.  Short.  81—273:  Scott  v.  Battle, 
85—184;  Jeffress  v.  Green,  79—330:  Newhart  v.  Peters,  80—166:  Miller  v. 
Bumgardner,  109—412;  Bank  v.  Ireland,  122—571:  Gaskins  v.  Allen,  137— 
426:  Wood  v.  Wheeler,  106—512;  Council  v.  Pridgen,  153—443:  Sipe  v. 
Herman,  161 — 107;  Jackson  v.  Beard,  162 — 105  (the  husband  must  be  of 
age)  :  King  v.  McRackan  (N.  C),  84  S.  E.,  1027.  They  should  execute 
the  same  deed.  Green  v.  Bennett,  120 — 394 ;  Slocumb  v.  Ray,  123 — 571  ; 
Ferguson  v.  Kingsland,  93 — 337;  Wynne  v.  Small,  102 — 133.  Private  ex- 
amination was  formerly  required  to  be  taken  after  acknowledgment  by 
husband  and  wife  or  proof  of  execution  by  husband,  McGlennerv  v.  Miller, 
90—216;  Southerland  v.  Hunter.  93—310:"  Ferguson  v.  Kinsland,  93—337: 
Robbins  v.  Harris,  96—557;  Hall  v.  CastleVrry,  101 — 153:  Draper  v.  Allen, 
114 — 50;  Lineberger  v.  Tidwell,  104 — 506;  but  this  is  changed  now,  and 
it  may  be  taken  before  or  after  such  proof,  Revisal,  953.  Certificate  of 
probate  and  private  examination  is  not  conclusive.  Benedict  v.  Jones, 
129—470;  Ware  v.  Nesbit,  94—664:  McCaskill  v.  McKinnon,  121—214; 
Ximocks  v.  Mclntyre,  120—325;  but  if  the  certificate  is  in  proper  form, 
an    innocent    purchaser    will    be    protected.      Rev.,    956;    Butner    v.    Blevins, 


CAPACITY     OF     PARTIES.  291 

125—585;  Marsh  v.  Griffin,  136—333;  Bank  v.  Ireland,  122—571.  Joinder 
of  the  husband  and  private  examination  are  not  sufficient  without  charging 
the  estate.  Zachary  v.  Perry,  130—289;  but  she  may  charge  her  real  estate 
without  executing  a  mortgage,  Bank  v.  Ireland,  122—571;  Ball  v.  Paquin, 
140— £3;  she  does  not  lose  her  right  to  homestead  nor  personal  property 
exemption,  nor  give  a  lien  on  any  specific  property,  unless  she  executes  a 
deed  of  trust  or  mortgage.  Bank  v.  Ireland,  122—571,  127—238;  Harvey 
v  Johnson,  133—352;  Bailey  v.  Barron,  112—54;  Strouse  v.  Cohen,  111- 
349;   Rawlings  v.   Xeal,   126—271. 

5.  As  to  her  equitable  separate  estate,  settled  upon  her,  her  control  is 
still  further  restricted  to  the  manner  prescribed  in  the  instrument.  Hardy 
v.   Holly,  84—661;   Kirby  v.   Boyette,    116—165,    118—244. 

6.  No  lien  existed  where  there  was  no  valid  contract.  \\  eathers  v. 
Borders.  121 — 387,  124 — 610.  Mechanics'  liens  now  exist  under  Revisal, 
2016.  Ball  v.  Paquin,  140—83;  Stephens  v.  Hicks,  156—239;  but  not  in 
favor  of  improvements  made  by  the  husband.     Kearney  v.  Vann,   154—311. 

7.  Failure  to  comply  with  the  statutory  requirements  renders  the  con- 
tract void,  and  a  new  promise  after  coverture  is  removed,  not  based  on 
further  consideration,  is  void.  Felton  v.  Reid,  52—269;  Bank  v.  Bridgers. 
98—67;  Wilcox  v.  Arnold.  116—708;  unless  the  original  consideration 
inured  to  the  benefit  of  her  estate.  Bridgers  v.  Bridgers,  101—71;  Long 
v.  Rankin,   108—333;   Berry  v.   Henderson,   102—525. 

8.  Estoppel  and  fraud. — By  reason  of  her  disability  a  married  woman  is 
not  estopped  by  anvthing  in  the  nature  of  a  contract,  but  she  may  be 
estopped  from  claiming  property  acquired  by  her  under  an  alleged  con- 
tract on  account  of  fraud.  Towles  v.  Fisher,  77— p.  443;  Burns  v.  Mc- 
Gregor 90—222;  Wood  v.  Wheeler,  106—512;  111—231;  Draper  v.  Allen, 
H4_50;  Smith  v.  Ingram.  130—100;  Scott  v.  Battle,  85—184;  Bell  v.  Mc- 
Jones,    151—85;   Gann  v.   Spencer,    167 — 429. 

9.  Contract  with  husband. — Husband  and  wife  may  contract  with  each 
other  as  to  their  property,  subject  to  the  provisions  of  the  statute.  Rev., 
2107,  2108;  Walker  v.  Long,  109—510;  Rencher  v.  Wynne,  86— 268;  Sydnor 
v.  Boyd,  119—481;  Kearney  v.  Vann,  154—311;  Archbell  v.  Archbell,  158— 
408 ;   Norwood  v.  Totten,   166—648.  . 

The  husband  mav  be  agent  for  the  wife,  but  can  not  bind  her  or  her 
property  beyond  the  scope  of  such  agency.  Harper  v.  Dail,  92—394;  Stout 
v  Perry  152—312;  Witz  v.  Gray,  116—48;  Bazemore  v.  Mountain,  121— 
59  126^313;  Rawlings  v.  Neal.  122—173;  Loftin  v.  Crossland,  94—76; 
Boyd  v.  Turpin,  94—137.  The  wife  may  be  the  agent  for  the  husband. 
Sibley  v.  Gilmer,  124—631. 

10  Husband's  right  to  her  property.— The  earnings  of  the  wife  belong 
to  the  husband,  but  he  mav  allow  her  to  take  them,  and  they  then  become 
her  separate  property.  Syme  v.  Riddle,  88—463;  Baker  v.  Jordan,  73— 
145;  Grambling  v.  Dickery.  118—986;  Hairston  v.  Glenn  120— 341:  Cun- 
ningham v.  Cunningham,  121 — 413 ;  State  v.  Robinson,  143—620.  By  the 
acts  of  1913,  ch.  13,  the  earnings  of  the  wife  may  belong  to  her  under  a 
contract  for  services,  and  may  be  considered  in  an  action  by  her  for  per- 
sonal   injuries.      Price   v.    Electric    Co.,    160 — 450.  # 

The  income  of  her  estate  belongs  to  the  wife,  and  the  husband  is  Hahle 
to  account  for  it.  but  not  for  more  than  a  year.  Revisal  2100;  haircloth 
v  Borden,  130—263;  Wells  v.  Batts,  112—283;  Branch  v.  \\  ard,  114—148; 
Bray    v.    Carter,     115—16;    unless    by    special    contract.      Battle    v.     Mayo, 

102^113.  . 

She  mav  maintain  an  action  for  the  possession  of  her  separate  propert} 
against  her  husband,  and  enjoin  him  from  interfering  with  the  rents  and 
profits,  subject  to  his  right  of  occupancy  with  her.  Manning  v.  .Manning, 
79—293  300 :  she  may  exclude  him  where  she  has  had  a  decree  of  divorce. 
Tavlor  v  Taylor,  112—134.  If  the  marriage  and  seism  were  before  1S6S. 
he 'has  his  right  to  rents  and  profits  as  tenant  by  the  curtesy  initiate. 
Thompson  v.  Wiggins.  107—508;  Cobb  v.  Rasberry,  116—137:  Morris  v. 
Morris,  94—613. 


292  FORMATION    OF    CONTRACT. 

11.  Personal  liability. —  Xo  personal  judgment  can  be  rendered  against 
her  for  her  husband's  debts  unless  she  is  a  free-trader.  McLeod  v.  Wil- 
liams, 122 — 451  ;  nor  is  she  liable  personally  on  her  own  contracts,  except 
as  provided  by  statute.  Harvey  v.  Johnson,  133—352;  Green  v.  Ballard, 
115 — 144;    Sherrod   v.   Dixon,    120—61.      She   is   liable   under   present   statute. 

12.  Jurisdiction. — The  remedy  against  a  married  woman,  being  equitable 
in  its  nature,  to  reach  her  separate  property  and  not  to  impose  any  per- 
sonal liability,  must  be  sought  in  the  superior  court.  Vick  v.  Pope,  81— 
22;  Dougherty  v.  .Sprinkle,  88—300;  Neville  v.  Pope,  95—346;  Berry  v. 
Henderson,  102—525;  Baker  v.  Garris,  108—218;  Weathers  v.  Borders, 
124—610;  but  the  defect  of  coverture  must  appear  upon  the  face  of  the 
proceedings  co  render  the  judgment  void.  McAfee  v.  Gregg,  140 — 448; 
Rutherford  v.  Ray,  147 — 253.  Under  the  present  law,  in  a  oroper  case, 
a  justice  may  have  jurisdiction,  and  the  husband  is  not  a  necessary  or 
proper  party."  Robinson  v.  Jarrett,  159—165 ;  Lipinsky  v.  Revell,  167 — 508. 
Where  the  contract  is  made  by  her  as  a  free-trader  or  for  ante-nuptial 
debts,  a  justice  of  the  peace  will  have  jurisdiction  under  $200.  Harvey 
v.  Johnson,  133—352;  so  where  jurisdiction  is  fixed  by  statute,  as  in  case 
of  a  lien.  Finger  v.  Hunter,  130—529;  Smaw  v.  Cohen,  95—85.  Where  it 
is  sought  to  charge  the  separate  estate,  the  complaint  should  describe 
the  property.     Witz   v.   Gray,   116 — 48. 

13.  Conflict  of  laws. — Where  the  contract  is  made  in  another  State,  the 
court  will  presume  that  the  common  law  is  in  force.  Terry  v.  Robbins, 
128 — p.  142.  But  where  a  married  woman  domiciled  in  another  State 
executes  a  note,  valid  under  the  laws  of  that  State,  it  will  be  enforced  here. 
Taylor  v.  Sharp,  108—377;  Wood  v.  Wheeler,  111—231;  Bank  v.  Granite 
Co.,  155 — 43;  but  if  she  is  domiciled  here  and  the  contract  made  is  valid 
in  loco  solutionis,  it  will  not  be  enforced  against  her  here,  if  not  in  ac- 
cordance with  our  law.  Armstrong  v.  Best,  112—59;  Bank  v.  Howell, 
1 19 — 271.  A  deed  or  mortgage  executed  in  another  State  for  land  in  this 
State,  is  void  without  joinder  of  husband  and  private  examination.  Smith 
v.    Ingram,    130—100. 


REALITY    OF    CONSENT.       MISTAKE.  293 


CHAPTER  VII. 
Reality  of  Consent. 

Sec.  1.  Mistake. 
1.  As    to    the   instrument. 

(116)   DELLINGER  v.  GILLESPIE, 

118  N.  G,  737,  24  S.  E.,  538—1896. 

The  defendant  signed  an  order  for  the  plaintiff  to  put  up  light- 
ning rods,  and  in  an  action  for  the  price,  the  defendant  set  up  as 
a  defense  that  there  was  a  mistake  in  the  writing,  and  that  it  did 
not  contain  their  contract.  Judgment  for  the  plaintiff,  and  de- 
fendant appealed.  Affirmed. 

Montgomery,  J.  .  .  .  The  order  was  signed  by  the  defendant  si- 
multaneously with  the  making  of  the  contract,  whatever  the  con- 
tract was.  The  defendant  could  read  and  write,  and  he  signed  the 
paper,  according  to  his  own  testimony,  voluntarily.  The  plaintiff 
made  no  attempt  to  conceal  any  of  its  provisions,  handed  it  to  him 
to  read,  practiced  no  trick  or  surprise  on  him  to  induce  him  to 
execute  it,  and  as  a  matter  of  fact  the  defendant  commenced  to 
read  it.  He  said,  as  a  witness  for  himself  on  the  trial,  that  "He 
(plaintiff)  pulled  out  the  paper  and  showed  it  to  me.  Then  I 
signed  the  paper.  I  didn't  hardly  get  the  first  line.  I  saw  the 
figure  '3'  and  thought  it  was  three  rods  for  the  house.  I  asked 
if  he  would  put  it  up  today,  and  he  said  he  would  put  it  up  to- 
morrow." It  is  plain  that  no  deceit  was  practiced  here.  It  was 
pure  negligence  in  the  defendant  not  to  have  read  the  contract. 
There  it  was  before  him,  and  there  was  no  trick  or  device  re- 
sorted to  by  the  plaintiff  to  keep  him  from  reading  it.  In  Boyden 
v.  Clark,  109  N.  C,  669,  it  is  said  by  the  court:  "If  a  prudent 
person,  in  the  exercise  of  ordinary  care  and  occupying  his  posi- 
tion, would,  by  prosecuting  his  inquiries  further  or  extending  his 
investigations,  have  ascertained  the  truth  before  acting,  relief  would 
be  refused  on  the  ground  of  negligence."  If  we  will  apply  this 
principle  to  the  case  before  us,  we  will  see  that  the  defendant's 
negligence  was  inexcusable.     .     .     .  No  error. 


294  FORMATION    OF    CONTRACT. 


(117)  BEAN  v.  W.  N.  C.  R.  R.  CO., 

107  X.  C,  731,  12  S.  E,  600—1890. 

Civil  action  to  recover  damages  for  injuries  sustained.  Among 
other  defenses  the  defendant  pleaded  a  release  under  seal  by  the 
plaintiff.  The  plaintiff  replied  that  the  release  was  executed  by 
mistake.  There  was  a  verdict  and  judgment  for  the  plaintiff,  and 
defendant  appealed. 

Mfrrimon,  C.  J.  (After  discussing  other  questions  presented.) 
We  are  of  opinion  that  there  was  evidence  of  mistake,  surprise 
and  undue  advantage  taken  of  the  plaintiff,  under  such  circum- 
stances as  ought  to  avoid  the  release  relied  upon  by  the  defendant, 
if  the  allegations  of  the  reply  were  true,  as  the  jury  found  them 
to  be.  The  release  was  executed  within  a  few  days  after  the  plain- 
tiff sustained  the  injuries,  at  the  instance  of  the  defendant  through 
its  agent,  while  he  was  suffering  great  bodily  pain  and  mental 
anxiety  occasioned  by  such  injuries,  when  he  was  unable  to  com- 
prehend the  meaning  and  effects  of  the  release.  He  was  ignorant, 
unable  to  write,  and  did  not  understand  or  comprehend  the  pur- 
port of  such  instrument.  The  defendant  owed  him  wages,  and  he 
believed,  when  he  executed  the  release,  that  he  was  giving  a  re- 
ceipt for  a  part  of  the  sum  due  him  for  wages.  The  jury  so  find 
by  their  verdict  in  response  to  the  pertinent  issues  submitted  to 
them,  except  in  a  single  respect.  The  evidence  tended  to  prove 
that  the  defendant's  agent  at  Hot  Springs,  within  a  few  days  after 
the  plaintiff  sustained  the  injury,  sent  him  on  its  road  to  Salisbury, 
a  distance  of  150  miles  or  more,  where,  at  the  office  of  the  de- 
fendant, its  agent  took  the  release  in  question,  paying  as  consid- 
eration therefor  thirty  dollars.  The  evidence  also  tended  to  show 
that  the  damages  so  sustained  were  greatly  in  excess  of  that  sum. 
There  was  evidence  tending  to  prove  the  substance  of  the  allega- 
tions of  the  reply  in  respect  to  the  relase.  It  was  in  evidence  for 
the  defendant  that  its  agent  took  the  release.  He  testified  that 
the  release — its  purpose — was  explained  to  the  plaintiff.  It  did 
not  appear  that  the  plaintiff  had  counsel  or  any  friend  to  advise 
him  other  than  the  agent  of  the  defendant. 

Granting  that  there  was  no  positive  fraud  on  the  part  of  the  de- 
fendant or  its  agents  (none  was  alleged),  there  was  evidence  to 
prove,  and  the  jury  found,  under  appropriate  instructions  from  the 
court  not  objected  to,  that  the  plaintiff  executed  the  release  by  mis- 
take, occasioned  by  ignorance,  physical  pain,  mental  anxiety  and 
lack  of  capacity,  under  the  circumstances,  to  understand  or  com- 
prehend the  nature  and  purpose  of  such  release. 

The  court  of  equity  will  grant  relief  where  only  the  party  com- 


REALITY    OF    CONSENT.       MISTAKE.  295 

plaining  makes  mistake,  when  the  facts  and  circumstances  give 
rise  to  the  presumption  that  there  has  been  some  undue  influence, 
misapprehension,  imposition,  mental  imbecility,  surprise,  or  confi- 
dence abused.  Mere  ignorance,  mere  inadequacy  of  consideration, 
mere  weakness  of  mind,  mere  mistake  on  the  part  of  one  party, 
will  not  entitle  that  party  to  relief.  But  it  is  otherwise  when  there 
is  a  combination  of  such  things  to  prejudice  the  party.  In  such 
case,  in  good  faith  and  fair  dealing,  the  adverse  party  ought  to 
see  and  know,  that  the  complaining  party  was  not  fit  or  in  such 
mental  condition  as  to  bind  himself  by  contract.  A  court  of  equity 
will  interfere  when  called  upon  to  relieve  a  party  against  his  mis- 
take, made  under  a  combination  of  such  adverse  circumstances  as 
certainly  destroy  his  capacity  to  know  the  nature  of  the  contract 
or  engagement  to  which  he  becomes  a  party.  Buffalow  v.  Buffalovv, 
22  N.  C,  241 ;  Futrill  v.  Futrill,  58  N.  C,  61 ;  Barnes  v.  Ward, 
45  N.  C,  93;  Story's  Eq.  Jur.,  sees.  119,  120,  134,  251;  Smith's 
Man.  Eq.,  45. 

As  we  have  said,  the  plaintiff  does  not  allege,  in  the  reply,  posi- 
tive fraud  of  the  defendant,  nor  mutual  mistake,  nor  undue  in- 
fluence, nor  simply  weakness  of  understanding.  He  alleges  such  a 
combination  of  facts  and  circumstances,  and  produces  evidence  to 
prove  the  same,  as  show  such  mistake  and  surprise  on  his  part  as 
entitles  him  to  have  the  release  declared  inoperative  and  void.  So 
that  the  special  instructions  asked  for,  other  than  those  particu- 
larly referred  to  above,  have  no  material  pertinency. 

Judgment  affirmed. 

A  deed  executed  by  mistake,  where  the  grantor  only  intended  a  power 
of  attorney  will  be  canceled.  Miller  v.  Miller,  89—209.  Where  the  party 
does  not  sign  the  instrument  which  he  intended  to  sign,  and  is  not  guilty 
of  negligence,  there  is  no  contract,  because  the  minds  have  not  met.  Clark 
Cont.,  197;  9  Cyc.  388:  20  Am.  &  Eng.  Encyc,  811.  See  Fraud  in  Factum, 
post  West  v.  R.  R.,  151—231,  154—24;  Moriarity  v.  Traction  Co.,  lo4— 
586;  Hayes  v.  R.  R..  143—125;  Douglas  v.  Matting,  29  Iowa,  498,  4  A.  R., 
238;  Mills  v.  Stevens,  3  Pa.  St.,  21,  45  A.  D.,  621;  6  R.  C.  L.,  624. 

2.  As  to  the  identity  of  the  person. 

(118)  NEWBERRY  v.  N.  &  S.  R.  R.  CO., 

133   N.  C.  45.  45   S.   E.,  356—1903. 

The  plaintiff  sued  the  defendant  for  fifty  boxes  of  Gold  Dust 
Washing  Powder,  and  Fairbanks  Company  was  allowed  to  come  in 
as  defendant  and  claim  the  property.  The  goods  were  shipped  to 
A.  Alexander.  The  plaintiff  claimed  as  purchaser  from  one  Ar- 
thur Alexander,  and  the  company  claimed  to  have  shipped  the 
goods  to  one  Alfred  Alexander.  Arthur  Alexander,  who  was  in- 
solvent, claimed  to  have  bought  the  goods,  while  Alfred  Alexander, 


296  FORMATION    OF    CONTRACT. 

who  was  solvent,  said  he  had  not  ordered  any  goods.  The '  agent 
of  the  company  said  that  the  goods  were  intended  for  Alfred 
Alexander,  and  the  company  contended  that  Arthur  practiced  a 
fraud  on  them  in  obtaining  the  goods  under  the  name  "A.  Alex- 
ander," taking  advantage  of  the  financial  standing  of  Alfred. 

There  was  a  verdict  and  judgment  for  the  defendant,  and  plain- 
tiff appealed. 

Connor,  J.  The  pleadings  and  testimony  present  for  determi- 
nation the  simple  question  whether  the  plaintiff  was  the  owner  of 
the  goods  in  controversy.  To  maintain  this  proposition  it  was  in- 
cumbent upon  the  plaintiff  to  show  that  the  title  had  passed  from 
the  Fairbanks  Company  to  Arthur  Alexander,  from  whom  he  pur- 
chased. It  appears  that  there  was  in  the  neighborhood  one  person 
whose  real  name  was  Arthur  B.  Alexander  and  another  whose  real 
name  was  Alfred  Alexander.  Conceding  that  Arthur  ordered  the 
goods  in  the  name  of  A.  Alexander  and  the  Fairbanks  Company 
shipped  them,  supposing  that  they  were  ordered  by  Alfred  Alex- 
ander and  intending  to  sell  and  ship  to  him,  and  not  to  Arthur,  no 
title  passed  to  the  latter.  In  the  name  "A.  Alexander"  there  was 
a  latent  ambiguity,  due  to  the  fact  that  there  are  two  persons  hav- 
ing the  same  initials  and  in  the  same  neighborhood.  It  was  clearly 
competent  to  show,  by  the  testimony  of  the  shipper  of  the  goods, 
to  which  of  these  two  parties  he  sold  and  consigned  the  goods. 
The  testimony  of  the  witness,  Sheckley,  is  uncontradicted,  and,  if 
believed  by  the  jury,  puts  an  end  to  the  controversy.  There  was 
no  contract  of  sale  by  the  owner  of  the  goods  to  Arthur  Alex- 
ander. This  view  of  the  case  was  presented  to  the  jury  by  His 
Honor,  and,  without  regard  to  the  other  questions  discussed  in 
this  court,  their  finding  entitled  the  defendant  to  judgment. 

While  it  was  not  necessary  to  pass  upon  the  question  of  fraud, 
we  think  His  Honor's  observation,  "That  there  was  considerable 
evidence  of  fraud  as  to  Arthur  Alexander,"  had  abundant  founda- 
tion from  the  uncontradicted  testimony. 

The  judgment  of  the  court  being  that  the  defendant,  Fairbanks 
Company,  is  entitled  to  recover  the  value  of  the  goods,  it  being 
admitted  that  they  could  not  be  delivered  in  specie,  we  find  no 
error  in  the  record  or  the  judgment,  and  the  same  is  affirmed. 

Sec  24  Am.  &  Enc.  Kncvc.  p.  1034.  n.  9:  Cowan  v.  Fairbrother.  118— 
406:  Edmunds  v.  Merchts.'  Trans.  Co..  135  Mass..  283:  Barker  v.  Oins- 
more.  11  Pa.  St..  427.  13  A.  R..  697:  HicVev  v.  McDonald  Bros..  44  So., 
201.  13  L.  R.  A,  (  \".  S.),  413:  Cundv  v.  Lindsay.  3  App.  Cas..  459.  6  E. 
R.  C.  211:  Cole  v.  Improvement  Co..  61  Wash..  365.  112  Pac,  368,  24  Ann. 
Cas.,  749   (mistake  as  to  the  color  of   a  person). 


REAUTY    OF    CONSENT.       MISTAKE.  297 

3.  Identity  of  the  subject-matter. 
MACHINE   CO.  v.   CHALKLEY,  Ante    (4), 

(119)    BARBER-PASCHALL  LUMBER  CO.  v.   BOUSMALL, 

168  N.  C,  501,  84  S.   E..  800—1915. 

There  were  two  tracts  of  land  adjoining  and  owned  by  the  same 
person;  on  one,  known  as  the  Mcintosh  tract,  was  a  large  lot  of 
timber,  and  the  other  was  known  as  the  Foushee  tract.  The 
owner  ran  a  division  line  so  as  to  throw  the  timber  over  on  the 
Foushee  tract ;  the  defendant  afterward  came  into  control  of  the 
Mcintosh  tract  and  contracted  to  sell  it  to  the  plaintiff  ;  the  plain- 
tiff was  buying  it  chiefly  for  the  timber,  and  the  defendant  thought 
it  contained  the  timber  as  it  had  done  originally,  but  he  did  not 
intend  to  sell  any  more  land  than  he  had  gotten  under  his  title 
from  others.  The  plaintiff,  finding  that  the  tract  did  not  have  the 
timber,  sued  the  defendant  for  breach  of  contract.  There  was  a 
judgment  for  the  plaintiff,  and  defendant  appealed. 

Reversed. 

Walker,  J.  .  .  .  It  is  recognized  as  a  fundamental  princi- 
ple, in  the  law  of  contract,  that  there  must  be  a  meeting  of  the 
minds  of  the  parties  on  the  same  thing  at  one  and  the  same  time. 
It  is  true  that  when  the  parties  have  expressed  their  agreement, 
either  oral  or  written,  in  terms  that  are  explicit  and  plain  of 
meaning — that  is,  when  their  minds  have  met  on  the  terms  of  the 
contract — it  may  not  be  revoked  or  altered  by  reason  of  the  mis- 
take of  "one  of  the  parties  alone,  resting  wholly  in  his  own  mind," 
there  being  no  fraud  or  misrepresentation  by  the  other,  but,  where 
essential  terms  of  an  agreement  are  ambiguous,  so  much  so  as  to 
be  fairly  and  reasonably  susceptible  of  different  interpretations, 
and  it  is  clearly  made  to  appear  that  these  terms  have  been  used 
and  intended  by  one  of  the  parties  in  one  sense  and  by  the  other 
in  a  different  sense,  in  such  case  there  has  been  no  meeting  of  the 
minds  on  the  terms  of  the  contract,  and,  unless  some  facts  have 
arisen  creating  an  estoppel  or  rendering  such  course  altogether  in- 
equitable, the  agreement  or  attempted  agreement  should  be  set 
aside,  and  the  parties  placed  in  statu  quo.  This  was  held  in  sub- 
stantially these  terms  in  Stong  v.  Lane,  66  Minn.,  94,  68  N.  W., 
765,  a  case  not  unlike  the  one  before  us,  and  the  principle  will  be 
found  very  generally  approved  in  the  decided  cases  and  text-books 
of  approved  excellence.  Machine  Co.  v.  Chalklev,  143  N.  C,  181, 
55  S.  E.,  524;  Lumber  Co.  v.  Wilson  ct  a!.,  51  W.  Va.,  30,  41 
S.  E.,  137;  Silliman  v.  Gillespie,  48  W.  Va..  374,  37  S.  E..  669; 


298  FORMATION    OF    CONTRACT. 

Conlan  v.  Sullivan,  110  Cal.,  624,  42  Pac,  1081;  Chamberlaine  v. 
Marsh's  Admr.,  20  Va.  (6  Munf.),  283;  Werner  v.  Rawson,  89 
Ga.,  619,  15  S.  E.,  813;  Kyle  v.  Kavanagh,  103  Mass.,  356,  4 
Am.  Rep.,  560;  Rice  v.  D wight  Mfg.  Co.,  2  Cush.  (56  Mass.) 
80;  Fink  v.  Smith,  170  Pa.,  124,  32  Atl.,  566,  50  Am.  St.  Rep., 
750;  Bingham  v.  Bingham,  27  Eng.  Rep.  Repr.  Chan.,  7,  934; 
Cooper  v.  Phipps,  Cooper  et  al.,  L.  R.  Eng.  &  Ir.  App.  Cases,  vol. 
21,  p.  49;  Pomeroy,  Eq.  Jurisprudence,  sec.  856;  Pomeroy  on 
Contracts,  sees.  250,  251;  29  A.  &  E.  (2d  Ed.),  pp.  664,  665;  9 
Cyc,  398. 

This  being  the  established  position,  the  case  before  us,  as  here- 
tofore stated,  is  one  which,  in  our  opinion,  clearly  calls  for  its 
application,  the  facts  showing  that  the  description  in  the  contract 
is  ambiguous,  and  that  both  parties,  designing,  the  one  to  sell,  and 
the  other  to  buy,  the  timber,  and  honestly  believing  that  the  de- 
fendant owned  it,  entered  into  a  contract  for  the  land  on  which 
it  was  supposed  to  be  situate,  and  in  the  written  instrument  the 
plaintiff  used  and  intended  to  use  the  descriptive  terms  as  cover- 
ing the  Mcintosh  place  as  it  formerly  was,  "the  land  commonly 
known  as  the  Mcintosh  tract,"  and  the  defendant  intended  to  con- 
fine the  contract  to  that  part  of  the  Mcintosh  place  which  he  con- 
trolled.    .     . 

On  the  record,  it  must  be  adjudged  that  there  has  been  no  con- 
tract between  the  parties  ;  that  the  verdict,  establishing  a  breach 
of  same  and  assessing  damages  for  such  breach,  be  set  aside. 
And,  it  appearing  from  the  pleadings  that  the  plaintiff  has  paid  on 
the  contract  the  sum  of  $565,  he  is  entitled  to  recover  this  sum 
and  interest  thereon  from  time  of  payment,  and,  on  repleader  by 
defendant,  he  is  entitled,  as  an  offset  to  this  sum,  to  the  value  of 
the  timber  as  it  stood  on  the  ground  and  which  was  cut  by  plain- 
tiff from  the  part  of  the  Mcintosh  place  owned  by  the  defendant 
while  he  was  acting  under  the  agreement  as  he  understood  it 
to  be.     .     .     . 

See  Sherwood  v.  Walker,  66  Mich.,  568,  33  N.  W.,  919,  11  A.  S.  R.,  53; 
Raffles  v.  Wichelhaus,  2  Hurl.  &  C.  906,  6  E.  R.  C,  198;  6  R.  C.  L.,  621. 

4.  As  to  the  existence  of  the  subject-matter. 

(120)   POOL  v.  ALLEN, 

29  N.  C,   120—1846. 

Action  of  assumpsit.  The  plaintiff  was  indebted  to  the  defend- 
ant in  the  sum  of  $23.85,  and  being  about  to  remove  to  another 
State,  appointed  two  persons,  Long  and  W.  Pool,  his  agents,  with 
instructions  to  pay  his  debt.  The  defendant  had  given  the  debt 
to  one  Bumpass,  a  constable,  to  collect,  and  W.  Pool  paid  the  debt 


REALITY    OF    CONSENT.       MISTAKE.  299 

to  Bumpass.  Some  time  afterward  Long  saw  the  defendant  and 
told  him  he  would  pay  the  deht  as  soon  as  he  saw  Bumpass ;  the 
defendant  said  that  he  was  the  proper  person  to  receive  the  money, 
and  that  if  Long  would  pay  him  he  would  stand  between  him  and 
danger.  Long  then  paid  him  the  debt,  and  when  he  learned  that 
Pool  had  already  paid  it  to  Bumpass,  he  demanded  it  from  the  de- 
fendant, and  suit  was  brought.  The  defendant  contended  that  the 
plaintiff  could  not  recover  because  Bumpass  had  not  paid  over  the 
money,  and  because  the  payment  by  Long  was  voluntary.  There 
was  a  verdict  and  judgment  for  the  plaintiff,  and  defendant  ap- 
pealed. 

Ruffin,  C.  J.  The  payment  to  Bumpass  discharged  the  debt. 
It  made  no  difference,  that  he  did  not  pay  the  money  over.  That 
was  between  him  and  his  principal,  Allen.  As  he  was  Allen's 
agent,  with  authority  to  receive  the  money,  the  payment  of  it  to 
him  was  the  same  as  payment  to  the  creditor  personally.  Then,  as 
the  debt  was  discharged,  the  second  payment,  to  Allen  himself,  was 
without  consideration,  and  made  by  mistake ;  and  the  case  is, 
therefore,  one  of  those  common  ones,  stated  in  the  books,  in  which 
the  action  for  money  had  and  received  lies.  The  second  payment 
was  not  voluntary,  in  any  sense  that  can  affect  this  action.  It 
is  true,  it  was  not  illegally  exacted  by  process  or  by  duress.  But 
that  is  not  the  criterion.  Money  paid  as  a  debt,  under  a  mistake, 
and  where  no  debt  exists,  may  be  recovered  back,  although  there 
was  no  compulsion  on  the  person  to  make  the  payment.  There  was 
no  intention  here  to  make  a  gift  of  the  money,  so  as  in  that  sense 
to  constitute  it  a  case  of  a  voluntary  payment.  On  the  contrary, 
it  was  clear  that  the  money  was  paid  and  received  in  discharge  of 
a  debt  then  believed  to  subsist.  In  that  there  was  a  total  mistake 
on  the  part  of  the  person  making  the  payment,  and,  probably,  on 
that  of  the  receiver  also ;  and  it  is  plain  that  money,  thus  got  un- 
der a  mistake,  and  for  no  consideration,  can  not  be  kept  ex  aequo 
et  bono.  On  that  ground  then  the  plaintiff  was  entitled  to  a  ver- 
dict. But  here  the  case  goes  further,  and  sets  out  in  substance  an 
express  promise  to  return  the  money,  if  it  were  not  then  properly 
payable  to  the  defendant.  It  was  said,  indeed,  that  the  defendant's 
promise  was  to  indemnify  Long  against  personal  loss,  and  did  not 
extend  to  the  present  plaintiff.  But  clearly  the  promise  must  be 
considered  as  made  to  Long  in  the  character  in  which  he  was  then 
acting,  namely,  as  the  plaintiff's  agent.  The  case  is  one.  therefore, 
in  which  there  can  be  no  hesitation  in  affirming  the  judgment. 

Where   payment   is   made   with   a   knowledge   of   all   the    facts,    the   money 
can    not   he    recovered,    even    though    there   should   he   no    deht.      Devereux 
v.  Ins.  Co.,  98—6;  Barnhardt  v.  R.  R..   135—258;   Matthews  v.   Smith.  67- 
374;    Comrs.   v.   Comrs.,   75—240;    Comrs.   v.    Setzer,   70—426:    Brummitt    v. 


300  FORMATION    OF    CONTRACT. 

McGuire,  107 — 351.  Neither  can  it  be  recovered  if  paid  under  legal 
process.  Adams  v.  Reeves,  68 — 134 ;  or  with  the  means  of  knowledge  in 
reach.  Bank  v.  Taylor,  122 — p.  570;  Jones  v.  Jones,  118 — p.  447;  Newell 
v.  March,  30 — 441.  This  is  upon  the  idea  that  there  is  no  mistake,  or  only 
a  mistake  of  law.  If  payment  is  not  voluntary,  it  may  be  recovered. 
Lyle  v.  Siler,  103 — p.  265;  and  in  Hauser  v.  McGinnas,  108 — 631,  where 
the  express  agent  had  paid  the  money  twice,  the  court  says  he  could  re- 
cover from  the  defendant,  even  though  he  had  been  negligent,  on  account 
of  the  fraud  of  the  defendant.  Simmons  v.  Vick,  151-79;  Nordyke  & 
Harmon  Co.  v.  Kehlor,  155  Mo.,  643,  78  A.  S.  R.,  600;  Couturier  v.  Hastie, 
5  H.  L.  Cas.,  673,  6  E.  R.  C,  204 ;  9  Cyc,  399. 

5.  As  to  the  nature   of  the  subject-matter. 
(121)    PARKER  and  others,   Executors,  v.   LEATHERS, 

55   N.   C,  249—1855. 

Nash,  C.  J.  This  case  is  essentially  different  from  Nixon  v. 
Lindsay  (55  N.  C,  230),  decided  at  this  term.  That  was  a  hill 
to  equalize  partition  made  by  distributees.  The  negroes  were 
divided  into  lots  intended  to  be  equal.  In  that  assignment  to  the 
plaintiff  was  one  known  to  be  sick,  but  her  sickness  was  not  con- 
sidered to  be  dangerous.  In  a  short  time  she  died  from  an  incura- 
ble disease,  which  she  had  at  the  time  of  the  partition,  though  un- 
known to  the  parties ;  and  the  plaintiff  prayed  for  contribution 
from  the  other  distributees,  which  was  granted  by  the  court.  The 
case  now  before  us  is  to  call  the  defendant  to  account,  as  one  of 
the  executors  of  Joseph  Armstrong.  The  plaintiffs,  together  with 
the  defendant  Leathers,  were  coexecutors.  By  his  will,  the  testa- 
tor made  a  large  bequest  of  slaves  to  his  widow,  during  her  life. 
Among  them  was  one  by  the  name  of  Jacob,  who,  together  with 
the  other  property  bequeathed  to  the  widow,  was,  after  her  death, 
sold  by  the  executors  as  part  of  the  estate.  The  defendant 
Leathers,  with  the  consent  of  all  interested,  purchased  the  negro 
Jacob,  at  the  price  of  $725,  took  him  into  possession,  and  made 
sundry  payments  amounting  in  the  whole  to  $168.  In  about  six- 
teen months  Jacob  died,  and  the  defendant  refused  to  pay  any- 
thing more,  upon  the  allegation,  that  at  the  time  of  the  sale  and 
purchase,  the  negro  was  unsound  with  a  mortal  disease  which  sub- 
sequently put  an  end  to  his  life.  No  fraud  is  alleged.  This  de- 
fense presents  the  case  of  a  purchaser  refusing  to  pay  for  a  slave 
he  has  purchased,  without  any  allegation  of  fraud,  or  taking  any 
warranty,  but  merely  on  the  ground  that  he  was  unsound  at  the 
time  of  the  sale,  and  that  unknown  to  the  vendor.  Equity  takes 
care  of  those  who  take  care  of  themselves.  In  a  parol  sale  of 
personal  property  there  is  no  implied  warranty  of  soundness,  and 
the  defendant  ought  to  have  taken  a  written  conveyance  with  a 
covenant  of  soundness.  He  has  not  done  so,  and  must  account 
for  the  price  of  Jacob,  deducting  the  payment  made  by  him. 


REALITY    OF    CONSENT.       MISTAKE.  301 


(122)   WOOD  v.  BOYNTON, 

64  Wis.,  265,  54  A.  R.,  610—1885. 

The  plaintiff  was  the  owner  of  a  small  stone,  of  which  she  did 
not  know  the  value;  she  offered  to  sell  it  to  the  defendant,  who 
was  a  jeweler;  he  examined  it,  told  her  he  did  not  know  what 
it  was,  and  offered  her  one  dollar  for  it ;  later  she  sold  it  to  him 
for  one  dollar;  and  afterward  it  was  ascertained  to  be  a  diamond 
worth  $700.  The  plaintiff  then  offered  to  return  the  money,  de- 
manded the  stone,  and  brought  this  action  to  recover  it.  There 
was  a  judgment  for  the  defendant,  and  the  plaintiff  appealed. 

Affirmed. 

Tavlok,  J.  .  .'  .  The  only  question  in  the  case  is  whether  there 
was  anything  in  the  sale  which  entitled  the  vendor  (the  appellant) 
to  rescind  the  sale  and  so  revest  the  title  in  her.  The  only  reasons 
we  know  of  for  rescinding  a  sale  and  revesting  the  title  in  the 
vendor  so  that  he  may  maintain  an  action  at  law  for  the  recovery 
of  the  possession  against  his  vendee  are  (1)  that  the  vendee  was 
guilty  of  some  fraud  in  procuring  a  sale  to  be  made  to  him;  (2) 
that  there  was  a  mistake  made  by  the  vendor  in  delivering  an 
article  which  was  not  the  article  sold — a  mistake,  in  fact,  as  to 
the  identity  of  the  thing  sold  with  the  thing  delivered  upon  the 
sale.  This  last  is  not  in  reality  a  rescission  of  the  sale  made,  as 
the  thing  delivered  was  not  the  thing  sold,  and  no  title  ever  passed 
to  the  vendee  by  such  delivery. 

In  this  case,  upon  the  plaintiff's  own  evidence,  there  can  be  no 
just  ground  for  alleging  that  she  was  induced  to  make  the  sale 
she  did  by  any  fraud  or  unfair  dealings  on  the  part  of  Mr.  Boyn- 
ton.  Both  were  entirely  ignorant  at  the  time  of  the  character  of 
the  stone  and  of  its  intrinsic  value.  Mr.  Boynton  was  not  an  ex- 
pert in  uncut  diamonds,  and  had  made  no  examination  of  the 
stone,  except  to  take  it  in  his  hand  and  look  at  it  before  he  made 
the  offer  of  one  dollar,  which  was  refused  at  the  time,  and  after- 
ward accepted  without  any  comment  or  further  examination  made 
by  Mr.  Boynton.  The  appellant  had  the  stone  in  her  possession 
for  a  long  time,  and  it  appears  from  her  own  statement  that  she 
had  made  some  inquiry  as  to  its  nature  and  qualities.  If  she 
chose  to  sell  it  without  further  investigation  as  to  its  intrinsic 
value  to  a  person  who  was  guilty  of  no  fraud  or  unfairness  which 
induced  her  to  sell  it  for  a  small  sum,  she  can  not  repudiate  the 
sale  because  it  is  afterwards  ascertained  that  she  made  a  bad  bar- 
gain.    Kennedy  v.   Panama,  etc..   Mail  Co.,  L.   R.,  2  Q.   B.,   580. 

There  is  no  pretense  of  any  mistake  as  to  the  identity  of  the 
thing  sold.     It  was  produced  by  the  plaintiff  and  exhibited  to  the 


302  FORMATION    OF    CONTRACT. 

vendee  before  the  sale  was  made,  and  the  thing  sold  was  delivered 
to  the  vendee  when  the  purchase  price  was  paid.  Kennedy  v. 
Panama,  etc.,  Mail  Co.,  L,  R.,  2  Q.  B.,  587;  Street  v.  Blay,  2  B. 
&  Ad.,  456;  Gompertz  v.  Bartlett,  2  El.  &  Bl.,  849;  Gurney  v. 
Wormersley,  4  El.  &  Bl.,  133 ;  Ship's  Case,  2  De  G.,  J.  &  S.,  544. 
Suppose  the  appellant  had  produced  the  stone,  and  said  she  had 
been  told  that  it  was  a  diamond,  and  she  believed  it  was,  but  had 
no  knowledge  herself  as  to  its  character  or  value,  and  Mr.  Boyn- 
ton  had  given  her  $500  for  it,  could  he  have  rescinded  the  sale  if 
it  had  turned  out  to  be  a  topaz  or  any  other  stone  of  very  small 
value?  Could  Mr.  Boynton  have  rescinded  the  sale  on  the  ground 
of  mistake?  Clearly  not,  nor  could  he  rescind  it  on  the  ground 
that  there  had  been  a  breach  of  warranty,  because  there  was  no 
warranty,  nor  could  he  rescind  it  on  the  ground  of  fraud,  unless 
he  could  show  that  she  falsely  declared  that  she  had  been  told  it 
was  a  diamond,  or  if  she  had  been  so  told  still  she  knew  it  was 
not  a  diamond.     Street  v.  Blay,  supra. 

It  is  urged  with  a  good  deal  of  earnestness  on  the  part  of  the 
counsel  for  the  appellant,  that  because  it  has  turned  out  that  the 
stone  was  immensely  more  valuable  than  the  parties  at  the  time  of 
the  sale  supposed  it  was,  such  fact  alone  is  a  ground  for  the  re- 
scission of  the  sale,  and  that  fact  was  evidence  of  fraud  on  the 
part  of  the  vendee.  Whether  inadequacy  of  price  is  to  be  re- 
ceived as  evidence  of  fraud,  even  in  a  suit  in  equity  to  avoid  a 
sale,  depends  upon  the  facts  known  to  the  parties  at  the  time  the 
sale  is  made.  When  this  sale  was  made  the  value  of  the  thing 
sold  was  open  to  the  investigation  of  both  parties,  neither  knew 
its  intrinsic  value,  and  so  far  as  the  evidence  in  this  case  shows, 
both  supposed  that  the  price  paid  was  adequate.  How  can  fraud 
be  predicated  upon  such  a  sale,  even  though  after-investigation 
showed  that  the  intrinsic  value  of  the  thing  sold  was  hundreds  of 
times  greater  than  the  price  paid  ?  It  certainly  shows  no  such  fraud 
as  would  authorize  the  vendor  to  rescind  the  contract  and  bring  an 
action  at  law  to  recover  the  possession  of  the  thing  sold.  .  .  .  The 
following  cases  show  that  in  the  absence  of  fraud  or  warranty  the 
value  of  the  property  sold,  as  compared  with  the  price  paid,  is  no 
ground  for  the  rescission  of  the  sale.  Wheat  v.  Cross,  31  Md., 
99,  1  A.  R.,  28;  Lambert  v.  Heath,  15  Mees.  &  W.,  487;  Bryant 
v.  Pember.  45  Vt.,  487;  Kuelkamp  v.  Hidding,  31  Wis.,  503,  511. 
However  unfortunate  the  plaintiff  may  have  been  in  selling  this 
valuable  stone  for  a  mere  nominal  sum,  she  has  failed  entirely  to 
make  out  a  case  either  of  fraud  or  mistake  in  the  sale  such  as 
will  entitle  her  to  a  rescission  of  such  sale  so  as  to  recover  the 
property  sold  in  an  action  at  law.  Judgment  affirmed. 

The  parties   should  protect  themselves   by  making  the  quality  a  material 


REALITY    OF    CONSENT.       MISTAKE.  303 

part  of  their  agreement,  since  where  the  mistake  is  not  about  the  article 
itself  but  as  to  some  collateral  matter,  as  the  value,  etc.,  the  contract 
is  binding.  Kyle  v.  Kavanagh,  103  Mass.,  356,  4  A.  R.,  566:  Hecht  v. 
Batcheller,  147  Mass.,  335,  9  A.  S.  R.,  708;  Page  Cont.,  sees.  155,  156; 
Clark  Cont.,  203;  20  Am.  &  Eng.  Encvc,  811;  9  Cyc,  397.  In  the  case  of 
Sherwood  v.  Walker,  66  Mich.,  568,  33  X.  \Y..  919,  11  A.  S.  R.,  53,  the 
defendant  sold  a  cow  which  he  supposed  to  be  barren,  and  the  plaintiff 
was  buying  the  cow  for  beef ;  before  the  cow  was  delivered  to  the 
plaintiff  the  defendant  discovered  that  the  cow  was  a  breeder,  and  there- 
fore much  more  valuable,  and  refused  to  comply  with  the  trade ;  the  court 
held  that  there  was  no  contract. 

6.  As    to    the   terms,    quantity,    price,    etc. 

(123)   BORDEN  v.  RAILROAD, 

113  N.  C,  570,  18  S.  E.,  392,  37  A.   S.  R.,  632—1893. 

Civil  action  for  damages  for  breach  of  contract.  The  plaintiff 
wishing  to  ship  cotton  from  Goldsboro  to  Liverpool,  asked  the  de- 
fendant's agent  for  rates.  The  agent  gave  a  rate  of  sixty-nine  and 
a  half  cents,  but  the  defendant  claimed  that  the  rate  was  eighty- 
nine  and  a  half  cents,  and  that  the  telegraph  operator  made  a  mis- 
take in  transmitting  it.  The  plaintiff  was  compelled  to  pay  the 
latter  rate,  and  brought  this  action  to  recover  the  difference.  The 
telegraph  line  was  operated  by  the  defendant  company.  There 
was  a  verdict  and  judgment  for  the  plaintiff,  and  defendant  ap- 
pealed. 

Burwell,  J.  It  is  conceded  that  the  local  agent  of  the  defend- 
ant at  Goldsboro  made  a  written  offer  to  ship  for  the  plaintiff  500 
bales  of  cotton  to  Liverpool  in  November,  1891,  and  that  the  said 
agent  was  authorized  to  make  such  a  proposal  on  the  part  of  the 
defendant,  and  that  plaintiff  at  once  accepted  this  offer,  his  ac- 
ceptance being  also  in  writing.  Furthermore,  it  seems  to  be  con- 
ceded that  the  said  agent  plainly  and  unequivocally  expressed  what 
he  understood  to  be  the  price  to  be  charged  by  the  defendant  com- 
pany for  the  transportation  of  the  cotton,  and  there  was  no  mis- 
understanding between  the  plaintiff  and  the  agent  as  to  any  of  the 
terms  of  the  alleged  contract. 

Now  it  is  evident  that,  if  the  agent  is  considered,  not  as  the 
mere  mouthpiece  of  the  defendant  corporation  through  whom  the 
intention  of  its  higher  officers  in  this  matter  was  to  be  simply 
communicated  to  the  plaintiff,  but  as  its  authorized  contracting 
agent — its  alter  ego  in  this  affair — there  was  no  error  or  mistake 
at  all,  much  less  one  that  would  prevent  the  written  proposal  and 
its  written  acceptance  from  constituting  a  valid  contract,  by  the 
plain  terms  of  which  each  party  would  be  bound.  In  this  view  of 
the  matter  there  was  no  variance  between  the  intention  of  the  de- 
fendant  and   the   expression    of   that   intention.      The   contracting 


304  formation  of  contract. 

agent  expressed  in  unequivocal  language  exactly  what  he  intended 
to  express.  The  plaintiff  accepted  the  offer  thus  made  to  him. 
The  defendant  can  not  escape  liability  on  this  contract  by  asserting 
that  its  agent  would  not  have  so  conducted  himself  if  he  had 
known  at  that  time  what  he  was  afterwards  informed  of.  And  it 
might  well  be  insisted  on  the  part  of  the  plaintiff  that,  in  the  ab- 
sence of  notice  to  the  contrary  he  had  a  right  to  assume  that  that 
agent  had  power  to  act  for  his  principal  in  this  matter,  and  that 
defendant  should  not  be  allowed  to  dispute  that  authority. 

Passing  by  that  question  and  assuming,  for  the  sake  of  argu- 
ment, that  the  local  agent  at  Goldsboro  was  the  mere  mouthpiece 
or  spokesman  of  the  defendant  in  this  matter,  and  that  plaintiff 
knew  this  fact,  then  we  have  here  a  variance  between  the  intention 
of  the  proposer  (the  defendant)  and  the  expression  of  that  inten- 
tion. There  was  an  error  in  the  expression  of  the  defendant's  in- 
tention, but  that  error  was  unknown  to  the  plaintiff.  He  had  no 
good  reason  to  suspect  that  the  writing  submitted  to  him  did  not 
correctly  express  the  intention  of  the  defendant.  He  did  not  "snap 
up"  an  offer  which  he  knew  or  suspected  was  erroneously  ex- 
pressed. He  merely  accepted  a  plainly  expressed  proposition.  In 
the  view  of  the  matter  we  are  now  taking,  the  question,  then,  is: 
If,  in  the  expression  of  the  intention  of  one  of  the  parties  to  an 
alleged  contract,  there  is  error,  and  that  error  is  unknown  to  and 
unsuspected  by  the  other  party,  is  that  which  was  so  expressed  by 
the  one  party  and  agreed  to  by  the  other  a  valid  and  binding  con- 
tract, which  the  party  not  in  error  may  enforce?  The  law  is  well 
settled,  says  Mr.  Lawson  in  his  work  on  Contracts,  sec.  206,  that 
a  man  is  bound  by  an  agreement  to  which  he  has  expressed  his  as- 
sent in  unequivocal  terms,  uninfluenced  bv  falsehood,  violence  or 
oppression,  and  it  judges  of  an  agreement  between  two  persons 
exclusively  from  those  expressions  of  their  intention  which  are 
communicated  between  them.  And  Wharton  in  his  work  on  the 
same  subject,  sec.  196,  quotes  from  Tamplin  v.  James,  L.  R.,  15 
Ch.  Div.,  215,  this  general  rule,  as  he  denominates  it:  "Where 
there  has  been  no  misrepresentation,  and  where  there  is  no  am- 
biguity in  the  terms  of  the  contract,  the  defendant  can  not  be  al- 
lowed to  evade  the  performance  of  it  by  the  simple  statement  that 
he  has  made  a  mistake.  But,  he  adds,  "where  a  proposal  evi- 
dently contains  a  mistake,  an  acceptor,  by  snapping  at  it,  will  not 
be  permitted  to  take  advantage  of  the  mistake."  In  section  202a 
he  announces  the  rule  thus:  "A  unilateral  mistake  of  expression 
of  one  party  can  not  be  set  up  by  him  as  a  ground  for  rescinding 
the  contract  or  for  resisting  its  enforcement,  when  his  language 
was  accepted  by  the  other  party  in  its  natural  sense.  But  when 
the  blunder  made  by  the  proposer  is  obvious,  an  acceptor  will  not 


REALITY    OF    CONSENT;       MISTAKE.  305 

be  allowed,  by  catching  it  up,  to  take  an  unfair  advantage."  An 
essential  bilateral  error  as  to  the  nature  of  a  contract  avoids  it,  if 
based  upon  such  error,  but  a  unilateral  error  will  not  have  that 
effect.  Bishop  on  Contracts,  sees.  701,  702.  "It  would  open  the 
door  to  fraud  if  such  a  defense  was  to  be  allowed.  It  is  said  that 
it  is  hard  to  hold  a  man  to  a  bargain  entered  into  under  a  mis- 
take, but  we  must  consider  the  hardship  on  the  other  side."  Tamp- 
lin  v.  James,  supra.  We  must  consider  also  that  "one  of  the  re- 
markable tendencies  of  the  English  Common  Law  upon  all  subjects 
of  a  general  nature  is  to  aim  at  practical  good  rather  than  the- 
oretical perfection,  and  to  seek  less  to  administer  justice  in  all 
possible  cases  than  to  furnish  rules  which  shall  secure  it  in  the 
common  course  of  human  business."      1    Story   Eq.  Jur.,  sec.   111. 

We  think,  therefore,  that  all  evidence  in  regard  to  plaintiff's 
purchase  of  the  cotton  was  irrelevant.  He  had  a  valid  contract 
for  its  shipment  at  69'/>  cents.  His  rights  thereunder  could  not 
be  affected  by  a  notice  that  the  defendant's  agent  had  been  misin- 
formed, as  we  have  seen. 

Hence,  we  need  not  consider  the  exception  taken  by  the  defend- 
ant to  the  admission  or  exclusion  of  evidence  relating  to  that  part 
of  the  controversy.  Under  the  law  as  we  hold  it  to  be,  it  being 
admitted  that  the  plaintiff  had  been  required  to  pay  more  than  the 
contract  price  for  the  shipment  of  his  cotton,  he  was  entitled,  as 
His  Honor  held,  to  recover  the  difference  between  the  sum  so 
paid  and  the  contract  price.  Affirmed. 

In  Pegram  v.  Telegraph  Co.,  100—28,  the  plaintiff  sent  to  a  broker  the 
message,  "Party  offers  100  shares  C.  C.  &  A.  stock  at  forty-three.  Answer 
quick."  The  telegraph  operator  transmitted  it  "forty,"  and  it  was  ac- 
cepted by  the  broker  in  that  way.  The  court  held  that  there  was  no  con- 
tract between  the  plaintiff  and  the  broker,  and  that  the  defendant  company 
was  not  liable  for  anything  paid  by  the  plaintiff  to  the  broker  on  account 
of  the  transaction.  Some  courts  hold  that  this  is  a  binding  contract  because 
the  telegraph  company  is  the  agent  of  the  party  making  the  offer.  See 
Clark   Cont.,  204,   and  note. 

A  mistake  of  one  party  will  not  entitle  him  to  relief,  but  where  there 
is  a  mutual  mistake,  or  a  mistake  of  one  party  and  fraud,  imposition,  etc., 
on  the  part  of  the  other,  the  court  will  grant  relief.  Jones  v.  \\  arren, 
134_390;  Lehew  v.  Hewett,  130—22;  Dav  v.  Day,  84—408;  White  v.  R.  R., 
110—456;  Bavnes  v.  Harris,  160—307;  Wilson  v.  Scarboro,  163—380.  Mis- 
take of  this  "last  kind  is  usually  treated  under  the  head  of  fraud.  \\  here 
the  means  of  information  are  open  to  both,  each  is  presumed  to  act  on 
his  own  judgment,  in  the  absence  of  fraud.  Wilson  v.  Land  Co.,  77— 44.i : 
Crowder  v.  Langdon,  38—476:  Capehart  v.  Mhoon,  58—178:  Delhnger  v. 
GihVpie.  118—737;  Michael  v.  Michael,  39—349.  A  mistake  of  one  party 
not  known  to  the  other  may  prevent  a  contract  being  made;  but  if  made 
it  is  not  voidable.  A  mistake  of  one  known  to  the  other,  (a)  if  not  due 
to  the  conduct  of  the  other,  is  simple  mistake;  (b)  if  caused  by  the  other 
innocentlv.  it  is  misrepresentation;  (c)  if  caused  by  his  fraudulent  conduct, 
it  is  fraud.  Harriman  Cont.,  sees.  422,  423:  Hart.  &  X.  H.  R.  R^  v.  Jack- 
son, 24  Conn.,  514,  63  A.  D.,  177:  Cunningham  Mfg.  Co.  v.  Rotograpn 
Co.,  30  App.  Cas.  (D.  C),  524.  13  Ann.  Cas..  1147;  6  R.  C.  L.,  620;  Singer 
v.  Grand  Rapids  Match  Co.,   117  Ga.,  86,  43   S.    E.,  755. 


306  FORMATION    OF    CONTRACT. 

Mistake  in  number  of  acres  of  land  will  affect  the  contract,  if  material, 
as  where  the  parties  are  not  trading  for  the  tract  as  a  whole  without 
regard  to  the  acres ;  "more  or  less"  does  not  exclude  the  inquiry.  Leigh 
v.  Crump,  36—299 ;  Gentry  v.  Hamilton,  38—376 ;  Pharr  v.  Russell,  42—222 ; 
Wilcoxon  v.  Galloway,  67 — 463 ;  Anderson  v.  Rainev,  100 — 321  ;  Peacock 
v.  Barnes,  139—196;  Smathers  v.  Gilmer,  126—759;  Bethell  v.  AIcKmney, 
164 — 78.  Mistake  in  calculation  corrected.  Reade  v.  Street,  122 — 301 ; 
Comrs.  v.  Fry,  127—258;  Holden  v.  Warren,  118—326. 

7.  Mistake  in  the  expression  of  the  instrument. 

(124)  HENRY  v.  SMITH  and  others, 
76  N.   C.,  311—1877. 

Civil  action  to  correct  a  lease.  The  plaintiff  executed  a  lease 
to  Lynch  for  99  years.  By  mistake  in  drawing  the  instrument 
the  consideration  was  stated  to  be  $25  paid,  whereas  it  was  in- 
tended to  be  $25  to  be  paid  annually  during  the  term.  Lynch  as- 
signed his  interest  to  W.  C.  Smith,  and  he  assigned  to  Thomas  J. 
Smith. 

There  was  a  judgment  for  the  plaintiff,  and  defendants  ap- 
pealed. 

Bynum,  J.  As  the  indenture  of  lease  is  written,  executed  and 
registered,  the  only  construction  we  can  put  upon  it  is,  that  it 
conveyed  the  whole  term  for  the  consideration  of  $25.  That  is 
admitted  by  the  plaintiff,  and  hence  he  seeks  to  have  the  deed  cor- 
rected so  as  to  show  that  the  consideration  was  the  sum  of  $25 
annually  to  be  paid  as  rent  during  the  continuance  of  the  term. 
We  are  satisfied  that  such  was  the  meaning  of  the  parties  to  the 
lease  and  therefore  as  between  the  plaintiff  and  Lynch,  the  imme- 
diate lessee,  the  correction  of  the  deed  could  be  made  and  so  as  to 
all  subsequent  assignees  with  notice.  But  the  ultimate  purchaser 
of  the  term,  to  wit,  Thomas  J.  Smith,  against  whom  the  relief  is 
asked,  is  an  assignee  for  value  and  without  notice.  In  purchas- 
ing and  for  his  own  protection,  he  was  bound  to  trace  back  his 
title  through  all  the  mesne  conveyances,  up  to  the  original  lease 
made  by  the  plaintiff.  None  of  these  furnished  any  notice  of  the 
mistake  in  the  deed  or  that  the  lease  was  subject  to  an  annual 
rental.  They  all  showed  that  the  entire  term  of  99  years  was  con- 
veyed in  consideration  of  the  specific  sum  of  $25  in  hand  paid 
on  the  execution  of  the  deed.  The  party  seeking  relief  committed 
the  mistake  and  is  in  default.  The  defendant  is  an  innocent  pur- 
chaser and  is  in  no  default.  Tn  such  cases  when  one  of  two  par- 
ties must  suffer,  the  loss  must  fall  upon  him  who  is  in  default. 
He  must  abide  by  his  own  laches.    2  Sugden  on  Vendors,  360,  362. 

A  jury  trial  was  waived  below  and  the  court  found  as  a  fact, 
that  Lynch  and  W.  C.  Smith  had  actual  notice  of  the  mistake  in 


REALITY    OF    CONSENT.       MISTAKE.  307 

the  deed  and  had  paid  rent,  but  that  Thomas  J.  Smith  had  no 
actual  or  other  notice  than  that  contained  in  the  several  assign- 
ments. 

The  court  decided  as  a  matter  of  law  that  the  deeds  of  assign- 
ment operated  as  constructive  notice  to  Thomas  J.  Smith.  In 
that  His  Honor  erred.  The  plaintiff  is  entitled  to  the  relief  he 
asked  as  to  Lynch  and  also  to  W.  C.  Smith,  who  is  insolvent,  if 
he  desires  it,  but  not  as  to  Thomas  J.  Smith. 

There  is  error.  The  judgment  is  reversed  as  to  Thomas  J. 
Smith  and  affirmed  as  to  Lynch  and  W.  C.   Smith.     The  case  is 

Remanded. 

(125)  WILSON  v.  SCARBORO, 

163  N.  C,  380,  79  S.  E.,  811—1913. 

This  action  was  brought  to  recover  damages  of  the  defendant 
for  entering  upon  land  and  taking  away  certain  timber.  The  de- 
fendant had  sold  to  the  plaintiff  certain  timber  mentioned  in  their 
contract,  with  the  right  to  cut  and  remove  it  within  five  years. 
The  defendant  alleged  that  the  plaintiff  was  required  "to  cut  the 
timber  continuously  after  once  beginning  to  cut,  until  the  cutting 
of  the  same  should  be  completed,  unless  while  cutting  the  timber 
the  price  of  lumber  should  decline,  so  that  he  could  not  cut  the 
timber  at  a  profit,"  and  that  this  was  omitted  from  the  contract 
by  the  mutual  mistake  of  the  parties  or  by  the  mistake  of  the  de- 
fendant and  the  fraud  of  the  plaintiff.  There  was  a  judgment 
for  the  defendant,  and  the  plaintiff  appealed.  Reversed. 

Walker,  J.  ...  A  careful  reading  of  the  testimony  has  not  con- 
vinced us  that  there  is  any  evidence  of  a  mutual  mistake  by  the 
parties  in  writing  their  contract.  A  contract  is  the  agreement  of 
both  parties,  and  not  merely  the  intention  of  one.  Their  minds 
must  meet  and  be  in  accord  upon  one  and  the  same  thing  at  the 
same  time.  Rodgers  v.  Bell,  156  N.  C,  378;  Elks  v.  Ins.  Co., 
159  N.  C.,619.  "Even  if  the  defendant  had  clearly  shown  that  it  so 
understood  the  agreement,  it  will  not  do,  as  the  court  proceeds, 
not  upon  the  understanding  of  one  of  the  parties,  but  upon  the 
agreement  of  both.  No  principle  is  better  settled."  Lumber  Co. 
v.  Lumber  Co.,  137  N.  C,  431,  citing  Brunhild  v.  Freeman,  77  X. 
C,  128;  Prince  v.  McRae,  84  N.  C.,  674;  Bailey  v.  Rutjes.  86 
N.  C,  520,  and  other  cases. 

It  follows  from  this  doctrine  that  no  contract  can  be  altered  or 
amended  in  any  substantial  respect,  except  by  consent  of  both 
parties  or  by  what  may  be  equivalent  thereto.  If  a  court  finds 
that  there  has  been  a  mutual  mistake,  or  its  equivalent,  viz., 
that  there  has  been  a  mistake  of  one  of  the  parties  brought  about 


308  FORMATION    OF    CONTRACT. 

by  the  fraud  of  the  other,  it  will  in  an  otherwise  proper  case, 
reform  the  contract,  but  not  otherwise.  The  undisclosed  intention 
or  understanding  of  one  will  not  answer  the  purpose.  ''The  mis- 
take, to  be  relieved  against  in  equity,  must  be  one  that  is  mutual, 
material,  and  not  induced  by  negligence.  It  must  be  mutual,  if 
the  complainant  wishes  to  have  the  instrument  reformed,  and  not 
simply  set  aside,  because  equity  can  not  undertake  to  reform  on 
the  ground  of  ignorance  or  misapprehension  of  one  of  the  parties 
as  to  any  facts,  though  it  may  rescind.  It  is  essential  that  the 
mistake,  to  be  relieved  against  in  equity,  must  be  an  error  on  both 
sides.  If,  however,  such  ignorance  or  misapprehension  was  in- 
duced or  fraudulently  taken  advantage  of  by  the  other  party,  re- 
lief will  be  administered,  but  obviously  on  different  grounds." 
Bispham  Equity,  sec.  191.  "Equity  will  reform  a  written  contract 
or  other  instrument  inter  vivos  where,  through  mutual  mistake, 
or  the  mistake  of  one  of  the  parties  induced  or  accompanied  by 
the  fraud  of  the  other,  it  does  not,  as  written,  truly  express  the 
agreement  of  the  parties."  Eaton  Eq.,  sec.  618 ;  Warehouse  Co. 
v.  Ozment,  132  N.  C,  839;  Pelletier  v.  Cooperage  Co.,  158  N.  C, 
403;  Dameron  v.  Lumber  Co.,  161  N.  C,  498,  and  the  same  case 
at  this  term,  p.  278. 

The  defendant's  evidence  in  this  case  hardly  conforms  to  the 
standard  of  proof  required  for  a  correction  of  written  instruments. 
It  tends  to  show  a  mistake  in  his  own  mind,  rather  than  one  com- 
mon to  the  parties — his  own  understanding,  rather  than  the  agree- 
ment of  the  parties.  It  must  have  been  the  intention  of  both  par- 
ties to  write  the  contract  as  he  now  claims  it  should  be,  and  to 
insert  in  it  the  clause  alleged  to  have  been  left  out. 

New  trial. 

A  mistake  in  the  description  in  a  deed  may  he  corrected.  Credle  v. 
Hays,  88—321;  Pugh  v.  Brittain,  17 — 34;  a  deed  intended  to  convey  one 
tract,  and  by  mistake  includes  two,  Xewsom  v.  Rufferlow,  16 — 383;  or 
where  by  mistake  a  deed  does  not  contain  a  certain  tract,  Pinchback  v. 
Mining  Co..  137 — 171;  the  omission  to  except  certain  timber  in  a  sale  of 
land.  King  v.  Hobbs,  139 — 170;  or  where  the  deed  gives  the  wrong  'ound- 
ary  for  the  lot  sold,  Warehouse  Co.  v.  Ozment,  132 — 839 ;  where  certain 
notes  were  assigned  in  payment  for  land  and  there  was  a  mistake  in 
the  calculation  as  to  the  amount,  Smith  v.  Amis,  10 — 469 ;  a  receipt  given 
for  too  much,  Elliott  v.  Logan,  62 — 163 ;  so  with  a  release  under  seal. 
Turnage  v.  Turnage,  42—127;  Motley  v.  Motley,  42—211;  the  word  "heirs" 
may  be  supplied  in  a  deed,  Morris  v.  Quince,  109 — 15;  Ray  v.  Comrs.,  110 — 
169;  Vickers  v.  Leigh,  104 — 248:  a  guardian  bond  improperly  drawn  by 
mistake  may  yet  protect  the  ward,  Armistead  v.  Bozman,  36 — 117;  a  mar- 
riage settlement  not  drawn  according  to  the  intention  of  the  parties, 
Scott  v.  Duncan,  16 — 407;  Clemmons  v.  Drew,  55 — 314;  a  seal  omitted  or 
added  by  mistake,  McCown  v.  Sims,  69 — 159;  Lynam  v.  Califer.  64 — 572; 
notes  executed  to  the  wrong  person,  Sallinger  v.  Perry,  133 — 35 :  where 
guardian  conveys  to  wards  in  wrong  proportion,  Scott  v.  Queen,  94 — 462; 
Speight  v.  Gatling,  17 — 5;  Allen  v.  Pryant,  42 — 276:  insurance  contract 
corrected,   Floare  v.  Ins.  Co.,   144 — 232:   if  by  mutual  mistake  of  the  parties. 


REALITY    OF    CONSENT.        .MISTAKE.  309 

accident  or  fraud,  the  contract  omitted  something,  or  embraced  something 
that  ought  to  have  been  excluded,  equity  will  grant  relief.  Parker  v. 
Morrill,  98— ^p.  235;  Archer  v.  McLure,  166—140;  Clements  v.  Ins.  Co., 
155—57;    Baynes    v.    Harris,    160—307. 

iWhether  the  court  will  correct  an  executory  contract  within  the  statute 
of  frauds  and  enforce  it  as  corrected,  has  been  variously  held.  Adams 
Equity,  169,  and  note ;  Bispham  Eq.,  540,  541  ;  such  relief  was  denied  in 
Davis   v.   Ely,   104—16. 

Awards,  correction  of  mistakes  in,  see  Eaton  v.  Eaton,  43—102;  Walker 
v.  Walker,  60—255;  Leach  v.  Harris,  69—532;  King  v.  Mfg.  Co.,  79—360; 
Miller   v.   Bryan,   86—167. 

8.  Mistake    of    law. 

(126)   KORNEGAY  v.  EVERETT, 

99   X.   C,  30.  5   S.  E.,  418—1888. 

Civil  action  tried  upon  exceptions  to  report  of  referee.  For 
the  purpose  of  securing  a  debt  to  the  plaintiff,  the  defendant  on 
October  1,  1883,  executed  a  mortgage  to  the  plaintiff  on  certain 
lands,  and  also  on  a  steamboat ;  the  plaintiff  also  became  assignee 
of  a  certain  mortgage  executed  by  the  defendant  to  Weil,  in  1881 ; 
in  May,  1884,  the  defendant  executed  a  deed  of  trust  for  all  his 
property  to  John  R.  Smith,  including  the  mortgaged  property,  and 
reserving  his  homestead,  in  trust  to  pay  all  his  debts ;  the  plaintiff 
having  a  greater  part  of  the  debts,  entered  into  an  agreement  with 
the  defendant  and  the  trustee,  by  which  he  was  to  take  a  convey- 
ance in  fee  simple  for  the  lots  embraced  in  his  mortgage,  sur- 
render his  debts,  and  release  the  steamboat ;  the  plaintiff  com- 
plied with  his  part  of  this  agreement,  and  with  the  consent  of 
Everett  took  deeds  from  the  trustee  for  the  lots,  all  the  parties 
thinking  these  deeds  were  sufficient  to  convey  a  clear  title ;  Everett 
and  wife  did  not  join  in  these  deeds,  and  afterwards  refused  to 
give  effect  to  the  plaintiff's  title,  claiming  that  his  homestead  right 
did  not  pass.  The  plaintiff  asked  that  the  settlement  be  set  aside 
and  that  he  be  allowed  to  foreclose  his  mortgages. 

The  plaintiff  and  the  trustee  both  testified  as  to  the  agreement, 
but  the  defendant  objected  to  the  evidence  on  the  ground  that  it 
was  incompetent  to  show  the  agreement  outside  of  the  deeds,  that 
the  mistake  was  a  mistake  of  law  and  without  any  element  of  fact 
or  fraud,  and  the  evidence  was  incompetent  under  the  statute  of 
frauds.  The  referee  sustained  the  objection,  and  plaintiff  ex- 
cepted. 

The  Judge  below  held  that  the  evidence  was  competent,  but  that 
it  was  insufficient  to  show  a  mistake  in  the  execution  of  the  deeds, 
confirmed  the  report,  and  the  plaintiff  appealed. 

Davis,  J.  The  deed  executed  by  Smith,  trustee,  while  purport- 
ing to  convey  an  absolute  estate  in  fee  in  the  property  to  the  plain- 


310  FORMATION    OF    CONTRACT. 

tiff,  by  reason  of  the  reservation  of  the  homestead  in  the  deed  of 
trust  to  Smith,  in  fact  conveyed  an  estate  subject  to  the  home- 
stead, the  defendant  Everett  and  wife  not  joining  the  trustee  in 
the  execution  of  the  deed  to  plaintiff,  by  reason  of  the  mistake 
of  all  the  parties,  in  supposing  that  the  deed  of  the  trustee  would 
convey  an  absolute  title,  as  it  was  intended  it  should  do. 

The  plaintiff  says  that,  having  surrendered  his  claims  and  the 
mortgages  by  which  they  were  secured,  the  defendant  refuses  to 
give  effect  to  the  agreement,  but  claims  the  homestead,  and  he 
asks  that  if  defendant  will  not  comply,  it  be  rescinded. 

The  questions  presented  are : 

1.  Will  the  court  correct  such  a  mistake  of  law?  and 

2.  If  so,  was  the  evidence  sufficient  to  establish  the  mistake? 
The  evidence  offered  by  the  plaintiff  to  show  the  mistake  was, 

upon  objection  by  the  defendant,  ruled  out  by  the  referee  as  in- 
competent, but  it  was  held  by  the  court  below  to  be  competent,  but 
insufficient.  There  was  no  appeal  by  the  defendant  from  so  much 
of  His  Honor's  ruling  as  held  that  the  evidence  was  competent, 
and  it  may  be  that  the  first  question  is  not  necessarily  before  us  in 
the  case  on  appeal,  but  as  the  sufficiency  or  insufficiency  of  the 
evidence  would  be  of  no  consequence  if  the  court  had  not  the 
power  to  correct  the  mistake,  and  as  that  was  the  chief  question 
discussed  by  counsel,  we  think  it  proper  that  it  should  be  con- 
sidered. 

It  is  undoubtedly  the  general  rule,  as  laid  down  by  the  Chief 
Justice  in  Thomas  v.  Lanes,  83  N.  C,  191,  "that  a  written  in- 
strument disposing  of  property  or  constituting  a  contract,  can  not 
be  altered,  impaired  or  explained  by  parol  proof  of  a  different 
purpose  or  understanding  from  that  contained  in  the  writing." 
And  it  is  said  by  Adams  (Equity,  sec.  169)  :  "The  prima  facie 
presumption  of  law  is,  that  the  written  contract  shows  the  ulti- 
mate intention,  and  that  all  previous  proposals  and  arrangements, 
so  far  as  they  may  be  consistent  with  the  contract,  have  been  de- 
liberately abandoned.  It  seems,  however,  that  the  instrument  may 
be  corrected,  if  it  is  admitted  or  proved  to  have  been  made  in 
pursuance  of  a  prior  agreement,  by  the  terms  of  which  both  par- 
ties meant  to  abide,  but  with  which  it  is  in  fact  inconsistent ;  or 
if  it  is  admitted  or  proved  that  an  instrument  intended  by  both 
parties  to  be  prepared  in  one  form,  has  by  reason  of  some  unde- 
signed insertion  or  omission,  been  prepared  and  executed  in  an- 
other," etc. 

What  was  the  document  intended  to  be?  If  it  is  admitted,  or, 
as  was  said  in  Jones  v.  Perkins,  54  N.  C,  337,  established  by 
clear  and  convincing  proof,  that  by  mistake  of  the  parties  (and 
it   must  be  the  mistake  of   both   parties  if   the   equity   rests   upon 


REAUTV    OF    CONSENT.       MISTAKE.  311 

mistake)  the  instrument  fails  to  express  the  intention  of  the  par- 
ties, it  will  be  corrected,  and  this  will  be  done  whether  the  mistake 
be  one  of  fact  or  of  law,  as  is  clearly  shown  in  McKay  v.  Simp- 
son, 41  N.  C,  452;  Hart  v.  Roper,  41  N.  C,  349;  Womack  v. 
Ecker,  62  N.  C,  161;  Lynam  v.  Califer,  64  N.  C,  572;  Lutz  v. 
Thompson,  87  N.  C,  334. 

The  question  is  discussed  at  length  in  Benson  v.  Markel,  de- 
cided in  the  Supreme  Court  of  Minnesota  in  May,  1887,  published 
in  vol.  36,  page  44,  of  the  Albany  Law  Journal,  and  after  a  re- 
view and  citation  of  a  great  number  of  authorities,  it  is  said: 
"A  careful  consideration  of  the  authorities  has  led  us  to  the  con- 
clusion that  the  power  of  courts  of  equity  to  afford  relief  from 
the  consequences  of  the  mutual  mistake  of  parties  to  written  in- 
struments is  not  strictly  limited  to  mistakes  of  fact,  but  extends 
also  to  mistakes  of  law." 

The  defendant  relied  with  confidence  upon  the  decision  of  this 
court  in  Sandlin  v.  Ward,  94  N.  C,  490,  in  which  it  is  said:  "A 
court  of  equity  never  corrects  mistakes  of  law,  save  in  exceptional 
cases,  where  the  mistake  is  mixed  up  with  other  equitable  ele- 
ments," etc. 

Of  course  a  court  of  equity  will  only  correct  a  mistake  when 
equity  requires  it. 

Was  there  such  an  equitable  element  in  this  case? 
If  the  plaintiff  held  a  security  for  his  debt,  which  was  dis- 
charged in  pursuance  of  the  agreement,  and  with  the  understand- 
ing and  intention  of  both  parties  that  it  should  be  discharged  upon 
the  execution  of  the  deed  conveying  the  lots  contained  in  the  deed 
from  Smith,  trustee,  to  the  plaintiff,  free  from  all  encumbrance, 
and  it  was  intended  and  thought  by  all  the  parties  that  such  a 
title  was  conveyed,  then  would  it  not  be  manifestly  inequitable  for 
the  defendant  to  retain  the  benefit  derived  from  the  release  of 
the  debts  and  surrender  of  the  mortgage  by  the  plaintiff,  without 
giving  full  effect  to  the  agreement,  by  securing  to  the  plaintiff  the 
title  in  fee  to  the  land  conveyed  to  him  by  the  trustee?  Would 
not  the  plaintiff  have  a  right  to  have  the  contract  rescinded  and 
to  be  relegated  to  his  original  security? 

Assuming  the  facts  to  be  as  alleged,  the  defendant  can  not  as- 
sert any  claim  to  the  property  conveyed  by  the  deed  of  his  trustee, 
adversely  to  that  deed,  without  restoring  to  the  plaintiff  the  se- 
curity lost  by  him  in  consequence  of  the  acceptance  of  that  deed. 
If  it  be  said  that,  peradventure,  the  wife  of  the  defendant  will 
not  join  in  the  execution  of  such  an  instrument  as  will  carry  the 
agreement  into  effect,  the  answer  is  to  be  found  in  Welborn  v. 
Sechrist,  88  N.  C,  287,  and  he  must  make  reasonable  effort  to 
comply  with  the  agreement. 


312  FORMATION    OF    CONTRACT. 

There  was  no  error  in  ruling  that  the  evidence  was  competent. 

As  to  the  sufficiency  of  the  evidence  to  correct  the  mistake,  the 
proof  must  be  full  and  clear  and  not  merely  preponderant,  but 
such  as  would  have  satisfied  a  chancellor  or  court  of  equity  under 
the  old  practice.     Loftin  v.  Loftin,  96  N.  C,  94,  and  cases  cited. 

The  only  witnesses  were  the  plaintiff  and  the  defendant  Smith, 
the  trustee ;  there  was  no  conflicting  testimony,  and  if  these  wit- 
nesses are  to  be  believed,  the  deed  from  Smith,  trustee,  to  the 
plaintiff  was  intended  to  convey  a  title  in  fee  unencumbered,  and 
it  was  thought  by  all  the  parties  at  the  time  that  it  did  convey 
such  a  title,  so  that,  nothing  else  appearing,  it  was  sufficient ;  but 
the  referee  having  excluded  this  evidence,  and  thus  rendering  it 
unnecessary  for  the  defendant  to  offer  any  evidence  controverting, 
as  his  answer  does,  the  facts  as  testified  to,  he  has  a  right  to  be 
heard  in  denial,  and  this  case  will  be  certified  to  the  end  that  it 
may  be   further  proceeded   with   in   accordance  with  this  opinion. 

Error. 

A  pure  mistake  of  law,  where  the  parties  do  exactly  what  they  intended 
to  do,  but  are  mistaken  in  the  legal  effect,  will  not  be  remedied.  Bank  v. 
Morehead,  124 — 622;  Bistol  v.  Morganton,  125—365;  McMinn  v.  Patton, 
92 — 371;  Jones  v.  Jones,  118 — 440;  Grantham  v.  Kennedy,  91 — 153;  Bispham 
Eq.,  283.  But  a  mistake  as  to  the  existence  of  a  legal  right  is  generally 
considered  a  mistake  of  fact.  Estis  v.  Jackson,  111 — 145;  Hart  v.  Roper, 
41 — 349 ;  Powell  v.  Cobb,  56 — 456.  A  mistake  as  to  a  foreign  law  is  a 
mistake  of  fact.  Clark  Cont.,  206;  Condor  v.  Secrest,  149 — 201;  Pelletier 
v.  Cooperage  Co.,  158 — 403;  Dolvin  v.  Am.  Harrow  Co.,  125  Ga..  699,  54 
S.  E.,  706,  28  L.  R.  A.  (N.  S. ),  785;  Osincup  v.  Henthorn,  89  Kan.,  58, 
130  Pac,  652.  46  L.  R.  A.   (N.   S.),   174. 

Evidence  to  show  mistake  for  correction  must  be  clear,  strong  and 
convincing.  Lehew  v.  Hewett.  138 — 6;  Elv  v.  Earlv,  94 — 1;  Harding  v. 
Long,  103—1;  Pollock  v.  Warwick,  104—638;  King  v.  Hobbs,  139—170; 
Warehouse  Co.  v.  Ozment,  132 — 839.  An  apparent  clerical  error  in  a  deed, 
as  in  writing  east  for  west,  will  be  overlooked.  Wiseman  v.  Green,  127 — 
288;  Gray  v.  Jenkins,  151 — 80;  Torrey  v.  McFadyen.  165 — 237;  Ipock  v. 
Gaskins,   161 — 673. 

For  discussion  of  mistake  generallv,  see  1  Page  Cont.,  sees.  58,  71-84, 
155,  171-174;  Harritnan  on  Cont,  sec.  290:  Clark  Cont,  196-208;  Bishop 
Cont.,  sees.  228-238;  6  Cyc,  388,  ct  scq.;  20  Am.  &  Eng.  Encyc.  807, 
et  scq.;  4  L.  R.  A.,  483;  5  L.  R.  A.,  152;  6  L.  R.  A..  835;  12  L.  R.  A., 
273;  Adams  Eq.,  168,  ct  scq.;  Bispham  Eq.,  sees.  185-191;  2  Pom.  Eq.  Jur., 
sec.  838,  et  scq.;  6  R.  C.  L.,  620. 

Sec.   2.  Misrepresentation. 

(127)    FOLLETTK    v.    THE    MUTUAL    ACCIDENT    ASSO- 
CIATION, 

110  \.  C.  ?>77,  14  S.  E..  923.  15  L.  R.  A.,  668,  28  A.  S.  R.,  693-1892. 

Civil  action  to  recover  on  an  insurance  policy.  The  defendant 
appealed   from  the  judgment   rendered. 

Avkry,  J.     .     .     .     There  is  no  branch  of  the  law  as  to  which, 


REALITY    OF    CONSENT.       MISREPRESENTATION.  313 

in  all  of  its  ramifications,  there  is  so  much  conflict  in  the  rulings 
of  the  various  courts  of  appeal,  and  so  great  a  diversity  of  opin- 
ion amongst  respectahle  text-writers,  as  that  governing  the  rights 
and  liabilities  of  insurers. 

When  the  universal  custom  was  that  the  underwriter  sat  in  his 
city  office  and  issued  policies  of  insurance,  relying  solely  upon  the 
representations   of   the   applicant    for   information,    whether   as   to 
his  own  physical  state  or  as  to  the  value,  condition  and  surround- 
ings of  his  buildings,  the  insurer  would  have  dealt  at  a  great  dis- 
advantage with  the  unreliable  class  of  his  customers,  if  a  contract 
procured  by   false  representations  had  not  been   declared   fraudu- 
lent and  void,  or  if  the  disregard  of  stipulations  intended  to  insure 
the  observance  of  ordinary  care  in  the  habits  of  a  person,  or  the 
use  of  a  building,  had  not  been  held  sufficient  to  defeat  a  recovery 
upon  the  death  of  a  person  or  the  destruction  of  the  property  in- 
sured.    But  when,  in  the  new  order  of  things,  the  active  compe- 
tition between  companies  brought  to  every  man's  door  a  soliciting 
agent,  furnished  with  instructions  and  advised  as  to  his  duties  by 
the  best  trained  business  men  and  ablest  lawyers  in  the  country, 
the  shrewdest  and  most  unscrupulous  of  applicants  could  hope  to 
get   no   advantage,    and   the   untrained    or   uneducated   among   the 
number  labored  under  a  decided  disadvantage  in  answering  ques- 
tions, not  always  comprehended  in  all  of  their  bearings,  and  in  re- 
ceiving subsequently  from  its  chief  office,  in  a  distant  city,  the  con- 
tract of  the  company,  limiting  its  own  liability  and  imposing  new 
duties  upon  the  insured  by  means  of  conditions  never  heard  of 
before  the  issuing  of  the  policy,  and  often  never  read,  or  imper- 
fectly   understood    afterwards.      Ubi    cadctn    ratio,    ibi    idem    jus. 
When  custom   reverses  the  condition  of  the  parties,   it  would  be 
strange  if  the  law  should  undergo  no  modification. 

The  local  agent  of  the  defendant  company  testifies  that  with  a 
knowledge  of  the  deafness  of  the  plaintiff  he  filled  out  his  appli- 
cation for  an  accident  policy,  signed  his  own  name  on  the  back  of 
it,  and  forwarded  it  to  the  principal  office  in  New  York.  The 
policy  came  in  due  course  of  time  and  was  delivered  to  the  plain- 
tiff, who  paid  all  of  the  premiums  assessed  against  him,  until  he 
was  so  seriously  wounded  in  his  arm  by  the  accidental  discharge 
of  a  gun,  in  the  hands  of  a  friend,  as  to  make  amputation  neces- 
sary. The  company  took  a  receipt  by  way  of  compromise,  which, 
under  the  findings  of  the  jury,  is  not  evidence  of  payment,  and, 
as  there  was  no  exception  to  the  rulings  or  charge  involving  the 
question  of  payment  or  satisfaction,  we  are  brought  to  the  con- 
sideration of  the  leading  point.  In  the  application  for  membership 
is  the  following  paragraph  : 

"I  have  never  had,  nor  am   I   subject  to,  fits,  disorders  of  the 


314  FORMATION    OF    CONTRACT. 

brain,     ...     or  any  bodily  or  mental  infirmity,  except  had  an 
attack  of  rheumatism  six  years  ago." 

The  defendant  now  contends  that  the  representation  by  the 
plaintiff  that  he  was  free  from  bodily  infirmity  was  false  and 
fraudulent,  and  constituted  a  material  inducement  to  the  defend- 
ant to  issue  the  policy.  Ordinarily,  the  defendant  could  avoid  the 
performance  of  the  contract  by  showing  the  falsity  of  a  material 
statement  in  the  application.  But  the  plaintiff,  where  represen- 
tations contained  in  the  application  are  admitted  to  be  untrue, 
may  rebut  the  presumption  of  fraudulent  intent  arising  from  such 
admission  by  showing  that  the  local  agent  of  the  company,  with 
full  knowledge  of  the  falsity  of  the  statement,  entered  the  answers 
of  the  insured  and  forwarded  the  application,  approved  by  his 
own  endorsement.  We  can  not  give  the  sanction  of  this  court  to 
the  doctrine  that  a  local  agent  may  scream  into  the  ear  of  a  deaf 
person  solicitations  to  apply  for  an  accident  policy,  write  for  him 
an  answer,  which  he  knows  at  the  time  to  be  untrue,  to  a  question 
in  the  application,  procure  the  policy,  receive  the  premiums  as 
they  fall  due,  and  when  the  insured  becomes  prostrate  from  a 
wound,  stand  aside  at  the  bidding  of  the  principal  and  allow  it, 
with  the  premiums  in  its  coffers,  to  avoid  the  contract  on  account 
of  a  statement  known  by  the  agent  to  be  false  when  he  prepared 
it  for  the  applicant's  signature.  The  reason  which  induced  the 
courts  to  guard  the  underwriter  against  misrepresentations  as  to 
facts  within  the  peculiar  or  exclusive  knowledge  of  applicants  no 
longer  exists,  when  the  agent  of  the  insurer,  on  the  ground,  has 
as  full  knowledge  of  the  truth  or  falsity  of  an  application  pre- 
pared by  him  as  has  the  insured.  Ccssante  ratione,  cessat  ct  ipsa 
lex.  Where  the  local  agent  of  a  company  has  actual  knowledge  of 
the  falsity  of  an  answer  to  a  question  in  the  application  which  he 
writes  for  the  insured,  the  knowledge  of  the  agent  will  be  imputed 
to  the  company,  and  it  will  not  be  allowed  to  avoid  the  contract 
on  the  ground  of  false  warranty.  1  Am.  &  Eng.  Enc,  333 ;  1 
May  on  Ins.,  sees.  140—143 ;  2  Ibid.,  sees.  497—501  ;  Dupree  v. 
Ins.  Co.,  92  N.  C,  417;  Ibid.,  93  N.  C,  240;  Hornthal  v.  Ins. 
Co.,  88  N.  C,  73;  Fishbeck  v.  Ins.  Co.,  54  Cal.,  422;  Eggleston 
v.  Ins.  Co.,  65  Iowa,  308;  Ins.  Co.  v.  Fish,  71  111.,  620;  Mullen 
v.  Ins.  Co.,  58  Vt.,  113;  Shaffer  v.  Ins.  Co.,  53  Wis.,  361;  Ins. 
Co.  v.  McCrea,  8  Lea   (Tenn.),  513. 

Tt  is  not  material  whether  we  say  that  the  conduct  of  the  local 
agent  amounts  to  a  waiver  or  works  an  estoppel  on  the  insurer,  as 
the  authorities  are  in  conflict  upon  the  point.  1  May,  supra,  sec. 
143  ;  2  Ibid.,  sec.  498.  Certain,  it  is,  that  in  such  cases  the  knowl- 
edge of  the  agent  is  imputed  to  the  principal,  and  "to  deliver  a 
policy  with  a  full  knowledge  of  the  facts,  upon  which  its  validity 


REALITY    OF    CONSENT.       MISREPRESENTATION.  315 

may  be  disputed,  and  then  insist  upon  those  facts  as  a  ground  of 
avoidance,  is  to  attempt  a  fraud."     2  May,  supra,  sec.  497.     The 
agent  necessarily  discovered,   while  negotiating  with  the  plaintiff, 
that  the  latter  was  deaf,  and  it  would  be  as  unreasonable  to  pre- 
sume that  both  the  agent  and  the  applicant  intended  to  affirm  that 
to  be  true  which  they  knew  to  be  false,  as  that  such  a  patent  de- 
fect as  the  loss  of  an  eye  in  a  horse  did  not  exist.     Leslie  v.  Ins. 
Co.,  5  T.  &  C.   (N.  Y.),   193;  Ins.  Co.  v.  Mahone,  21  Wallace, 
152;  Brown  v.  Gray,  51  N.  C,  103;  Fields  v.  Rouse,  48  N.  C,  72. 
We  do  not  propose  to  go  behind  the  verdict  and  the  instruction 
upon   which  it  was    founded,   and  avoid  the   reaffirmation  of   the 
principles  announced  on  the  former  hearing  of  this  case  by  deter- 
mining  what   is   a   bodily   infirmity,   since,   conceding   deafness   to 
come  under  such  designation,  we  think  that  there  was  no  error  in 
the  rulings  of  the  court  below.     As  already  intimated,  it  is  imma- 
terial whether  we  declare  that  the  agent  by  his  conduct  waived 
objection  to  the  inaccurate  statement,  or  that  by  writing  it  down, 
or  having  full  knowledge  of  the  real  truth  of  the  matter,  his  con- 
duct operated  to  estop  the  company,  since,  in  view  of  what  occur- 
red, when  the  application  was  made  out,  and  before,  the  avoidance 
of    liability   under   the   contract,   because   of    the   infirmity   known 
by  the  agent  to  exist,  would  be  fraudulent  and  unjust.     There  is 

No   error. 

(128)  BRYANT  v.  LIFE  INSURANCE  CO., 

147  N.  C,  181.  60  S.  E.,  983—1908. 

This  was  an  action  to  recover  upon  a  life  insurance  policy.  The 
defense  was  that  the  insured,  at  the  time  of  the  application  for 
the  policy,  made  false  representations  to  the  company  on  material 
matters,  chiefly  that  he  had  never  had  consumption;  that  he  was 
then  in  sound  health,  and  that  he  had  not  been  under  the  care  of 
a  physician  within  two  years.  There  was  a  judgment  for  the 
plaintiff,  and  defendant  appealed. 

Hoke,  J.  Our  statute  on  insurance,  in  reference  to  the  question 
involved  in  this  appeal,  Revisal,  sec.  4808,  provides :  "All  state- 
ments or  descriptions  in  any  application  for  a  policy  of  insurance, 
or  in  the  policy  itself,  shall  be  deemed  and  held  representations 
and  not  warranties;  nor  shall  any  representation,  unless  material 
or  fraudulent,  prevent  a  recovery  on  the  policy."  And  in  Fish- 
blate  v.  Fidelity  Co.,  140  N.  C,  589,  the  court,  in  construing  this 
section  (erroneously  printed  in  the  opinion  as  sec.  4646).  held  as 
follows:  "1.  In  an  action  for  indemnity  on  an  accident  policy, 
where,  on  an  issue  involving  the  question  as  to  whether  the  plain- 
tiff, in  representing  himself  to  be  sound  physically  and  mentally, 


316  FORMATION    OF    CONTRACT. 

made  a  false  statement  on  a  matter  material  to  the  contract,  a 
charge  that  a  misrepresentation,  to  become  material,  must  be  as  to 
a  defect  which  contributes  in  some  way  to  the  loss  for  which  in- 
demnity is  claimed,  is  erroneous.  2.  Every  fact  untruly  asserted 
or  wrongfully  suppressed  must  be  regarded  as  material,  if  the 
knowledge  or  ignorance  of  it  would  naturally  influence  the  judg- 
ment of  the  underwriter  in  making  the  contract  at  all,  or  in  esti- 
mating the  degree  and  character  of  the  risk,  or  in  fixing  the  rate 
of  premium." 

There  are  decisions  apparently  to  the  contrary  in  other  juris- 
dictions, but,  as  shown  in  the  opinion  referred  to,  they  were  ren- 
dered usually,  all  of  them  as  far  as  we  have  examined,  in  apply- 
ing statutes  having  a  different  wording  from  ours  and  requiring 
a  more  restrictive  interpretation.  This  being  the  construction  we 
have  put  upon  our  statute — and,  as  the  law  is  now  expressed,  it 
is,  we  think,  undoubtedly  the  correct  construction — the  court  below 
properly  held  that  the  representation  of  the  insured  as  to  having 
been  under  the  care  of  a  physician  within  two  years  was  material 
to  the  contract ;  and,  under  the  facts  and  circumstances  disclosed 
by  the  testimony,  defendant  has  a  right  to  insist  and  the  case  re- 
quires that  there  should  be  a  determinative  finding  on  the  issue 
addressed  to  that  question,  and  this  has  not  been  done.     .     .     . 

New  trial. 

Misrepresentation  is  an  innocent  misstatement  or  non-disclosure  of 
facts,  as  distinguished  from  fraud  which  is  intentional.  If  the  fact  enters 
into  the  contract  so  as  to  hecome  a  material  term,  it  is  a  condition,  and 
may  avoid  the  contract;  if  it  is  a  subsidiary  promise  to  become  responsi- 
ble for  the  truth  of  the  fact,  it  is  a  warranty,  in  the  ordinary  sense,  and 
is  a  ground  for  action  for  damages;  if  the  parties  stand  in  some  relation 
so  that  one  must  depend  upon  the  other  for  the  information,  the  utmost 
good  faith  (  uberrima  fides )  is  required,  and  a  misrepresentation  may 
avoid  the  contract.  In  insurance  contracts,  this  was  generally  called 
warranty,  and  its  effect  was  to  avoid  the  contract,  whether  material  or 
not.  16  Am.  &  Eng.  Encyc,  920  ct  seq.;  Clark  Cont.,  208  et  seq.;  but  this 
has  been  changed  by  the  statute  above  cited.  Except  as  a  condition  or 
warranty,  and  in  contracts  uberrimae  fidei,  misrepresentation  did  not 
affect  a  contract  at  law.  but  it  might  be  ground  for  relief  in  equity.  In 
this  respect  it  belongs  more  properly  under  the  head  of  fraud,  in  the 
general   sense   that   an   inequitable   or   unjust   result   would   be   produced. 

Insurance  contracts  are  usually  classed  under  the  bead  of  uberrima 
fides,  but  under  the  statute  they  belong  in  respect  to  the  representation, 
under  fraud ;  so  as  to  confidential  relations  generally  which  are  treated 
under  constructive  fraud. 

Other  cases  on  the  same  doctrine  in  insurance.  McCarty  v.  Ins.  Co., 
126—820;  Hayes  v.  Ins.  Co.,  132—702;  Grabbs  v.  Ins.  Co.,  125—389;  Ber- 
geron  v.  Ins.  Co.,  Ill — 45:  but  where  there  is  fraud  on  the  part  of  the 
agent  and  the  insured,  the  policy  is  void.  Sprinkle  v.  Ins.  Co.,  124—405. 
126—678;  Cuthbertson  v.  Ins.  Co.,  96—480;  Mace  v.  Ins.  Co.,  101— p.  133; 
Sugg  v.  Ins.  Co.,  98—143;  Bobbin  v.  Ins.  Co.,  66—70,  gives  the  rule  of 
utmost  good  faith.  Fishblate  v.  Ins.  Co..  140 — 589,  sustains  the  rule  in  the 
principal  case,  and  also  holds  that  a  clause  in  the  policy  that  "no  notice  or 
knowledge  of  the  agent  or  any  other  person  shall  be  held  to  effect  a 
waiver   or   cbange   in   this   contract   or   any  part   of   it,"   is   void.      Alexander 


REALITY   OF    CONSENT.      FRAUD.  317 

v.  Ins.  Co.,  150 — 536:  Gardner  v.  Ins.  Co.,  163—367:  Schas  v.  Ins.  Co., 
166—55:  Lummus  v.  Ins.  Co.,  167—654;  Bates  v.  Hewitt.  L.  R..  2  Q.  B., 
595,  6  E.  R.   C,  817. 

The  doctrine  of  uberrima  fides  has  sometimes  heen  applied  to  sale-,  ol 
land,  but  in  this  State  the  purchaser  must  protect  himself  in  the  absence 
of  fraud.  Woodbury  v.  Evans,  122—779.  It  has  also  been  applied  to 
contracts  with  promoters  of  a  corporation,  but  that  seems  to  be  consid- 
ered under  fraud  in  this  State.  Gaines  v.  Mc. Mister,  122—340:  Austin  v. 
Murdock,   127—454. 

Equitable  estoppel. — Misrepresentation  may  operate  as  an  estoppel. 
Bisp.  Eq.,  424:  Saunderson  v.  Ballance,  57—54.  This  doctrine  is  based  on 
fraud,  Devereux  v.  Burgwyn,  40—351  :  and  was  first  applied  in  equity  and 
afterwards  adopted  in  law  by  making  an  innocent  misrepresentation  of  a 
material  fact  avoid  a  contract,  either  on  the  ground  of  mistake,  or  iegal 
fraud,  or  condition.  1  Page  Cont.,  sec.  153.  In  West  v.  Tilghman.  31- 
163,  it  was  held  that  this  estoppel  did  not  apply  at  law,  further  than  that 
it  might  be  evidence  that  the  party  had  parted  with  his  interest;  and  in 
the  same  case,  43—183,  it  was  held  that  it  did  not  apply  in  equity,  where 
the  party  was  ignorant  of  his  title.  Jones  v.  Sasser,  18—452.  The  rule  of 
estoppel  in  {^ais  is,  that  where  a  man  so  conducts  himself  as  to  lead  a 
reasonable  man  to  believe  that  a  certain  state  of  facts  exists,  and  to 
act  upon  such  belief  to  his  injury,  the  former  will  be  estopped  to  deny 
the  existence  of  such  facts.  Rainey  v.  Hines,  120—376;  Shattuck  v.  Con- 
lev.  119—292:  Morris  v.  Herndon,  113—236;  Bishop  v.  Minton,  112—524; 
Bovden  v.  Clark,  109—664.  The  requisites  of  such  estoppel  are,  (1)  the 
defendant  must  know  his  title;  (2)  the  plaintiff  did  not  know  and  relied  on 
defendant's  representation:  (3)  the  plaintiff  was  deceived  to  his  injury. 
Holmes  v.  Crowell,  73—613;  Loftin  v.  Crossland,  94— p.  83;  Exum  v. 
Cogdell,  74—139;  Mason  v.  Williams,  66—564;  Estis  v.  Jackson,  111— 
149;  Lumber  Co.  v.  Price,  144-50.  See  Bisph.  Eq.,  sees.  282—294:  11  Am. 
&  Eng.   Encyc,  421  et  seq. 

Sec.  3.  Fraud. 

1.  Elements  of  actual  fraud. 

(129)   WALSH  v.  HALL, 

66  X.  C,  233—1872. 

This  was  a  civil  action  for  the  recovery  of  a  horse  which  had 
returned  to  and  been  detained  by  the  defendant.  The  defendant 
set  up  fraud  in  his  answer,  and  the  plaintiff  demurred,  the  court 
sustained  the  demurrer,  and  the  defendant  appealed. 

Dick,  J-  This  is  a  civil  action,  in  the  nature  of  an  action  of 
detinue,  to  recover  a  horse  from  the  defendant. 

The  defendant  filed  an  answer,  controverting  some  of  the  alle- 
gations of  the  complaint,  and  made  a  statement  of  new  matter, 
which,  he  insisted,  constituted  a  counterclaim  to  the  plaintiff's 
cause  of  action.  The  plaintiff  demurred,  and  thereby  admitted 
the  truth  of  the  defendant's  statement  of  new  matter,  and  we 
must  consider  whether  the  admitted  facts  constitute  a  good  coun- 
terclaim in  this  action. 

The  defendant  alleges  that  he  was  the  owner  of  the  horse  in 
controversy,  and  exchanged  it  with  the  plaintiff  for  a  certain  tract 


318  FORMATION    OF    CONTRACT. 

of  land,  which  the  plaintiff  wilfully  and  falsely  represented  as 
being  contiguous  to  the  land  of  the  defendant — that  he  was  very 
desirous  of  obtaining  a  certain  adjoining  tract  of  land,  and  this 
desire  of  the  defendant  was  known  to  the  plaintiff,  and  was  a  ma- 
terial inducement  to  an  exchange  of  property ;  that  the  land  is  not 
adjoining,  and  this  fact  was  well  known  to  the  plaintiff;  and  thus 
the  horse  was  obtained  by  actual  fraud  from  the  defendant,  and 
he  asks  that  the  contract  may  be  rescinded.  This  new  matter  set 
up  by  the  defendant,  is  connected  with,  and  forms  a  material  part 
of  the  contract,  out  of  which  this  cause  of  action  arose,  and  con- 
stitutes a  proper  counterclaim;  and  we  must  consider  whether  he 
is  entitled  to  the  relief  which  he  demands. 

The  maxim  of  caveat  emptor  is  a  rule  of  common  law,  applica- 
ble to  contracts  of  purchase  of  both  real  and  personal  property, 
and  is  adhered  to,  both  in  courts  of  law  and  courts  of  equity, 
where  there  is  no  fraud  in  the  transaction.  Where  land  has  been 
sold,  and  a  deed  of  conveyance  has  been  duly  delivered,  the  con- 
tract becomes  executed,  and  the  parties  are  governed  by  its  terms, 
and  the  purchaser's  only  right  of  relief,  either  at  law  or  in  equity, 
for  defects  or  encumbrances,  depend,  in  the  absence  of  fraud, 
solely  upon  the  covenants  in  the  deed  which  he  has  received. 
Rawle  on  Covenants  for  Title,  459. 

If  the  purchaser  has  received  no  covenants,  and  there  is  no 
fraud  vitiating  the  transaction,  he  has  no  relief  for  defects  or  en- 
cumbrances against  his  vendor,  for  it  was  his  own  folly  to  accept 
such  a  deed,  when  he  had  it  in  his  power  to  protect  himself  by 
proper  covenants. 

But  in  cases  of  positive  fraud  a  different  rule  applies.  The  law 
presumes  that  men  will  act  honestly  in  their  business  transactions, 
and  the  maxim  of  vigilantibus  non  dormientibus  jura  subveniunt 
only  requires  persons  to  use  reasonable  diligence  to  guard  against 
fraud ;  such  diligence  as  prudent  men  usually  exercise  under  sim- 
ilar circumstances.  In  contracts  for  the  sale  of  land,  purchasers 
usually  guard  themselves  against  defects  of  title,  quantity,  encum- 
brances and  disturbance  of  possession  by  proper  covenants ;  and  if 
they  do  not  use  these  reasonable  precautions,  the  law  will  not  af- 
ford them  a  remedy  for  damages  sustained,  which  were  the  con- 
sequences of  their  own  negligence  and  indiscretion. 

But  the  law  does  not  require  a  prudent  man  to  deal  with  every- 
one as  a  rascal,  and  demand  covenants  to  guard  against  the  false- 
hood of  every  representation,  which  may  be  made,  as  to  facts 
which  constitute  material  inducements  to  a  contract.  There  must 
be  a  reasonable  reliance  upon  the  integrity  of  men,  or  the  transac- 
tions of  business,  trade  and  commerce  could  not  be  conducted  with 
that   facility  and  confidence  which   are  essential  to  successful  en- 


REALITY    OF    CONSENT.       FRAUD.  319 

terprise,  and  the  advancement  of  individual  and  national  wealth 
and  prosperity.  The  rules  of  law  are  founded  on  natural  reason 
and  justice,  and  are  shaped  by  the  wisdom  of  human  experience, 
and  upon  subjects  like  the  one  we  are  considering,  they  are  well 
defined  and  settled. 

If  representations  are  made  by  one  party  to  a  trade  which  may 
be  reasonably  relied  upon  by  the  other  party — and  they  constitute 
a  material  inducement  to  the  contract — and  such  representations 
are  false  within  the  knowledge  of  the  party  making  them — and 
they  cause  loss  and  damage  to  the  party  relying  on  them,  and  he 
has  acted  with  ordinary  prudence  in  the  matter,  he  is  entitled  to 
relief  in  any  court  of  justice. 

In  our  courts  the  injured  party  may  bring  a  civil  action  in  the 
nature  of  an  action  on  the  case  for  deceit,  and  recover  the  dam- 
ages which  he  has  sustained ;  and  if  this  remedy  will  not  afford 
adequate  relief  he  may  invoke  the  equitable  jurisdiction  of  the 
court  to  rescind  the  contract  and  place  the  parties  in  statu  quo. 

No  specific  rule  can  be  laid  down  as  to  what  false  representa- 
tions will  constitute  fraud,  as  this  depends  upon  the  particular 
facts  which  have  occurred  in  each  case,  the  relative  situation  of 
the  parties  and  their  means  of  information.  Examples  are  given 
in  the  books  which  have  established  some  general  principles  which 
will  apply  to  most  cases  that  may  arise.  If  the  falsehood  of  the 
misrepresentation  is  patent,  and  a  party  accepts  and  acts  upon  it 
with  "his  eyes  open,"  he  has  no  right  to  complain.  If  the  par- 
ties have  equal  means  of  information,  the  rule  of  caveat  emptor 
applies,  and  an  injured  party  can  not  have  redress,  if  he  fail  to 
avail  himself  of  the  sources  of  information  which  he  may  easily 
reach,  unless  he  has  been  prevented  from  making  proper  inquiry, 
by  some  artifice  or  contrivance  of  the  other  party.  Where  the 
false  representation  is  a  mere  expression  of  commendation,  or  is 
simply  a  matter  of  opinion,  the  parties  stand  upon  an  equal  foot- 
ing and  the  courts  will  not  interfere  to  correct  errors  of  judgment. 
Where  a  matter,  which  forms  a  material  inducement,  is  peculiarly 
within  the  knowledge  of  one  of  the  parties  and  he  makes  a  false 
representation  as  to  that  fact,  and  the  other  party,  having  no  rea- 
son to  suspect  fraud,  acts  upon  such  statement  and  suffers  damage 
and  loss,  he  is  entitled  to  relief.  Whenever  fraud  and  damage  go 
together  the  courts  will  give  a  remedy  to  the  injured  party. 
Broom's  Legal  Maxims,  739;  Adams  Equity,  176;  Story's  Eq. 
Juris.,  chap.  6;  Atwood  v.  Small,  6  Ck.  &  Fin.,  232;  Chitty  on 
Cont,  681 ;  Broom's  Com.,  347. 

The  courts  must  determine  questions  of  fraud  arising  upon  as- 
certained  facts,   and  although  the  principles  of  law  are  well   de- 


320  FORMATION    OF    CONTRACT. 

fined  and  settled,  errors  in  their  application  have  produced  some 
conflict  in  adjudicated  cases. 

We  will  now  proceed  to  apply  the  principles  of  law  to  the  facts 
admitted  in  the  pleadings  in  the  case  before  us,  and  then  briefly 
review  the  previous  cases  which  have  been  decided  in  this  State 
upon  a  state  of  facts  somewhat  similar. 

It  appears  that  the  defendant  resided  on  Elk  Creek,  and  was 
very  desirous  of  obtaining  a  certain  tract  of  adjoining  land.  The 
plaintiff  knew  this  fact  and  pretended  to  own  said  land,  and  of- 
fered to  exchange  it  with  the  defendant  for  the  horse  in  contro- 
versy. The  defendant  at  first  refused  to  make  the  exchange  for 
the  reason  that  one  Hendricks  claimed  the  land. 

The  plaintiff  then  positively  asserted  that  he  was  the  owner, 
and  had  purchased  the  land  from  Witherspoon,  and  had  a  deed, 
and  that  Hendricks  had  no  claim  whatever,  as  he  (plaintiff)  had 
been  in  the  actual  possession  and  cultivation  of  the  land,  under 
his  (Witherspoon's)  deed,  for  more  than  seven  years.  This  deed 
was  produced,  and  it  purported  to  convey  a  tract  of  land  on  Elk 
Creek  ;  and  the  plaintiff  asserted  that  he  had  been  in  the  actual  use 
and  occupation  of  the  land  which  he  proposed  to  sell,  for  several 
years. 

Upon  these  representations,  which  were  positively  made,  and 
frequently  asserted,  the  defendant  exchanged  the  horse  for  the 
land,  and  received  a  deed  describing  the  land  as  lying  on  the 
waters  of  Elk  Creek.  The  deed  was  written  by  a  nephew  of  the 
plaintiff,  who  kept  the  deeds  of  his  uncle,  and  was  present  during 
the  negotiations  for  the  trade. 

The  defendant  alleges  that  he  has  discovered  that  the  land 
which  he  thought  he  was  purchasing  belongs  to  another  person, 
and  that  the  deed  which  he  received  covers  an  adjoining  tract ;  and 
that  the  plaintiff  well  knew  these  facts  at  the  time  he  executed 
the  deed,  and  that  his  representations  were  false  and  fraudulent. 

So  it  appears  that  the  plaintiff,  by  false  representation  about  a 
matter,  which  was  a  material  inducement  to  the  contract — and 
which  was  false  within  his  knowledge — obtained  the  horse  of  the 
defendant.  The  circumstances  attending  the  trade  were  such  as 
to  induce  a  reasonable  reliance  upon  the  truth  of  the  statements 
of  the  plaintiff,  and  the  defendant  neglected  no  precaution  but  a 
survey,  in  guarding  himself  against  fraud. 

The  transaction  was  like  hundreds  of  others  in  the  country, 
which  are  entirely  fair  and  honest,  and  we  do  not  regard  the  want 
of  a  survey  as  laches  on  the  part  of  the  defendant.  A  large  major- 
ity of  the  sales  of  land,  in  the  State,  are  completed  by  the  delivery 
of  a  deed,  copied  from  some  previous  deed,  and  surveys  are  not 
generally  made,  unless  there  is  some  dispute  about  the  boundaries. 


REALITY    OF    CONSENT.       FRAUD.  321 

Where  the  grantor  has  heen  in  the  possession  of  land  for  a  num- 
ber of  years,  exercising  acts  of  ownership,  his  positive  assertion  as 
to  location  may  be  reasonably  relied  upon  without  a  survey. 

In  the  case  of  McFerran  v.  Taylor,  3  Cranch,  270,  Chief  Justice 
Marshall  says:  "He  who  sells  property  on  a  description  given 
by  himself,  is  bound  to  make  good  that  description;  and  if  it  be 
untrue  in  a  material  point,  although  the  variance  be  occasioned  by 
a  mistake,  he  must  still  remain  liable  for  that  variance.  In  this 
case  the  defendant  has  sold  land  on  Hingston,  and  offers  land  on 
Slate.  He  has  sold  that  which  he  can  not  convey,  and  as  he  can 
not  execute  his  contract  he  must  answer  in  damages." 

If  such  a  contract  was  made  by  fraudulent  representations,  a 
court  of  equity  would  not  hesitate  to  rescind  the  contract. 

In  our  case  the  plaintiff  is  insolvent,  and  prosecutes  his  unjust 
claim  in  forma  pauperis,  and  the  defendant  would  be  without  a 
speedy  and  substantial  remedy  against  this  gross  fraud,  but  for 
the  wise  and  beneficent  provisions  of  our  Code,  which  blend  in 
one  system,  legal  and  equitable  remedies. 

From  the  facts  admitted,  we  think  the  defendant  is  entitled  to 
a  rescission  of  his  contract  with  the  plaintiff,  and  to  retain  posses- 
sion of  the  horse  sued  for. 

We  also  think  that  the  defendant  might  have  sustained  a  civil 
action  to  recover  damages  occasioned  by  the  fraudulent  represen- 
tations of  the  plaintiff,  although  this  opinion  seems  to  be  in  con- 
flict with  previous  decisions  of  this  court. 

The  case  of  Fagan  v.  Newsom,  12  N.  C,  20,  was  the  first  case 
upon  this   subject,  and  was  correctly  decided.     The  plaintiff   had 
repudiated    the    executory    contract,    which    was    induced^  by    the 
fraudulent  representations  of  the  defendant,  and  had  suffered  no 
damage  but  the  loss  of  a  good  bargain,  and  he  could  have  easily 
recovered   his   purchase-money   by   an   action   of    assumpsit.      The 
principles  for  which  we  are  contending  are  distinctly  stated  in  that 
case,  "the  plaintiff  can  not  recover  in  an  action  of  deceit,  unless 
he  proves  not  only  that  a  fraud  has  been  committed  by  the  defend- 
ant, but  also  that  it  has  occasioned  loss  and  damage  to  the  plain- 
tiff."    Chief  Justice  Taylor  says  further:     "It  is  a  very  reasonable 
principle  that  the  purchaser  should  not  be  entitled  to  an  action  of 
deceit,   if   he  may   readily   inform   himself   as   to   the  truth   of   the 
facts  which  are  misrepresented.     In  this  case,  the  plaintiff  knew 
that  the  defendant  had  no  title  to  the  bottom  land,  and  that  it  was 
the  property  and  in  the  possession  of  another."     He  acted  with  a 
full  knowledge  of  the  falsity  of  the  representation  and  sustained 
no  damage,  and  of  course  was  not  entitled  to  maintain  his  action. 
In  contracts  of  this  character,  fraud  without  damage,  or  damage 
without  fraud,  is  not  usually  the  subject  of  an  action   for  deceit. 


322  FORMATION    OF    CONTRACT. 

In  Saunders  v.  Hatterman,  24  N.  C,  32,  the  fraud  complained 
of  consisted  in  a  false  affirmation  of  the  value  of  the  land  sold. 
This  was  a  matter  of  opinion  and  judgment,  and  the  plaintiff 
could  easily  have  obtained  correct  information,  and  his  damage 
was  the  result  of  his  own  negligence  and  indiscretion. 

The  rules  of  law  are  correctly  laid  down  as  to  when  an  action 
of  deceit  can  be  sustained,  and  they  are  in  accordance  with  the 
principles  which  we  have  above  stated.  Lytle  v.  Bird,  48  N.  C, 
222,  and  Credle  v.  Swindell,  63  N.  C,  305,  are  founded  upon  the 
cases  above  referred  to,  but  in  our  opinion  the  principles  of  law 
are  not  correctly  applied  to  the  statement  of  facts. 

For  the  reasons  above  given,  we  think  that  a  purchaser  of  land 
is  not  required,  in  order  to  guard  against  the  fraudulent  represen- 
tations of  a  vendor,  to  have  a  survey  made,  unless  some  third  per- 
son is  in  possession  claiming  title ;  or  there  is  some  dispute  about 
boundary,  or  as  to  the  true  location,  or  he  has  received  some  in- 
formation which  would  reasonably  induce  him  to  suspect  fraud. 
The  general  custom  of  conveying  land,  according  to  old  deeds  and 
without  a  survey,  is  sufficiently  established  to  be  reasonably  relied 
on  by  a  purchaser,  as  to  description  of  location  and  boundary. 

The  location  by  a  survey  is  a  matter  of  science  and  skill,  and 
competent  surveyors  are  not  easily  obtained,  and  an  unskillful  sur- 
veyor is  as  apt  to  mislead  as  he  is  to  give  correct  information. 

The  demurrer  to  the  answer  must  be  overruled,  and  the  defend- 
and  is  entitled  to  have  the  contract  rescinded,  unless  His  Honor  in 
the  court  below  shall,  in  the  exercise  of  his  discretion,  allow  the 
plaintiff  to  reply  to  the  answer,  etc.  C.  C.  P.,  sec.  131.  Let  this 
be  certified  Judgment  reversed. 

Fraud  applies  to  sales  of  both  real  and  personal  property.  May  v. 
Loomis,  140 — p.  356:  Gatling  v.  Harrell.  108— -485.  For  a  discussion  of 
fraud  growing  out  of  words  and  acts,  with  numerous  cases  as  illustrations, 
see  opinion  by  Battle,  J.,  in  March  v.  Wilson,  44 — 143:  Grav  v.  Jenkins, 
151—80;  Stewart  v.  Realtv  Co.,  159—230:  Pate  v.  Blades,  163—267;  Dawe 
v.  Morris,  149  Mass.,  188.  21  N.  E.,  313.  4  L.  R.  A.,  158;  Paslev  v.  Free- 
man. 3  T.  R..  51,  12  E.  R.  C,  235:  Derrv  v.  Peek,  14  App.  Cas.,  337,  12 
]•.  R.  C.  250:  20  Cyc,   12;   Robertson  v.   Halton,   156—215. 

2.  Nondisclosure  or  mere  silence. 

(130)    BROWN   v.   GRAY, 

51   X.  C.  103,  72  A.   D.,  563—1858. 

Action  on  the  case  for  deceit  in  the  sale  of  a  slave.  The  plain- 
tiff proved  the  sale  by  a  bill  of  sale  to  him  from  the  defendants. 
There  was  no  evidence  of  what  took  place  at  the  sale,  except  that 
it  was  by  public  auction.  It  was  proved  that  the  slave  was  un- 
sound at  the  time  of  the  sale,  and  that  the  defendants  knew  it. 


KEAUTV    OF    CONSENT.       FRAUD.  323 

The  defendants'  counsel  contended  that,  admitting  these  facts,  the 
plaintiff  could  not  recover,  for  that,  in  order  to  charge  the  defend- 
ants he  must  prove  either  that  the  defendants  at  the  time  of  the 
sale  made  fraudulent  misrepresentations  or  resorted  to  some  de- 
vice, by  which  to  conceal  the  unsoundness  of  the  slave;  and  he 
prayed  the  court  so  to  instruct  the  jury.  The  court  refused  to 
give  the  instructions  prayed,  but  charged  the  jury,  that  upon  the 
facts  above  stated,  the  plaintiff  was  entitled  to  recover.  Verdict 
and  judgment  for  the  plaintiff,  and  appeal  by  the  defendants. 

Pfarson,  C.  J.  In  the  sale  of  a  chattel,  the  rule  of  our  law 
is  caveat  emptor,  and  if  the  thing  be  unsound,  to  entitle  the  pur- 
chaser to  maintain  an  action,  he  must  prove,  either  a  warranty  of 
soundness,  or  a  deceit. 

In  regard  to  deceit,  the  distinction  is :  where  the  unsoundness  is 
patent,  that  is,  such  as  may  be  discovered  by  the  exercise  of  ordi- 
nary diligence,  mere  silence,  on  the  part  of  the  vendor,  is  not  suffi- 
cient to  establish  the  deceit,  although  he  knows  of  the  unsound- 
ness, because  the  thing  speaks  for  itself,  and  it  is  the  folly  of  the 
purchaser  not  to  attend  to  it.  So  that,  in  such  a  case  he  will  not 
be  heard  to  say,  he  was  deceived,  unless  the  vendor  made  a  false 
statement,  or  resorted  to  some  artifice,  in  order  to  prevent  an  ex- 
amination, or  to  hide  the  unsoundness,  so  as  to  make  the  exam- 
ination of  no  avail. 

Where  the  unsoundness  is  latent,  that  is,  such  as  could  not  be 
discovered  by  the  exercise  of  ordinary  diligence,  mere  silence,  on 
the  part  of  the  vendor,  is  sufficient  to  establish  the  deceit,  provided 
he  knows  of  the  unsoundness ;  for,  as  the  thing  is  not  what  it  ap- 
pears to  be,  and  diligence  does  not  enable  the  purchaser  to  dis- 
cover its  unsoundness,  he  is  deceived,  unless  the  fact  is  disclosed; 
so  that,  in  such  a  case,  without  what  the  law  considers  laches  on 
the  part  of  the  purchaser,  the  deceit  is  accomplished  by  the  sup- 
pressio  veri. 

The  first  proposition  ;  that,  in  regard  to  a  patent  unsoundness, 
to  make  out  a  deceit  there  must  be  proof  of  the  scienter  and  a 
suggestio  falsi,  is  conceded  on  all  hands. 

The  second,  that  in  respect  to  a  latent  unsoundness,  proof  of 
the  scienter  and  a  suppressio  veri,  will  be  sufficient,  we  consider 
equally  well  settled,  by  the  reason  of  the  thing,  and  by  the  cases  in 
our  courts;  Cobb  v.Fogleman,  23  N.  C,  440;  Case  v.  Edney, 
26  N.  C,  93.  The  former  was  for  a  deceit  in  the  sale  of  a  female 
slave — wno  had  a  latent  disease — cancer  in  the  womb,  but  at  the 
time  of  the  sale  was  a  stout,  vigorous-looking  woman.  The  de- 
fendant was  silent  in  respect  to  her  disease.  The  judge,  in  the 
court  below,  instructed  the  jury,  that  to  entitle  the  plaintiff  to  re- 
cover, he  must  prove:  1st,  that  the  unsoundness  existed  at  the  time 


324  FORMATION    OF    CONTRACT. 

of  the  sale;  2d,  that  the  defendant  knew  of,  or  had  reason  to  be- 
lieve  its  existence ;  3d,  hut  if  these  facts  were  proved,  if  the  plain- 
tiff also  knew  of  the  unsoundness,  or  had  reason  to  believe  it,  he 
could  not  recover,  and  then  instructed  the  jury,  that  there  was  no 
evidence  on  the  last  point.     In  this  court  the  positions  of  law  were 
approved,   and,   indeed,   were   not   called   in   question,   being  taken 
by   the   profession   as   settled ;   and   the   decision   was   put   not    on, 
whether  there  was  evidence  on  the  last  point,  but  on  whether  there 
was  evidence  of  the  scienter  on  the  part  of  the  defendant.     The 
latter  was  for  a  deceit  in  the  sale  of  a  mare  at  auction  by  a  trus- 
tee.    The  mare  had  a  latent  unsoundness,  although  on  the  day  of 
sale  she  appeared  to  be  well.     The  defendant,  Marvill  Edney,  the 
maker  of  the  trust,  was  "present  at  the  sale,  but  took  no  part  in  it, 
and  said  nothing,  one  way  or  the  other,  as  to  the  property."  There 
was  proof  that  he  knew  of  the  unsoundness.     The  evidence  was 
contradictory  as  to  the  scienter  on  the  part  of  the  other  defendant, 
the  trustee.     The  judge,  in  the  court  below,  held  "that  as  the  legal 
title  had  passed  out  of  the  defendant,  Marvill,  he  was  not  account- 
able as  an  owner  would  be,  who  procured  an  auctioneer  to  cry  his 
property,   and   stood  by  in   silence."     As   to   the   other   defendant, 
the  court  charged  that,   "although  he  acted  as  trustee  in  making 
the  sale,  yet,  like  all  other  persons  who  sold,  he  was  bound  to  act 
honestly,  and  to  disclose  defects  if  he  believed  them  to  exist.     It 
was  then   left  to   the   jury,  whether  the   mare   was   unsound,   and 
whether  the  defendant  knew  it, — if   so,   as  lie  failed  to  state   the 
circumstances,  he  was  liable  in  damages."     In  this  court  the  posi- 
tions of  law,  in  reference  to  the  deceit,  were  approved,  but  it  was 
held  that   the   defendant,    Marvill   Edney,   although   the   legal   title 
passed  out  of  him,  was  liable  for  the  deceit.     In  the  conclusion  of 
the  opinion,   the  court   say:     "It  will  not  be   understood  that  we 
think  the  mere  silence  of  a  debtor,  whose  property  is  sold  under 
execution,  would  amount  to  a   fraud;   for  that  is  a  proceeding  in 
invitum;  the  sale  is  exclusively  the  act  of  the  law." 

Nothing  could  show  more  conclusively  that  this  doctrine  was 
considered  as  settled,  both  by  our  courts  and  the  profession,  than 
the  manner  in  which  it  is  treated  in  these  cases ;  and  after  the 
elaborate  argument  of  Mr.  Boyden,  we  are  satisfied  that  it  is  sus- 
tained by  the  weight  of  authority.  The  class  of  cases,  Mellish  v. 
Matteux,  Peake  N.  P.,  115;  Bagrehole  v.  Watters,  3  Camp.  Rep., 
154;  Pickering  v.  Dawson,  4  Taunton,  779,  etc.,  where  the  prop- 
erty was  sold  "with  all  faults,"  is  not  in  point.  Nor  the  class  of 
cases,  Laidlaw  v.  Organ,  2  Wheat.,  178;  Bench  v.  Sheldon,  14 
Barb.,  66,  etc.,  where  extrinsic  circumstances,  affecting  the  price 
of  the  article  exist,  but  in  regard  to  which,  the  means  of  intelli- 
gence are  equally  accessible  to  both  parties,  such  as  the  conclusion 


KKAUTY    OF    CONSENT.      FRAUD.  M5 

of  peace  in  1815,  between  England  and  the  United  States,  and  the 
passages  to  be  met  with  in  some  of  the  best  writers,  which  seem  to 
conflict,  are  all  to  be  attributed  to  the  fact,  that  the  distinction  be- 
tween a  patent  and  a  latent  unsoundness  in  the  thing,  was  not  kept 
in  view.  These  questions  of  law  present  no  difficulty,  and  from 
the  manner  in  which  the  statement  of  the  case  is  made  up,  upon 
the  defendant's  exception,  the  judgment  must  be  affirmed. 

The  defendants'  counsel  contended,  "that  admitting  that  the 
slave  was  unsound,  and  that  the  defendant  knew  it,  the  plaintiff 
could  not  recover,  for  that,  in  order  to  charge  the  defendants,  he 
must  prove,  either  that  they  made  fraudulent  misrepresentations, 
or  resorted  to  some  device  by  which  to  conceal  the  unsoundness," 
and  prayed  the  court  so  to  instruct  the  jury. 

This  proposition  is  not  true  in  its  generality.  If  the  unsound- 
ness was  patent  it  is  true.  If  the  unsoundness  was  latent  it  is 
not  true.  The  case  does  not  show  whether  it  was  patent  or  latent, 
and  it  follows  that  it  was  not  error  to  refuse  to  give  the  instruc- 
tion prayed  for.  In  other  words,  it  does  not  appear  from  the  de- 
fendants' exception  whether  the  court  below  erred  or  not ;  there- 
fore, there  is  no  ground  upon  which  this  court  can  reverse  the 
judgment.  Judgment  affirmed. 

If  a  seller  is  aware  of  a  defect  and  fraudulently  conceals  it,  or  it  be 
such  a  defect  as  the  buyer  has  no  means  of  discovering  by  ordinary  dili- 
gence, he  is  liable  in  an  action  for  deceit.  Lunn  v.  Shermer,  93—164. 
"With  all  faults"  means  those  unknown  to  the  vendor,  or  which  the 
vendee  can  not  readily  discover :  but  the  vendor  can  not  make  use  of  any 
artifice  to  prevent  discovery.  Smith  v.  Andrews,  30 — 3.  Caveat  emptor 
and  patent  defect.  Lawson  v.  Baer,  52—461  ;  Whitmire  v.  Heath,  155— 
304;   Bowman  v.  Bates,  2  Bibb,  47,  4  A.  D..  677. 

If  at  execution  sale  the  debtor  remains  silent,  he  is  not  guilty  of  fraud, 
for  the  property  is  sold  as  it  stands,  and  caveat  emptor  applies;  but  if  he 
makes  false  statements  with  regard  to  the  property,  he  is  guilty  of  fraud. 
Erwin  v.  Greenlee,  18—39.  So  if  a  sheriff  says  nothing  about  his  levy  of 
an  execution  on  property,  it  is  not  fraud;  but  otherwise,  if  he  does  or 
says  anything  to  create  a  false  impression.  Wicker  v.  Worthy,  51—500. 
Where  a  trustee  sold  land  as  a  fee,  but  before  making  title  discovered 
that  it  was  onlv  a  life  estate,  failure  to  disclose  this  to  the  purchaser  was 
fraud.  Alston  v.  Outerbridge,  16 — 18.  Where  the  purchaser  knows  there 
is  a  gold  mine  on  a  tract  of  land,  he  is  not  bound  to  disclose  that  fact  to 
the  vendor,  but  it  is  fraud  if  he  is  asked  about  it  and  fails  to  make  it 
known.  Smith  v.  Beatty,  37—456;  Harris  v.  Tyson,  24  Pa.  St.,  347,  64  A. 
D.,  661.  Fraud  in  marriage.  Van  Houten  v.  Morse,  162  Mass.,  414,  38 
N.  E,  705,  26  L.  R.  A.,  430. 

For  further  discussion  of  nondisclosure,  see  2  Kent,  482-491 ;  14  Am. 
&  Eng.  Encvc,  66-84 :  Clark  Cont,  221 ;  2  Pom.  Eq.  Jur.,  sec.  901  :  20 
Cyc,    15. 


326  FORMATION    OF    CONTRACT. 

3.  Material  fact. 

1.    WHAT    IS    MATERIAL. 

(131)   GILMER  v.  HANKS, 
84  X.  C,  317—1881. 

Civil  action  on  a  note.  The  defense  was  that  its  execution  was 
obtained  by  false  and  fraudulent  representations  of  the  plaintiff's 
agent  in  regard  to  the  consideration  on  which  it  was  founded ;  that 
at  a  sale  of  the  estate  of  G.  W.  Hanks  (who  had  been  adjudged  a 
bankrupt  in  Virginia),  by  his  assignee,  one  Jerry  Gilmer,  plain- 
tiff's agent,  represented  to  him  that  the  plaintiff  had  recovered  a 
judgment  against  the  said  bankrupt  in  the  Superior  Court  of 
Surry,  for  about  $200,  which  was  a  lien  upon  his  land,  and  had 
also  proved  the  debt  in  the  bankrupt  court ;  and  upon  such  repre- 
sentation induced  the  defendant  to  buy  the  said  judgment  and  to 
give  his  note  for  $175. 

That  before  the  note  became  due,  he  went  to  Surry  County  and 
there  ascertained  that  there  was  no  such  judgment  against  the 
bankrupt,  but  only  a  note  against  him.  The  jury  found  that  the 
note  was  not  obtained  by  fraud,  and  that  there  was  no  failure  of 
consideration.  There  was  a  judgment  for  the  plaintiff,  and  the 
defendant  appealed. 

Smith,  C.  J.  (After  discussing  the  admissibility  of  certain  evi- 
dence.) The  court  charged  the  jury,  that  a  docketed  judgment  in 
Surry  could  create  no  lien  on  land  in  Virginia  ;  that  a  fraudulent 
representation  to  avoid  a  contract  must  be  of  a  material  matter 
resulting  in  damage,  and  that  the  proof  of  fraud  must  come  from 
the  party  alleging  it,  and  none  had  been  offered  to  show  the  debt 
had  not  been  proved  in  bankruptcy. 

The  exception  is  not  pointed  to  any  particular  part  of  the  in- 
struction, as  according  to  the  practice  it  should,  and  is  general  in 
its  reference.  But  we  see  no  error  in  the  charge  and  it  is  fully 
supported  by  the  authorities. 

The  execution  of  the  note  being  admitted,  the  evidence  to  im- 
peach the  validity  must  be  produced  by  the  defendant.  McLane 
v.  Manning,  60  N.  C,  608.  "All  the  authorities  are  uniform," 
says  a  late  author,  "in  holding  that  in  order  to  sustain  an  allega- 
tion of  fraud  by  false  representation,  the  representation  must  be 
of  some  matter  or  thing  material  to  the  contract  or  transaction 
sought  to  be  avoided  because  of  it."  3  Wait's  Act.  &  Def.,  439. 
The  rule  deducible  from  adjudicated  cases,  he  thus  announces,  "If 
the  fraud  be  such  that  had  it  not  been  practiced,  the  contract 
would  not  have  been  made,  or  the  transaction  completed,  then   it 


REALITY    OF    CONSENT.       FRAUD.  M/ 

is  material;  but  if   it  be  shown  or  made  probable  that   the   same 
thing  would  have  been  done  in  the  same  way,  if  the  fraud  had  not 
been  practiced,  it  can  not  be  deemed  material."     Ibid.,  440. 
The  judgment  must  be  Affirmed. 

False  representation  as  to  the  quantity  of  land  may  be  ground  for 
rescinding  the  contract,  where  quantity  is  material.  Hill  v.  Brower,  76- 
124;  Attv.-Gen.  v.  Carver.  34—231:  Karl  v.  Bryan.  62—278;  Shell  v.  Rose- 
man,  155—90.  Where  the  defendant  is  induced  to  subscribe  for  stock  in  a 
company  upon  the  representation  that  H.  in  whom  he  had  great  con 
hdence,'  was  to  be  a  large  stockholder  and  manager ;  this  was  a  material 
tact,  and  if  misrepresented  would  amount  to  fraud.  Printing  Co.  v.  Mc- 
Aden.  131 — 178.  Where  one  represents  to  an  ignorant  woman  that  a  par- 
tition proceeding  had  been  decided  against  her,  and  thereby  obtains  a  deed 
from  her  at  a  verv  inadequate  price,  it  will  be  set  aside  for  fraud.  Stewart 
v.    Hubkard,    56—186. 

As  to  materiality,  see  14  Am.  &  Eng.  Encyc,  d9-62.  where  it  is  said: 
"The  question  is  not  whether  the  person  to  whom  the  representation  was 
made  deemed  it  material,  but  whether  it  was  in  fact  material."  .Machine 
Co  v  Bullock.  161—1  :  Anderson  v.  Corporation.  155—131  :  Adams  v. 
Gillig.  199  X.  Y..  314.  92  X.  K...  670.  32  L.  R.  A.  (X.  S.).  127.  20  Ann. 
Cas,  913:  Hall  v.  Johnson.  41  Mich..  286,  2  X.  W.,  55;  Kohl  v.  Taylor. 
62  Wash..  678.  114  "Pac.  874.  35  K.  R.  A.  (X.  S.),  176:  Mabardy  v.  Mc- 
Hugh.  202  Mass.,  14?.  88  X.  E.,  894,  16  Ann.  Cas.,  502:  20  Cyc.  23. 

2.    MISREPRESENTING  INTENTION. 

(132)  HILL  v.  GETTY  S. 

135  X.  C.  373.  47  S.  E..  449—1904. 

This  was  an  action  to  set  aside  a  mortgage  for  fraud.  Plain- 
tiff's husband  owed  the  defendant  and  two  others  debts  which 
were  secured  by  mortgage  on  his  land,  and  the  defendant's  mort- 
gage was  subsequent  to  the  others ;  the  defendant  told  the  plaintiff 
that  if  she  would  execute  a  mortgage  on  her  land  to  secure  his 
debt,  he  would  take  up  and  cancel  the  other  two  debts ;  the  plain- 
tiff executed  the  mortgage,  the  defendant  bought  the  other  debts 
and  refused  to  cancel  them.  There  was  a  judgment  for  the  plain- 
tiff, and  defendant  appealed.  Affirmed. 

Connor,  J.  .  .  .  A  false  and  fraudulent  representation  or  prom- 
ise, we  understand  to  be  one  made  with  the  intention  of  the  mind 
of  the  promisor  not  to  perform  the  promise.  This  is  the  misrepre- 
sentation of  a  subsisting  fact,  false  within  the  knowledge  of  the 
party  making  it  and  calculated  to  deceive.  Speakine  of  an  action- 
aide  fraud.  Lord  Bowen  in  Edineton  v.  Fitzminnia.  29  L.  R.  Chan. 
Div..  459.  says  :  "There  must  be  a  misrepresentation  of  a  subsist- 
ing fact;  but  the  state  of  a  man's  mind  is  as  much  of  a  fact  as 
the  state  of  his  digestion.  It  is  true  that  it  is  difficult  to  prove 
what  the  state  of  a  man's  mind  at  a  particular  time  is.  but  if  it 
can  be  ascertained,  it  is  as  much  a  fact  as  anything  else.     A  mis- 


328  FORMATION    OF    CONTRACT. 

statement  as  to  the  state  of  a  man's  mind  is  therefore  a  misstate- 
ment of  a   fact." 

"The  general  rule  in  regard  to  promises  is  that  they  are  without 
the  domain  of  the  law  unless  they  create  a  contract,  breach  of 
which  gives  to  the  injured  party  simply  a  right  of  action  for  dam- 
ages and  not  a  right  to  treat  the  other  party  as  guilty  of  a  fraud. 
But  that  proceeds  upon  the  ground  that  to  fail  to  perform  a 
promise  is  no  indication  that  there  was  fraud  in  the  transaction. 
There  may,  however,  have  been  fraud  in  it ;  and  this  fraud  may 
have  consisted  in  making  a  promise  with  intent  not  to  perform  it. 
To  profess  an  intent  to  do  or  not  to  do,  when  the  party  intends 
the  contrary,  is  as  clear  a  case  of  misrepresentation  and  of  fraud 
as  could  be  made.  A  promise  is  a  solemn  affirmation  of  inten- 
tion as  a  present  fact."  1  Bigelow  on  Fraud,  484.  (The  author 
is  discussing,  of  course,  civil  remedies.) 

"When  a  promise  is  made  with  no  intention  of  performing  it, 
and  for  the  very  purpose  of  accomplishing  a  fraud,  it  is  a  most 
apt  and  effectual  means  to  that  end,  and  the  victim  has  a  remedy 
by  action  or  defense."     Goodwin  v.  Home,  60  N.  H.,  485. 

"The  intent  is  always  a  question  for  the  jury,  and  to  determine 
whether  the  intent  was  fraudulent,  the  jury  have  necessarily  to 
look  to  the  circumstances  connected  with  the  transaction  or  those 
immediately  preceding  or  following  it."  Des  Farges  v.  Pugh,  93 
N.  C,  31,  53  Am.  Rep.,  446. 

We  think  that  for  the  purpose  of  disposing  of  the  motion  for 
nonsuit,  there  was  evidence  proper  to  be  submitted  to  the  jury. 
They  have  found  that  the  promise  was  false  and  fraudulent.  In 
the  absence  of  any  exception  to  His  Honor's  charge,  we  must  as- 
sume that  he  explained  to  them  the  distinction  between  the  failure 
to  perform  a  promise  honestly  made  and  one  made  with  the  pur- 
pose not  to  perform,  which  is  a  fraud  upon  the  party  relying  upon 
it,  as  an  inducement  for  his  action.     .     .     .     Judgment  affirmed. 

It  is  the  misrepresentation  of  intention  as  an  existing  fact,  and  not  a 
mere  intention  as  to  a  future  purpose  or  act  that  constitutes  the  fraud. 
Clark  Cont.,  225;  14  Am.  &  Eng.  Encyc,  47.  To  the  same  effect  a*  the 
above  case,  see  Des  Farges  v.  Pugh.  93 — 31  :  Smith  v.  Voting,  109—224 ; 
Pdake  v.  Blackley,  109—257:  Wilson  v.  White,  SO— 280 ;  Troxler  v.  Build- 
ing Co.,  137—51;  Edwards  v.  Culberson,  111—342  (where  a  woman  ob- 
tained money  from  a  man  bv  promising  to  marrv  him )  :  Rudisill  v. 
Whitener,  146—403:  Cerney  v.  Paxton  &  G.  Co..  78  Neb..  134.  110  V.  W., 
882.  10  L.  R.  A.  (X.  S.).  640:  Miller  v.  Sutliff.  241  111..  521.  89  X.  E..  651, 
24  L.  R.  A.  (X.  S.).  735:  Gillespie  v.  Piles  &  Co..  178  Fed.,  886.  44  L. 
R.  A.  (X.  S .).  1:  Sallies  v  fohnson.  85  Conn  77.  81  Atl.,  974,  Ann.  Cas.. 
1913  A.  388;  Donaldson  v.  Farwell,  93  U.  S„  631. 


REALITY    OF    CONSENT.      FRAUD.  329 


3.    OPINION. 

(133)   CASH  REGISTER  CO.  v.  TOWNSEND, 

137   X.   C,  652,   50  S.   E.,  306,   70  L.   R.    A..  349—1905. 

Civil  action  to  recover  balance  due  on  the  price  of  a  cash  regis- 
ter ;  judgment  for  plaintiff  for  $325,  and  plaintiff  appealed. 

Brown,  J.  It  is  unnecessary  to  consider  the  hfty-three  excep- 
tions in  the  record.  The  plaintiff  requested  the  court  to  charge 
that  upon  the  whole  evidence  the  plaintiff  is  entitled  to  recover  of 
the  defendant  the  sum  of  $480.  We  are  of  opinion  that  such  in- 
struction should  have  been  given,  or  rather  that  at  the  close  of  the 
evidence,  with  the  admissions  of  the  parties,  such  should  have  been 
the  judgment  of  the  court.  It  is  admitted  that  the  defendant  pur- 
chased the  cash  register  at  the  price  of  $505,  and  that  he  paid  $25 
on  it ;  that  the  same  was  delivered  to  him,  and  there  is  no  claim 
made  of  any  defect  in  the  mechanical  construction  of  the  machine. 
The  defendant  signed  a  written  contract  securing  the  purchase  of 
the  machine  and  stipulating  the  dates  of  payment.  The  defendant 
sets  up  an  equitable  defense,  that  the  execution  of  the  contract  was 
induced  by  the  false  and  fraudulent  representations  and  deceit  of 
the  plaintiff's  agent  who  sold  him  the  machine,  and  asks  for  a 
rescission  and  cancellation  of  the  contract.  The  burden  of  proof 
is  therefore  upon  the  defendant  to  establish  such  allegations  by  a 
preponderance  of  the  evidence,  and  failing  to  do  so,  the  plaintiff 
is  entitled  to  judgment  for  the  balance  due  upon  the  contract  price. 

The  allegations  relating  to  deceit  and  fraud  in  the  answer 
charge  that  the  agent  of  the  plaintiff  stated  to  the  defendant  that 
the  use  of  the  cash  register  would  save  the  expense  of  a  book- 
keeper ;  that  the  books  could  be  kept  upon  the  machine,  and  that 
it  would  not  take  half  the  time  to  keep  the  defendant's  books  as 
was  required  without  a  machine,  and  that  it  would  save  half  of 
one  clerk's  time,  and  that  the  machine  could  be  operated  by  a  per- 
son of  ordinary  intelligence.  We  note  that  the  answer  fails  to  al- 
lege that  such  representations  were  not  only  false,  but  were  known 
by  the  agent  to  be  false,  or,  not  knowing  them  to  be  true,  he  made 
them  with  a  wrongful  and  fraudulent  intent,  or  with  reckless  or 
wanton  disregard  of  the  truth.  For  such  omission  the  court  might 
well  have  rendered  judgment  upon  the  pleading's.  But  as  the  case 
was  tried  before  the  jury,  we  have  considered  it  as  if  such  neces- 
sarv  averments  were  in  the  answer! 

The  material  elements  of  fraud,  as  laid  down  by  the  text-writers, 
are,  first,  misrepresentation  or  concealment ;  second,  an  intention 
to  deceive,  or  negligence  in  uttering  falsehoods  with  intent  to  in- 


330  FORMATION    OF    CONTRACT. 

fluence  the  action  of  others;  and  third,  the  success  of  the  deceit  in 
influencing  the  action  of  the  other  party.  To  constitute  legal  fraud, 
which  will  warrant  the  rescission  of  a  contract,  there  must  be  a 
false  representation  of  a  material  fact.  There  are  cases  in  the 
books  where  courts  of  equity  have  afforded  relief  from  the  conse- 
quences of  innocent  misrepresentation.  Contracts  induced  thereby 
have,  in  some  instances  and  under  peculiar  circumstances,  been  set 
aside;  but  in  all  the  cases  the  misrepresentation  was  of  a  material 
and  subsisting  fact.  No  particular  rule  can  be  laid  down  as  to 
what  false  representation  will  constitute  fraud,  as  this  must  de- 
pend necessarily  upon  the  facts  of  each  case,  the  relative  situation 
of  the  parties  and  their  means  of  information.  But  all  the  au- 
thorities are  to  the  effect  that  where  the  false  representation  is  an 
expression  of  commendation  or  is  simply  a  matter  of  opinion,  the 
courts  will  not  interfere  to  correct  errors  of  judgment.  Walsh  v. 
Hall,  66  N.  C,  236.  The  law  will  not  give  relief  unless  the  mis- 
representation be  of  a  subsisting  fact.  Hill  v.  Gettys,  135  N.  C, 
375. 

What  has  been  called  "promissory  representation,"  looking  to 
the  future  as  to  what  the  vendee  can  do  with  the  property,  how 
much  he  can  make  on  it,  and,  in  this  case,  how  much  he  can  save 
by  the  use  of  it,  are  on  a  par  with  false  affirmations  and  opinions 
as  to  the  value  of  property,  and  do  not  generally  constitute  legal 
fraud.  Benj.  on  Sales  (7  Ed.),  483,  ct  scq.;  Godron  v.  Parmalee, 
2  Allen  (Mass.),  212;  Long  v.  Woodman,  58  Me.,  52,  and  cases 
cited. 

Mr.  Clark  in  his  work  on  Contracts  states,  in  substance,  that 
commendatory  expressions  or  exaggerated  statements  as  to  value 
or  prospects,  or  the  like,  as  where  a  seller  puffs  up  the  value  and 
quality  of  his  goods,  or  holds  out  flattering  prospects  of  gain,  are 
not  regarded  as  fraudulent  in  law.  (Pp.  332-334.)  It  is  the  duty 
of  the  purchaser  to  investigate  the  value  of  such  expressions  of 
commendation.  He  can  not  safely  rely  upon  them.  If  he  does, 
he  can  not  treat  it  as  fraud  either  for  the  purpose  of  maintaining 
an  action  of  deceit  or  for  the  purpose  of  rescinding  a  contract  at 
law  or  in  equity.  Saunders  v.  Hatterman,  24  N.  C,  32;  14  Am. 
&  Eng.  Enc,  34,  and  cases  cited. 

Mr.  Kerr,  in  his  work  on  Fraud  and  Mistake,  at  page  83,  says: 
"A  misrepresentation  to  be  material  should  be  in  respect  of  an 
ascertainable  fact  as  distinguished  from  a  mere  matter  of  opinion. 
A  representation  which  merely  amounts  to  a  statement  of  opinion 
goes  for  nothing,  though  it  may  not  be  true,  for  a  man  is  not 
justified  in  placing  reliance  on  it." 

Again,  "A  man  who  relies  on  such  affirmation  made  by  a  per- 
son   whose    interest   might    so    readily    prompt    him    to    invest    the 


REALITY    OF    CONSENT.       FRAUD.  331 

property   with   exaggerated   value,   does   so  at   Ids  peril,   and  must 
take  the  consequences  of  his  own  imprudence." 

The  evidence  relied  on  by  the  defendant  is  as  deficient  in  prov- 
ing the  necessary  elements  of  legal  fraud  as  the  answer  is  in  alleg- 
ing them.     It  tends  to  prove  that   Stronach,  the  plaintiff's  agent, 
approached  the  defendant   for  the  purpose  of  selling  him  a  cash 
register;  that  he  stated  to  the  defendant  that  if  he  would  use  the 
cash  register  credit  system  he  could  do  the  same  business  with  one 
clerk  less  or  do  away  with  a  bookkeeper;  that  the  defendant  said 
if  that  was  true  he  would  take  one ;  that  defendant's  brother  had  a 
cash   register  which  looked  like  the  one   plaintiff   sold   defendant ; 
that  the  next  morning  the  defendant  sent  his  bookkeeper  to  see  his 
brother's  machine  and  report  upon  it ;  that  when  he  came  back  and 
reported,   the  defendant  signed  the  contract  and  bought  the  ma- 
chine.    According  to  the  defendant's  own   evidence,  the  machine 
worked  all  right,  and  it  was  only  a  question  of  the  time  it  took  the 
defendant's  clerks  to  operate  it.     The  defendant  testified  that  he 
did  not  know  that   the  machine   had  an  adding  attachment.     He 
said:     "The  only  objection   I  had  to  it  was  it  took  a  little  more 
time.      I   asked  my  brother,   who  had   a   cash   register,   about   his, 
and  he  reported  that  the  cash  register  is  a  good  thing."     The  de- 
fendant further  testified:     "Neither  I  nor  my  clerks  have  ever  had 
any    experience   with    a    machine    of    this    kind.      I    knew    nothing 
about  one.     Stronach  told  me  that  the  trouble  with   the  machine 
was  that  I  had  not  sufficiently  tried  it.     We  used  the  cash  register 
only  one  week.     It  took  us  about  twice  as  long."     The  defendant's 
bookkeeper  testified:     "The  machine  was  perfect   from  a  mechan- 
ical standpoint.     I  can  not  say  that  it  would  take  me  twice  as  long 
with  the  machine  as  it  would  with  the  books.     The  more  familiar 
I  became  with  it,  the   faster   I  could  work  it.     The  more  it  was 
used,  the  better  it  would  work.    We  did  not  use  it  over  two  weeks. 
I   had   never   had   any   previous    experience    with    cash    registers." 
Another  witness  for  the  defendant  said:     "The  cash  part  was  all 
right.      The   credit   part   did   not   work    well.      If   we   had   tried   it 
longer,  it  might  have  worked  better." 

This  evidence  does  not  disclose  any  misrepresentation  of  a  sub- 
sisting fact.  The  language  of  the  agent  at  best  was  nothing  more 
than  "dealer's  talk,"  commending  his  wares,  and  possibly  exag- 
gerating what  the  machine  could  do.  There  is  no  evidence  of  a 
fraudulent  misrepresentation,  or  that  the  defendant  acted  entirely 
upon  such  representation  ;  and  there  is  no  evidence  that  the  agent 
knew  such  statements  to  be  false  when  he  made  them.  The  evi- 
dence shows  that  the  defendant  undertook  to  investigate  the  truth 
and  value  of  the  agent's  representations  on  his  own  account  when 
he  sent  his  bookkeeper  to  examine  and  inquire  into  the  value  of 


332  formation  of  contract. 

his  brother's  machine,  and  did  not  sign  the  contract  until  his  book- 
keeper reported.  There  is  no  evidence  to  show  that  the  value  of 
this  machine  as  a  labor-saving  device  was  peculiarly  within  the 
knowledge  of  the  agent ;  that  it  was  not  known  to  other  persons  to 
whom  the  purchaser  might  have  applied  for  information ;  that  the 
agent  did  anything  to  prevent  investigation  on  his  part.  Such  evi- 
dence is  regarded  by  some  judges  as  material  in  cases  of  this  kind. 
Conley  v.  Coffin,  115  N.  C,  566.  "When  the  purchaser  under- 
takes to  make  an  investigation  of  his  own,  and  the  seller  does 
nothing  to  prevent  this  investigation  from  being  as  full  as  he 
chooses  to  make  it,  the  purchaser  can  not  afterwards  allege  that 
the  vendor  made  misrepresentations."  Jennings  v.  Broughton,  5 
De  Gex  M.  &  G.,  126;  Development  Co.  v.  Silva,  125  U.  S.,  259. 
The  evidence  fails  to  show  that  the  defendant  has  given  the  ma- 
chine a  fair  trial.  On  the  contrary,  his  own  witnesses  testified 
that  the  more  they  used  it,  the  more  expert  they  became.  It  is 
common  knowledge  and  everyday  experience  that  the  wonderful 
products  of  mechanical  skill,  which  in  tbeir  operations  almost  ap- 
proach human  intelligence,  require  practice  in  order  that  the  best 
results  may  be  produced.  It  is  possible  that  if  the  defendant  and 
his  clerks  persevere  in  their  efforts  to  master  this  machine,  he  may 
agree  with  his  brother,  that  "the  cash  register  is  a  good  thing." 
But  if  it  turns  out  that  he  has  sustained  loss,  not  from  any  me- 
chanical defect  in  the  machine,  he  must  attribute  it  to  his  own 
negligence  and  indiscretion.  He  did  not  exercise  that  diligence  in 
making  inquiry  which  the  law  expects  of  a  reasonable  and  careful 
person.     Vigilantibus  et  non  domrientibiis  jura  subveniunt. 

New  trial. 

"While  expressions  of  opinion  by  a  seller,  amounting  to  more  than 
mere  commendation  of  his  goods — puffing  his  wares,  as  it  is  sometimes 
called — or  extravagant  statements  as  to  value  or  quality  or  prospects,  are 
not,  as  a  rule,  to  be  regarded  as  fraudulent  in  law,  yet  when  assurances  of 
value  are  seriously  made,  and  are  intended  and  accepted  and  reasonably 
relied  upon  as  statements  of  fact,  inducing  a  contract,  they  may  be  so 
considered  in  determining  whether  there  has  been  a  fraud  perpetrated ; 
and  though  the  declarations  may  be  clothed  in  the  form  of  opinions  or 
estimates,  when  there  is  doubt  as  to  whether  they  were  intended  and 
received  as  mere  expressions  of  opinion  or  as  statements  of  facts  to  be 
regarded  as  material,  the  question  must  be  submitted  to  the  jurv.'  14  A. 
&  E.,  p.  35;  20  Cyc,  p.  124;  Morse  et  al.  v.  Shaw,  124  Mass.,  59."  Uni- 
type  Co.  v.  Ashcraft,   155 — 63. 

False  affirmation  of  the  value  of  land  is  not  ground  for  relief,  for  it 
is  only  an  opinion,  and  the  plaintiff  should  inform  himself,  unless  there 
is  some  fraud  to  prevent  investigation.  Conley  v.  Coffin,  115 — 563;  Setzer 
v.  Wilson,  26 — p.  513;  Saunders  v.  Hatterman,  24 — 32.  In  May  v.  Loomis, 
140 — 350,  the  amount  of  timber  on  a  tract  of  land  was  not  given  as  an 
opinion  but  as  a  material  fact;  see  also,  Cutler  v.  Lumber  Co.,  128 — 477; 
Jones  v.  Ins.  Co.,  151 — 54;  Machine  Co.  v.  Feezer,  152 — 516;  Stewart  v. 
Realty   Co.,   159—230;    Williamson   v.    Holt,   147—515. 

Representations  as  to  another's  financial  condition  may  amount  to  fraud. 
Thomas  v.  Wright,  98 — 272.     Misrepresentation  of  law  is  not  fraud,  unless 


REALITY    OF    CONSENT.      FRAUD.  333 

there    is    a    relation    of    confidence    between    the    parties.      Clark    Cont,    226 ; 
14  Am.  &  Eng.  Encyc,  54  et  seq. 

See  generally,  Harriman  Cont..  sec.  435;  20  Cyc,  19;  1  Page  Coin.,  sec. 
96;  35  L.  R.  A,  417;   14  Am.  &  Eng.  Encyc,  343-347:    Dalhoff  Constr.  Co. 

v.   Block.  157  Fed.  227.   17  L.  R.  A.   (N.   S.).  419;   Mt.    Hope   Nurseries  (  o 
v.  Jackson.  128  Pac.  250,  45  L.  R.  A.  (X.  S..I.  243. 

4.  False  within  the  knowledge  of  the  party  making  it. 

(134)  FEREBEE  v.  GORDON, 
35   X.   C.  350—1852. 

Action  on  the  case  for  fraud  in  the  sale  of  a  slave.  Plaintiff 
asked  the  defendant  if  the  slave  was  sound,  and  defendant  said  lie 
was  so  far  as  he  knew;  plaintiff  then  asked  defendant  if  he  would 
warrant  the  slave  to  be  sound,  and  he  said  he  would  not,  that 
plaintiff  must  take  him  as  he  had  done ;  it  appeared  that  defendant 
had  purchased  the  slave  two  days  before  at  auction,  unwarranted 
as  to  soundness.  There  was  some  evidence  that  defendant  knew 
the  slave  was  not  sound. 

The  court  charged. that  if  the  defendant  stated  that  the  slave 
was  sound  so  far  as  he  knew,  and  that  was  false  within  his  own 
knowledge,  he  was  responsible.  There  was  a  verdict  and  judgment 
for  the  plaintiff,  and  defendant  appealed. 

Nash,  J.  The  charge  of  His  Honor  was  entirely  correct.  When 
an  article  of  personal  property  is  sold  with  all  faults,  the  doctrine 
of  caveat  emptor  certainly  applies.  The  very  object  of  introduc- 
ing such  a  stipulation  into  the  contract  is  to  put  the  buyer  upon 
his  guard,  and  throw  upon  him  the  burden  of  examining  the  ar- 
ticle and  guarding  himself  against  all  faults,  as  well  those  which 
are  secret  as  those  which  are  apparent.  But  the  rule  never  was 
adopted  to  encourage  fraud  and  deceit  or  false  dealing  between 
man  and  man.  The  principles  of  the  common  law  are  based  on 
morality — not  an  abstract  or  ideal  morality,  but  one  encouraging 
and  enforcing  free  dealing  between  man  and  man.  When,  there- 
fore, in  a  contract  of  sale  the  vendor  affirms  that  which  he  either 
knows  to  be  false  or  does  not  know  to  be  true,  whereby  the  other 
party  sustains  a  loss,  and  he  acquires  a  gain,  he  is  guilty  of  a 
fraud,  for  which  he  is  answerable  in  damages.  When,  therefore, 
sued  for  a  deceit  in  the  sale  of  an  article,  he  can  not  protect  him- 
self from  responsibility  by  showing  that  the  vendee  purchased 
with  all  faults — if  it  appear  that  he  resorted  to  any  contrivance  or 
artifice  to  hide  the  defect  of  the  article  or  made  a  false  represen- 
tation at  the  time  of  the  sale.  The  fraud  may  exist  either  in  using 
means  to  conceal  the  defect  or  in  a  false  representation  of  the  con- 
dition of  the  article.  The  case  we  are  considering  states  that  there 
was  evidence  tending  to  show  the  unsoundness  of  the  negro  at  the 


334  FORMATION    OF    CONTRACT. 

time  of  the  sale,  and  of  the  defendant's  knowledge  of  the  fact; 
and  it  shows  also  the  assertion  of  the  defendant  that  he  was  sound 
so  far  as  he  knew.  The  questions,  both  of  unsoundness  and  the 
scienter,  were  left  by  His  Honor  to  the  jury,  with  the  direction 
that  if  the  statement  made  by  the  defendant,  as  to  the  soundness, 
"was  false  within  his  knowledge,  he  was  responsible  for  it  as  a 
false  and  fraudulent  representation."  We  concur  in  this  opinion, 
and  it  is  sustained  fully  by  the  case  of  Schneider  v.  Heath,  3 
Camp.,  505.  The  words  of  Chief  Justice  Mansfield  are  strongly 
applicable  to  this  case.  In  the  commencement  of  his  opinion  he 
remarks :  "The  words  are  very  large  to  exclude  the  buyer  from 
calling  upon  the  seller  for  any  defect  in  the  thing  sold ;  but  if  the 
seller  was  guilty  of  any  positive  fraud  in  the  sale,  these  words  will 
not  protect  him.  There  might  be  such  fraud,  either  in  a  false  rep- 
resentation or  in  using  means  to  conceal  some  defect."  See,  also, 
2  Steph.  N.  P.,  1283;  Millish  v.  Matteux,  Pea.  N.  P.  Cases,  156. 
No  error  is  perceived  in  His  Honor's  charge,  and  the  judgment 
is  Affirmed. 

(135)   WHITEHURST  v.  LIFE  INSURANCE  CO., 

149  N.  C,  273,  62  S.  E.,  1067—1908. 

The  plaintiff  held  a  life  insurance  policy,  which  contained  a  pro- 
vision that  at  the  end  of  ten  years  he  could  "surrender  the  policy 
and  draw  the  entire  cash  value,  that  is,  the  legal  reserve,  and 
four  percent  interest."  The  plaintiff  could  not  read  the  policy,  and 
the  defendant's  agent  read  it  to  him  and  told  him  that  at  the  end 
of  ten  years  the  whole  amount  paid  in  would  be  returned  with  in- 
terest ;  the  plaintiff  accepted  the  policy  upon  this  statement.  There 
was  a  judgment  for  the  plaintiff  for  $359,  and  defendant  appealed. 

Affirmed. 

Hoke,  J.  .  .  .  It  is  not  always  required,  for  the  establishment  of 
actionable  fraud,  that  a  false  representation  should  be  knowingly 
made.  It  is  well  recognized  with  us  that,  under  certain  conditions 
and  circumstances,  if  a  party  to  a  bargain  avers  the  existence  of 
a  material  fact  recklessly,  or  affirms  its  existence  positively,  when 
he  is  consciously  ignorant  whether  it  be  true  or  false,  he  may  be 
held  responsible  for  a  falsehood ;  and  this  doctrine  is  especially 
applicable  when  the  parties  to  a  bargain  are  not  upon  equal  terms 
with  reference  to  the  representation,  the  one,  for  instance,  being 
under  a  duty  to  investigate,  and  in  a  position  to  know  the  truth, 
and  the  other  relying  and  having  reasonable  ground  to  rely  upon 
the  statements  as  importing  verity.  Modlin  v.  R.  R.,  145  N.  C, 
218;  Ramsey   v.   Wallace.    100  N.   C,   75:   Cooper  v.   Schlesinger, 


REALITY    OF    CONSENT.       FRAUD.  335 

111  U.  S.,  148;  Pollock  on  Torts  (7  Ed.),  276;  Smith  on  the  Law 
of  Fraud,  sec.  3  ;  Kerr  on  Fraud  and  Mistake,  68. 

The  conditions  under  which  these  misrepresentations  as  to  ma- 
terial facts  in  the  course  of  a  bargain  may  he  made  the  hasis  of 
an  action  for  deceit,  as  a  general  proposition,  will  be  found  very 
well  stated  in  Pollock,  supra,  as  follows : 

"To  create  a  right  of  action  for  deceit  there  must  be  a  statement 
made  by  the  defendant,  or  for  which  he  is  answerable  as  princi- 
pal, and  with  regard  to  that  statement  all  the  following  conditions 
must  concur:  (a)  It  is  untrue  in  fact;  (b)  the  person  making 
the  statement,  or  the  person  responsible  for  it,  either  knows  it  to 
be  untrue,  or  is  culpably  ignorant  (that  is,  recklessly  and  con- 
sciously ignorant)  whether  it  be  true  or  not;  (c)  it  is  made  with 
the  intent  that  the  plaintiff  shall  act  upon  it,  or  in  a  manner  ap- 
parently fitted  to  induce  him  to  act  upon  it;  (d)  the  plaintiff  does 
act  in  reliance  on  the  statement  in  the  manner  contemplated  or 
manifestly  probable,  and  thereby  suffers  damage." 

And  as  to  responsibility  for  these  statements  attaching,  when 
the  parties  are  not  upon  equal  terms  in  reference  to  them,  it  is 
said  in     .     .     .     Kerr  on  Fraud  and  Mistake,  page  68: 

"A  misrepresentation,  however,  is  a  fraud  at  law,  although  made 
innocently,  and  with  an  honest  belief  in  its  truth,  if  it  be  made  by 
a  man  who  ought  in  the  due  discharge  of  his  duty  to  have  known 
the  truth,  or  who  formerly  knew,  and  ought  to  have  remembered, 
the  fact  which  negatives  the  representation,  and  be  made  under 
such  circumstances  or  in  such  a  way  as  to  induce  a  reasonable 
man  to  believe  that  it  was  true,  and  was  meant  to  be  acted  on, 
and  has  been  acted  on  by  him,  accordingly,  to  his  prejudice.  If 
a  duty  is  cast  upon  a  man  to  know  the  truth,  and  he  makes  a  rep- 
resentation in  such  a  way  as  to  induce  a  reasonable  man  to  believe 
that  it  is  true,  and  is  meant  to  be  acted  on,  he  can  not  be  heard 
to  say,  if  the  representation  proves  to  be  untrue,  that  he  believed 
it  to  be  true,  and  made  the  misstatement  through  mistake,  or  ig- 
norance, or  forgetfulness." 

Applying  the  principle  announced  and  sustained  by  these  au- 
thorities, we  are  of  opinion,  as  stated,  that  the  motion  to  nonsuit, 
entered  by  defendant,  was  properly  overruled.  The  policy  held  by 
plaintiff  in  defendant's  company  contained  stipulations  to  some  ex- 
tent ambiguous  and  certainly  indefinite ;  and  when  an  agent  of  de- 
fendant company,  in  the  effort  to  induce  plaintiff  to  take  out  the 
policy,  said  to  him  that,  under  one  of  these  stipulations,  "the  com- 
pany' at  the  end  of  ten  years  would  pay  back  the  premiums  with 
interest,"  we  think  that,  under  the  conditions  attending  the  trans- 
action, and  having  due  regard  to  the  respective  positions  of  the 
parties,  it  was  a  question  for  the  jury  as  to  whether  these  assur- 


336  FORMATION    OF    CONTRACT. 

ances,  given  by  defendant's  agent,  were  intended  as  statements  of 
fact,  accepted  and  reasonably  relied  upon  by  plaintiff  as  a  material 
inducement  to  the  contract,  and  that  the  verdict  establishes  an  ac- 
tionable fraud,  imputable  to  defendant  company,  entitling  plaintiff 
to  recover  the  premiums  paid  and  interest. 

There  is  no  error,  and  the  judgment  below  is  Affirmed. 

The  party  making  a  representation,  must  know  or  believe  it  to  be  false, 
or  what  is  the  same  thing,  have  no  reason  to  believe  it  to  be  true.  Silence, 
as  to  a  fact  which  a  party  does  not  believe  to  exist,  can  not  be  said  to 
be  a  fraudulent  concealment.  Hamrick  v.  Hogg,  12—350.  There  must  be 
knowledge  or  belief  in  the  existence  of  the  defect.  Cobb  v.  Fogleman, 
23 — 440.  When  the  vendor  has  been  informed  of  the  defect  but  does  not 
believe  it  to  exist,  he  is  not  bound  to  disclose  it.  McEntire  v.  McEntire, 
43_297;  Gerkins  v.  Williams,  48—11;  Ramsey  v.  Wallace,  100—75.  When 
one  represents  another  to  be  solvent,  knowing  him  to  be  otherwise,  it  is 
fraud.  Thomas  v.  Wright,  98 — 272.  When  bank  officers  make  false  state- 
ments as  to  the  condition  of  the  bank,  and  thereby  induce  depositors  to 
keep  their  funds  in  the  bank,  they  are  guilty  of  fraud,  and  are  conclusively 
presumed  to  know  the  condition  of  the  bank.  Tate  v.  Bates,  118 — p.  308; 
Solomon  v.  Bates,  118—311.  Where  A  refers  the  purchaser  to  B  for  infor- 
mation, and  B  misrepresents  it,  the  contract  is  voidable  by  the  purchaser. 
Pettijohn  v.  Williams,  46 — 145.  Where  there  is  a  warranty,  the  liability 
does  not  depend  upon  the  scienter.  McKinnon  v.  Mcintosh,  98 — 89;  Modlin 
v  R.  R.,  145—218;  Whitmire  v.  Heath,  155—304;  Tarault  v.  Seip,  158— 
363;  Hodges  v.  Smith,  158—256,  159—525;  Robertson  v.  Halton,  156—215; 
Fields   v.   Brown.    160—295. 

See  also  1  Page  Cont.,  sec.  108;  Harriman  Cont,  sec.  442;  Clark  Cont., 
229;  20  Cvc,  24:  6  L.  R.  A.,  149;  28  L.  R.  A.,  753;  29  L.  R.  A..  360;  14 
Am.  &  Eng.  Encvc,  86-102;  Chatham  Furnace  Co.  v.  Moffatt,  147  Mass., 
403,  18  X.  E..  168,  Mord.  &  Mel.  Rem.,  695;  Shackett  v.  Bickford,  74  X. 
H.,  57.  65  Atl,  252.  7  L.  R.  A.  (X.  S.),  646;  Paslev  v.  Freeman,  3  T.  R., 
51,  12  E.  R.  C,  235;  Derrv  v.  Peek,  14  App.  Cas.,  337,  12  E.  R.  C.  250. 
In  Aldrich  v.  Scribner,  154  Mich.,  23,  117  X.  W.,  581,  18  L.  R.  A.  (X.  S.), 
379,  it  is  held  that  a  false  representation  is  sufficient  whether  the  person 
knew    it   or    not. 

5.  Representation    must    be    reasonably    relied    upon. 

(136)   BLACKNALL  v.  ROWLAND  and  COOPER, 

108  X.  C,  554,  13  S.  E.,  191—1891. 

Civil  action  for  damages  for  false  and  fraudulent  representa- 
tions, by  the  defendants,  in  a  contract  by  which  the  plaintiff  was 
induced  to  convey  a  valuable  tract  of  land  for  certain  shares  of 
stock  in  a  corporation.  There  was  a  written  contract  in  which, 
among  other  things,  it  was  stated,  "As  the  basis  of  the  proposition 
and  acceptance  it  is  represented  and  understood  that  said  stock  is 
of  the  par  value  of  $50,  etc.  (giving  amount  paid  in,  dividend  de- 
clared out  of  net  profits,  indebtedness  and  assets).  This  trade  is 
conditioned  upon  the  representations  above  as  to  condition  of  busi- 
ness and  stock  of  said  company  and  other  statements  being  veri- 
fied upon  examination  of  its  affairs  by  an  expert  bookkeeper  of 
Black-nail's  selection  and  at  his  expense."     The  defendants  denied 


REALITY    OF    CONSENT.       FRAUD.  357 

the  fraud.  The  plaintiff  introdueed  the  writing  and  other  evidence, 
and  the  court  held  that  the  plaintiff  could  not  recover  hecause  he 
had  failed  to  have  the  examination  made.  The  plaintiff  submitted 
to  a  nonsuit  and  appealed. 

Merrimon,  C.  J.  The  cause  of  action  alleged  in  the  complaint 
consists,  in  substance,  of  the  alleged  false  and  fraudulent  repre- 
sentations of  the  defendants  made  to  the  plaintiff  in  the  paper- 
writing,  mentioned  above,  and  otherwise  as  to  the  condition,  cir- 
cumstances and  solvency  of  the  corporation  therein  named,  which 
the  plaintiff  reasonably  believed  to  be  true,  and  whereby  he  was 
fraudulently  misled  and  induced  to  buy  the  shares  of  stock  men- 
tioned of  the  defendants  in  that  corporation,  which  were  really  of 
no  value,  and  to  convey  to  them  his  tract  of  land  mentioned  of 
large  value;  and  further,  of  the  false  and  fraudulent  warranty  of 
the  truth  of  such  representations  made  by  the  defendants  to  the 
plaintiff  as  additional  inducement  to  him  to  buy  such  stock  of 
no  value. 

There  was  evidence  for  the  plaintiff,  on  the  trial,  tending  to 
prove  that  the  representations  made  by  the  defendant  to  him  in 
the  paper-writing  and  otherwise  were  not  true ;  that  the  corpora- 
tion was  insolvent ;  that  it  was  not  prosperous,  but  declining ;  that 
its  indebtedness  was  greater  and  its  resources  less  than  repre- 
sented; that  the  dividend  mentioned  was  not  declared  out  of  the 
earnings  of  the  corporation,  and  that  the  defendants  knew  these 
facts;  that  they  encouraged  and  induced  the  plaintiff  to  believe 
these  representations  and  to  close  the  proposed  transaction.  There 
was  evidence  for  the  defendants  tending  to  prove  the  contrary. 

In  this  state  of  the  case  the  presiding  Judge  said  "that,  as  the 
plaintiff  had  not  had  the  books  of  the  corporation  examined  by  an 
expert  bookkeeper,  he  would  instruct  the  jury  that  the  plaintiff 
was  not  entitled  to  recover."  In  this  there  was  error.  The  plain- 
tiff was  not  concluded  by  the  fact  that  he  did  not  have  such  exam- 
ination made.  He  was  not  bound  to  verify  the  representations 
made ;  he  might,  as  a  matter  of  caution,  have  done  so,  but  he  might 
not  unreasonably  believe,  rely  and  act  upon  the  plain,  pertinent 
and  material  statements  made  by  the  defendants  to  him  in  the 
paper-writing  and  otherwise.  If  the  plaintiff  believed  them  to  be 
true,  and  acted  upon  them,  and  the  defendants  knew  them  to  be 
false,  and  intended  fraudulently  thereby  to  induce  the  plaintiff 
to  purchase  their  shares  of  stock,  of  no  value,  at  the  price  he  paid 
for  them,  he  might  recover,  notwithstanding  he  did  not  cautiously 
have  their  representations  verified.  Such  verification  was  not  in- 
tended for  the  benefit  of  the  defendants  ;  much  less  was  it  intended 
to  shield  or  relieve  them  from  liability  for  fraud  and  deceit  they 
might  perpetrate  upon  the  plaintiff.     The  paper-writing,  and  par- 


338  FORMATION    OF    CONTRACT. 

ticularly  the  last  clause  of  it  in  respect  to  the  verification  of  its 
statements,  might,  taken  in  connection  with  other  evidence  favor- 
ahle  to  the  defendants,  be  evidence  of  their  good  faith  and  going 
to  prove  that  the  plaintiff  did  not  rely  upon  their  representations ; 
but,  on  the  other  hand,  the  same  might,  along  with  other  evidence 
favorable  to  the  plaintiff,  be  evidence  of  a  fraudulent  contrivance 
to  deceive  and  mislead  him.  Fraud  is  protean  in  its  devices  and 
endless  in  its  shifts  and  subterfuges.  What  is  evidence  of  it,  or 
its  absence,  oftentimes  depends  more  or  less  upon  the  condition  of 
matters  and  things  material  and  the  attending  circumstances.  In 
one  aspect  of  the  evidence  in  this  case,  accepted  as  true,  the  mate- 
rial representations  in  the  paper-writing  in  effect  made  to  the 
plaintiff,  and  other  like  representations  otherwise  made  to  him  by 
the  defendants,  were  grossly  false  and  so  within  their  knowledge. 
And  it  might  be  fairly  inferred,  from  the  nature  of  the  matter 
and  the  evidence,  that  the  paper-writing,  and  particularly  the  last 
clause  of  it,  was  an  artful  shift  to  mislead  and  deceive  the  plain- 
tiff, a  man  little  familiar  with  such  matters,  as  to  the  sincerity  and 
good  faith  of  the  defendants  in  respect  to  the  proposed  sale  of  the 
shares  of  stock  mentioned.  In  another  aspect  of  it  more  favorable 
to  the  defendants,  the  paper-writing,  and  especially  the  last  clause 
of  it,  would  be  evidence  tending  to  show  their  good  faith,  and  that 
the  plaintiff,  in  buying  the  shares  of  stock  and  the  sale  of  his  land, 
relied  upon  his  own  judgment  and  information  gathered  from 
other  sources  than  the  defendants.  If  the  defendants  knew  that 
the  representations  made  by  them  in  the  paper-writing  and  other- 
wise, as  in  evidence,  were  false — as  the  evidence,  much  of  it, 
tended  to  prove — it  would  be  most  unreasonable  to  infer  that  they 
intended  or  expected  the  same  to  be  verified  or  scrutinized.  On 
the  other  hand,  in  view  of  parts  of  the  evidence,  the  reasonable 
and  just  inference  would  be  that  the  last  clause  of  the  paper- 
writing  was  inserted  to  simulate  great  fairness  and  candor  on  the 
part  of  the  defendants,  and  thus  the  more  successfully  entrap,  de- 
ceive and  mislead  the  plaintiff,  a  man,  as  the  evidence  tended  to 
show,  not  familiar  with  such  matters.  Such  view  of  the  evidence 
would  be  strengthened  by  the  fact  that  the  verification  suggested 
was  to  be  made  by  an  expert  bookkeeper,  at  the  expense  of  the 
plaintiff.  Shrewd  men  of  experience  might  think  and  expect  that 
a  man  of  small  experience,  after  such  flattering  representations, 
would  not  have  such  verification  made  at  his  own  cost. 

Hence,  the  paper-writing,  including  the  last  clause  of  it,  was 
simply  evidence.  It  did  not  conclude  the  plaintiff,  as  the  court 
intimated  it  did. 

There   is,  therefore,   error.     The  judgment  of   nonsuit   must   be 


REAUTV    OF    CONSENT.       FRAUD.  339 

set  aside  and  the  case  disposed  of  according  to  law.     To  that  end, 
let  this  opinion  be  certified  to  the  Superior  Court.   It  is  so  ordered. 

Error. 

The   same   case   was   again   before   the   court    in    110—389,   and    the    words 
in    the    contract   were    held    to    amount    to    a    warranty,    and    bound    the    de 
fendants. 

If  the  means  of  information  are  equally  within  the  reach  of  both  parties, 
the  rule  caveat  emptor  applies,  and  the  purchaser  must  protect  himself. 
Fields  v.  Rouse,  48—72;  but  this  maxim  does  not  apply  where  there  is 
actual  fraud.  Hill  v.  Brower,  76—124;  or  artifice  is  used  to  prevent 
detection.  Riggs  v.  Perkins,  75—357.  See  also,  Crowder  v.  Langdon, 
38—476:  Duckworth  v.  Walker,  46—507;  Hob's  v.  Riddick,  50—80;  School 
Com.  v.  Kesler,  67—443:  Grantham  v.  Kennedy,  91—153;  Anderson  v. 
Rainev,  100—321  ;  Smathers  v.  Gilmer,  126—757.  Recent  decisions  and 
text-writers  show  a  strong  tendency  to  hold  that  the  defense  of  negligence 
is  not  open  to  the  defendant,  when  sued  for  his  positive  fraud.  Grih.n  v. 
Lumber  Co.,  140— p.  521:  May  v.  Loomis,  140— p.  357;  Gray  v.  Jenkins. 
151—80;  Leonard  v.  Power  Co.,  155—10;  Shell  v.  Roseman,  155—90;  Eielms 
v.  Holton,  152—587;  Machine  Co.  v.  Bullock,  161—1;  Machine  Co.  v.  Mc- 
Kay, 161—584;  Fargo  Gaslight  Co.  v.  Fargo  Elec.  Co.,  4  X.  1)..  219,  37 
L.  R.  A.,  593  (subject  note);  Pigott  v.  Graham,  48  Wash.,  349,  93  Pac, 
435  14  L.  R.  A.  (N.  S.),  1176;  Cottrill  v.  Krum,  100  Mo.,  397,  18  A.  S. 
R.,  549;  Dody  v.  Condit,  163  111.,  511,  45  X.  E..  224.  If  the  plaintiff 
knows  or  believes  the  defect  to  exist,  he  can  not  recover  for  fraud.  Cobb 
v.  Fogleman,  23—440;  and  if  a  prudent  person,  by  ordinary  care  in 
prosecuting  his  inquiries,  would  have  ascertained  the  truth,  before  acting, 
relief  will  be  refused  on  the  ground  of  negligence.  Boyden  v.  Clark, 
109—669;  Black  v.  Black,  110—398;  Dellinger  v.  Gillespie,  118—737.  In 
sales  of  land  the  vendee  should  protect  himself  against  defects,  and  if  he 
fails  to  do  so,  it  is  his  loss,  except  in  case  of  fraud.  Etheridge  v.  Vernoy, 
70—713;  Foy  v.  Haughton,  85—168;  Anderson  v.  Rainey,  100—321;  Wood- 
bury v.  Evans,  122—779;  Smathers  v.  Gilmer,  126—757;  Conley  v.  Coffin, 
115—563;  Saunderson  v.  Hatterman,  24—35;  Farrar  v.  Alston,  12—69.  In 
Lytle  v.  Bird,.  48—122,  and  Credle  v.  Swindell,  63—305,  it  was  held  to  be 
negligence  in  "the  vendee  not  to  have  a  survey,  but  these  have  not  been 
followed.     Walsh  v.   Hall,  supra. 

See   above,    Intention   and    Opinion.     Clark    Cont.,    228;    14    Am.    &    Eng. 
Encyc.   115—137;   1   Page  Cont.,  sec.   117  et  seq.;   20  Cyc,  62. 

6.  Intended  to   deceive  and   does  deceive   and  injure. 

(137)  STAFFORD  v.  NEWSOM, 

31   N.  C,  507—1849. 

Civil  action  for  damages.  Plaintiff  bought  six  bushels  of  corn 
from  defendant;  after  the  price  had  been  agreed  on,  and  while 
they  were  measuring  the  corn  or  immediately  after  it  was  mea- 
sured, the  defendant  or  his  clerk  remarked  that  arsenic  had  been 
placed  in  two  plates  in  the  room,  to  kill  rats  ;  the  plaintiff  said  he 
did  not  like  to  take  the  corn  if  it  had  been  exposed  to  arsenic ;  the 
defendant  said  there  was  no  danger,  that  he  had  sent  some  of  the 
corn  to  mill,  and  that  he  would  be  responsible  for  all  damages  ;  the 
plaintiff  took  the  corn,  fed  it  to  his  horses,  and  they  died. 

The  court  charged  the  jury,  that  to  entitle  the  plaintiff  to  re- 


340  FORMATION    OF    CONTRACT. 

cover,  he  must  show  that  the  corn  was  infected  with  arsenic  ;  that 
defendant  knew  it  and  concealed  it ;  that  plaintiff's  horses  died  by- 
eating  it ;  that  if  the  defendant  or  his  clerk  told  the  plaintiff  about 
the  arsenic  before  the  contract  was  completed,  so  as  to  put  him  on 
inquiry,  he  could  not  recover;  but  if  told  after  the  contract  was 
completed  and  the  title  vested  in  the  plaintiff,  it  would  not  avail 
defendant;  or  if  what  defendant  said  was  calculated  to  put  plain- 
tiff on  his  guard,  that  it  would  excuse  defendant. 

There  was  a  verdict  and  judgment  for  the  plaintiff  for  the  value 
of  the  horses,  and  the  defendant  appealed. 

Nash,  J.  The  first  portion  of  His  Honor's  charge  is  free  from 
exception.  To  entitle  plaintiff  to  recover  it  was  necessary  for  him 
to  show  that  the  corn  was  poisoned  with  arsenic ;  that  the  defend- 
ant knew  it  and  concealed  it,  and  that  he  was  injured  thereby. 
And  it  is  correct,  as  charged,  that  if  defendant  or  his  clerk  told 
the  plaintiff  that  the  corn  had  been  exposed  to  the  influence  of 
arsenic,  so  as  to  put  him  on  inquiry,  before  the  contract  was  com- 
pleted, the  plaintiff  could  not  recover.  So  far  all  is  correct.  We 
do  not  concur  with  His  Honor  in  the  subsequent  part  of  his  charge. 
He  proceeds,  "But  if  such  information  were  given  after  the  prop- 
erty in  the  corn  vested  in  the  plaintiff,  it  would  not  avail."  We 
think  in  this  there  was  error.  The  plaintiff  claimed  damages  to 
the  amount  of  the  value  of  three  horses,  which,  it  was  alleged,  had 
been  poisoned  by  eating  the  corn,  and  had  died.  Upon  the  sup- 
position that  a  special  action  on  the  case  can  be  maintained  for  the 
loss  of  the  horses,  the  important  inquiry,  in  this  case,  was  as  to 
the  amount  of  damages.  If  the  seller  makes  a  fraudulent  repre- 
sentation of  an  article,  yet  the  purchaser  can  not  maintain  an  ac- 
tion for  deceit,  if  at  the  time  of  the  contract,  or  before,  he  knows 
the  fact  to  be  otherwise  than  as  represented.  So  in  this  case,  if, 
at  the  time  the  plaintiff  fed  his  horses  with  the  corn,  he  knew  or 
had  been  informed,  it  was  poisoned  with  arsenic,  although  that 
information  came  to  him  after  the  contract  was  made  he  can  not 
maintain  an  action  for  their  loss  ;  because  it  was  his  folly  to  make 
the  experiment,  after  obtaining  the  information.  The  plaintiff, 
then,  was  entitled  to  damages,  if  the  defendant  had  cheated  him, 
only  for  the  value  of  the  corn,  and  not  for  that  of  the  horses,  for 
either  before  or  after  the  contract  was  closed,  and  before  the  corn 
was  used  by  him,  he  was  apprised  of  the  fact. 

We  think  there  was  error  also  in  the  closing  part  of  the  charge. 
The  jury  were  instructed  that  if  what  the  defendant  said  to  the 
plaintiff  about  the  arsenic  was  calculated  to  put  him  off  his  guard, 
rather  than  excite  to  inquiry,  then  the  talk  about  the  arsenic  would 
not  avail  the  defendant.  The  action  for  deceit  rests  in  the  inten- 
tion with  which  a  representation  is  made,  or  a  fact  not  mentioned. 


REALITY    OF    CONSENT.      FRAUD.  341 

It  was  not  sufficient  that  the  representation  made  should  be  calcu- 
lated to  mislead — for  that  may  be  done  by  the  most  honest  com- 
munication— but  the  representation  must  be  made  with  intent  to 
deceive.  Moral  turpitude  is  necessary  to  charge  a  defendant  in  an 
action  for  a  deceit.     Hamrick  v.  Hogg,  12  N.  C,  350. 

Per  Curiam.     Judgment  is  reversed,  and  a  venire  de  novo  or- 
dered. 

"Fraud  without  damage,  or  damage  without  fraud,  gives  no  cause  of 
action;  but  where  these  two  concur,  there  an  action  lieth."  March  v. 
Wilson,  4—143;  Weaver  v.  Wallace.  9  N.  J.  L.,  251,  Mord.  &  Mel.  Rem., 
700.  Where  the  defendant  is  ignorant  of  a  fact,  and  there  is  no  intent 
to  deceive,  mere  silence  is  not  fraud.  Tilghman  v.  West,  43 — 183.  Where 
the  complaint  alleging  false  representation  does  not  allege  that  the  plaintiff 
was  therehv  deceived,  it  is  defective.  Foy  v.  Haughton.  83—467;  same 
case,  85—168.  The  intent  to  deceive  need  not  apply  to  a  particular  per- 
son, if  it  exists  and  is  acted  on  with  injury.  Tate  v.  Bates,  118 — p.  308; 
Solomon  v.  Bates,  118—311;  March  v.  Wilson,  44—143;  Cheatham  v.  Haw- 
kins, 80-161;  Henrv  v.  Dennis,  95  Me.,  24,  49  Atl.,  58.  85  A.  S.  R.,  365. 
The  loss  of  a  good'  bargain  is  not  sufficient  damage,  Fagan  v.  Newsom, 
12—20;  but  what  mav  be  recovered  as  damages,  see  Lunn  v.  Shermer,  93 — 
164;  Robertson  v.  Halton,  156—215;  Hodges  v.  Smith.  159—525;  French 
v  Vining,  102  Mass.,  132,  3  A.  R.,  440;  Jeffrev  v.  Bigelow,  13  Wend.,  518, 
28  A.  D.,  476;  Wells  v.  Cook,  16  Ohio  St.,  67,  88  A.  D.,  436. 

See  also  Clark  Cont,  230-233;  14  Am.  &  Eng.  Encyc,  102-106;  Ibid., 
106-115;    Ibid.,    137-147;  20   Cyc,  42. 

Fraud  in  auction  sales. — Free  and  fair  competition  being  essential  to 
every  auction  sale,  any  means,  such  as  false  representations  or  descrip- 
tions, agreements  to  stifle  competition,  or  to  run  up  the  price,  would  be 
fraud.  Smith  v.  Greenlee,  13—126:  Morehead  v.  Hunt,  16—35;  Woods  v. 
Hall,  16—415;  McDowell  v.  Simms,  41—278;  45—130;  Bailey  v.  Morgan, 
44—351;  Tomlinson  v.  Savage,  41^30:  Whitaker  v.  Bond,  63—290; 
Black  v.  Bavliss,  86—527;  Davis  v.  Keen,  142—496;  Satterfield  v.  Kmdley, 
144—455;    Henderson- Snyder   Co.   v.   Polk,   149—104. 

7.  Fraud  in  the  factum,  and  fraud  in  the  treaty. 

(138)   McARTHUR  v.  JOHNSON, 

61   N.  C,  317.  93  A.  D.,  593—1867. 

Action  of  trespass  quare  clausum  fregit.  Both  parties  claimed 
under  Tohn  L,  Mc Arthur.  In  1853  John  L.  McArthur  contracted 
to  sell  a  tract  of  fifty  acres  of  land  to  the  defendant.  On  the  next 
day,  being  on  his  way  to  the  Southwest,  after  some  discussion  as 
to  the  best  way  of  making  the  conveyance,  A.  L.  McArthur,  an 
older  brother  of  John,  suggested  that  one  McCallum,  who  lived  on 
the  road,  should  write  a  power  of  attorney  to  one  McLean  to  make 
the  deed  in  John's  absence.  At  McCallum's,  John  remained  in 
the  buggy,  and  A.  L.  went  into  the  house;  after  some  time  he 
returned  with  McCallum,  bringing  a  deed,  and  in  reply  to  a  ques- 
tion by  John,  said  it  was  "all  right."  John,  without  reading  the 
deed,  or  having  it  read,  signed  it  and  went  on  his  journey.  This 
deed  not  only  included  the  fifty  acres,  but  a  twenty-acre  tract  (the 


342  FORMATION    OF    CONTRACT. 

land  in  controversy),  and  authorized  McLean  to  convey  the  latter 
to  A.  L.  McArthur.  This  was  done  without  the  knowledge  or  con- 
sent of  John.  By  subsequent  conveyances  the  plaintiff  claimed 
the  twenty  acres.  The  defendant  contended  that  the  deed  was 
void  on  account  of  the   fraud  practiced. 

There  was  a  verdict  and  judgment  for  the  defendant  and  plain- 
tiff appealed. 

Battle,  J.  The  decision  of  this  case  depends  upon  the  ques- 
tion whether  the  fraud  alleged  to  have  been  practiced  upon  John 
L.  McArthur,  in  the  execution  of  the  power  of  attorney  to  Mc- 
Lean, under  whom  the  plaintiff  claims,  was  a  fraud  in  the  factum 
of  the  deed,  or  a  fraud  in  the  consideration  of  it,  or  in  some 
matter  collateral  to  it.  It  is  a  well-established  distinction  that,  for 
a  fraud  of  the  first  kind,  the  deed  may  be  avoided  at  law,  while 
for  a  fraud  of  either  of  the  two  last  kinds,  relief  can  be  had  only 
in  a  court  of  equity.  Reed  v.  Moore,  25  N.  C,  310;  Canoy  v. 
Troutman,  29  N.  C,  155;  Cant  v.  Hunsucker,  34  N.  C,  254; 
Nichols  v.  Holmes,  46  N.  C,  360;  Gwynn  v.  Hodge,  49  N.  C, 
168;  Logan  v.  Simmons,  18  N.  C,  13. 

An  instance  of  fraud  in  the  factum  is  when  the  grantor  intends 
to  execute  a  certain  deed,  and  another  is  surreptitiously  substituted 
in  the  place  of  it.    See  Gant  v.  Hunsucker  and  Nichols  v.  Holmes, 
ubi  supra.     Another  instance   is   afforded  by   the  case  of   a   deed 
executed  by   a   blind   or  illiterate   person,   when   it   has   been   read 
falsely  to  him  upon  his  request  to  have  it  read.     2  Blk.  Com.,  304; 
Manser's  case,  2  Coke  Rep.,  3.     These  authorities  show  that  the 
party  was  fraudulently  made  to  sign,  seal  and  deliver  a  different 
instrument   from  that  which  he  intended,  so  that  it  could  not  be 
said  to  be  his  deed.     Several  of  the  cases  in  our  Reports,  referred 
to  above,  furnish  examples  of  what  is  meant  by  fraud  in  the  con- 
sideration of  the  deed,  or  in  the  false  representation  of  some  mat- 
ter or  thing  collateral  to  it.     In  all  of  them  it  will  be  seen  that  the 
party  knowingly  executes  the  very  instrument  which  he  intended, 
but  is  induced  to  do  so  by  means  of  some  fraud  in  the  treaty,  or 
some   fraudulent   representation   or   pretense.      In  this  category   is 
included  the  case  of  a  man  who  can  read  the  instrument  which  he 
signs,  seals  and  delivers,  but  refuses  or  neglects  to  do  so.     Such  a 
man  is  bound  by  the  deed  at  law,  though  a  court  of  equity  may 
give  relief  against  it.     In  support  of  this  position  the  authority  of 
Shepherd's  Touchstone  is  directly  in  point:     "If  the  party  that  is 
to  seal   the  deed  can   read  himself,  and  doth  not,  or,  being  an   il- 
literate or  blind  man,  doth  not  require  to  hear  the  deed  read,  or 
the   contents   thereof   declared;   in   these   cases,   albeit   the   deed   be 
contrary  to  lhs  mind,   vet  it   is  good  and  unavoidable  at  law;  but 


REALITY    OF    CONSENT.       FRAUD.  343 

equity  may  correct  mistakes,  frauds,"  etc.     See  1   Shep.  Touch.,  56 
(30  Law  Lib.,  121). 

While  coming  to  the  conclusion  that  the  deed  in  the  case  now 
before  us  is  not  one  which  can  be  avoided  at  law  we  are  aware 
that  a  different  decision  was  made  in  the  case  of  AIcKerrall  v. 
Cheek,  9  N.  C,  343.  There  a  sheriff's  deed  conveyed  300  acres 
of  land,  but  it  having  been  proved  that  he  intended  to  convey  only 
120,  and  would  not  have  executed  the  deed,  had  not  the  courses, 
of  which  he  was  ignorant,  been  inserted  in  such  a  way  as  to  de- 
ceive him  as  to  the  quantity,  it  was  held  that  the  deed  was  not 
conclusive,  and  that  the  question  ought  to  have  been  left  to  the 
jury  to  say  whether  it  was  fraudulently  obtained;  for,  of  the  ques- 
tion of  fraud,  a  court  of  law  had  cognizance  as  well  as  a  court  of 
equity.  The  case  was  decided  without  argument,  and  no  authori- 
ties are  referred  to  in  support  of  the  opinion  of  the  court.  What 
is  more  material  in  lessening  the  authority  of  the  case,  not  a  word 
is  said  about  the  distinction  between  fraud  in  the  factum  of  the 
deed  and  fraud  in  the  consideration,  or  in  some  matter  collateral 
to  the  deed.  That  distinction  and  the  reasons  upon  which  it  is 
founded,  in  assigning  one  kind  of  fraud  to  the  jurisdiction  of  a 
court  of  law,  and  another  to  that  of  a  court  of  equity,  seems  to 
have  been  first  noticed  and  explained  in  this  State  in  the  case  of 
Logan  v.  Simmons,  18  N.  C,  13.  In  that  case  these  remarks  are 
found :  "The  counsel  for  the  plaintiff,  however,  insisted  upon  the 
general  observation,  that  upon  questions  of  fraud,  the  jurisdiction 
of  courts  of  law  and  equity  is  concurrent.  In  its  generality  that 
position  is  inaccurate.  As  to  many  and  most  cases  it  is  true  ;  but 
there  are  numerous  frauds  which  can  be  alleged,  investigated  and 
relieved  against  in  equity  only.  Where  a  conveyance  is  not  avoided 
by  statute,  and  where  the  objection  is  grounded  upon  imposition 
in  the  treaty,  and  not  upon  undue  and  unlawful  means  for  obtain- 
ing the  execution — the  factum,  of  the  particular  instrument,  relief 
in  equity  is  most  appropriate,  and  generally  can  be  had  there  only. 
A  court  of  equity  can  do  complete  justice  in  such  cases  by  holding 
the  instrument  to  be  a  security  for  what  was  advanced  upon  the 
treaty  or  done  under  the  contract,  while  a  court  of  law  would  be 
in  danger  of  doing  wrong  to  one  of  the  parties,  at  all  events,  by 
being  obliged  to  pronounce  the  whole  conclusively  void  or  valid, 
for  all  purposes."  McKerall  v.  Cheek,  ubi  supra,  affords  an  in- 
stance of  what  would  be  the  hardship  and  injustice  of  allowing  the 
conveyances  to  be  avoided  at  law ;  the  sheriff's  deed  would  not 
have  conveyed  even  what  the  parties  intended  to  convey ;  and  thus 
innocent  persons  claiming  under  him  would  have  been  defeated  of 
their  just  rights  ;  while  in  a  court  of  equity  the  instrument  would 
have  been  avoided  only  as  to  the  part  of  the  land  fraudulently  in- 


344  FORMATION    OF    CONTRACT. 

serted  in  it.  At  all  events,  the  court  of  equity  would  not  have 
avoided  it  in  toto,  but  would  have  so  moulded  it  as  to  do  exact 
justice  between  the  respective  parties.  For  these  reasons,  we  are 
of  opinion  that  the  decision  in  McKerall  v.  Cheek  can  not  be  sus- 
tained, and  that  His  Honor  in  the  court  below  erred  in  following 
that  case,  instead  of  the  principle  of  the  more  recent  decisions  of 
this  court.  The  judgment  must  be  reversed,  and  a  venire  de  novo 
awarded. 

To  the  same  effect  is  Devereux  v.  Burgwyn,  33 — 490;  Hyman  v.  Moore, 
48—416;  Hill  v.  Whitfield.  48— p.  123.  Under  the  present  practice  the 
same  distinction  exists,  but  the  remedy  in  both  cases  is  in  one  court. 
Devereux  v.  McMahon,  108^p.  147;  Medlin  v.  Buford,  115—260;  Dixon  v. 
Trust  Co.,  115—274;  Cutler  v.  Lumber  Co.,  128—477;  Dorsett  v.  Mfg.  Co., 
131— p.  259;  Griffin  v.  Lumber  Co..  140— p.  519;  Hayes  v.  R.  R,  143— p.  129. 
If  the  grantor  is  illiterate  and  demands  to  have  the  deed  read  to  him, 
rind  it  is  read  falsely,  it  is  fraud  in  factum;  but  if  he  does  not  ask  to 
have  it  read,  or  asks  to  have  it  read  and  there  is  no  refusal  but  only  a 
failure  to  do  so,  and  he  signs  it,  there  is  no  fraud.  School  Com.  v. 
Kesler,   67— p.   448. 

For  other  instances,  see  Douglas  v.  Matting,  29  Iowa,  498,  4  A.  R.,  238; 
Gibbs  v.  Linabury,  22  Mich.,  479,  7  A.  R.,  675;  Walker  v.  Egbert,  29  Wis, 
194,  9  A.R.,  548;  Bedell  v.  Herring,  77  Cal,  572,  11  A.  S.  R,  307;  Thor- 
oughgood's  case,  2  Co.  Rep.,  9,  6  E.  R.  C,  202;  Foster  v.  Mackinnon 
(1869),  L.  R,  4,  C.  P.,  704;  6  R.  C.  L,  632. 

8.  Effect   upon   the   rights    of   the   parties. 

(139)  FIELDS  v.  BROWN, 

160  N.  C,  295,  76  S.  E.,  8—1912. 

This  was  an  action  to  recover  possession  of  a  mule  which  the 
plaintiff  had  exchanged  with  the  defendant  for  a  bay  mare,  and 
for  damages  for  deceit  and  false  warranty.  It  was  alleged  that 
the  defendant  represented  the  mare  to  be  sound  and  all  right, 
good  to  work,  gentle  for  driving,  etc.,  and  that  these  representa- 
tions were  false,  and  deceived  the  plaintiff  to  his  injury.  There 
was  a  judgment  of  nonsuit  against  the  plaintiff,  and  he  appealed. 

Walker,  J.  .  .  .  The  plaintiff  elected,  as  he  had  the  right  to  do, 
to  sue  for  the  mule,  upon  the  ground  that  the  fraud  avoided  the 
contract  of  exchange,  and,  therefore,  that  he  is  entitled  to  be  re- 
stored to  its  possession  and  to  have  judgment  for  any  resulting 
or  consequential  damages  he  has  sustained  by  the  deceit  and  false 
warranty.  Pritchard  v.  Smith,  160  N.  C,  79.  A  person  who  has 
been  fraudulently  induced  to  enter  into  a  contract  has  the  choice 
of  several  remedies.  He  may  repudiate  the  contract,  and,  tender- 
ing back  what  he  has  received  under  it,  may  recover  what  he  has 
parted  with  or  its  value ;  or  he  may  affirm  the  contract,  keeping 
whatever  property  or  advantage  he  has  derived  under  it,  and  may 
recover  in  an  action  of  deceit  the  damages  caused  by  the   fraud. 


REALITY  OF  CONSENT.   FRAUD.  345 

While  this  affirmance  may  preclude  him   from  rescinding  the  con- 
tract,   it    does    not    prevent    his    maintaining    an    action    of    deceit. 
Moreover,  if  sued  upon  the  contract,  he  may  set  up  the  fraud  as 
a  defense,  or  as  a  basis  of  a  claim  for  damages  by  way  of  recoup- 
ment or  counterclaim.     And  in  a  proper  case  the  defrauded  party 
may  be  entitled  to  the  equitable  remedies  of  rescission  and  cancel- 
lation or  reformation.     As  a  general  rule,  however,  the  defrauded 
party  can  not  both  rescind  and  maintain  an  action  of  deceit.     If 
he   elects   to   rescind   the   contract,   he   may   recover   what   he   has 
parted  with  under  it,  but  can  not  recover  damages  for  the  fraud. 
The  latter  rule,  as  applied  to  a  perfect  rescission  of  the  contract, 
is  based,  not  alone  upon  the  principle  that  the  party  has  elected 
his  remedy,  but  also  on  the  fact  that  he  has  sustained  no  damage. 
20  Cyc,  87,  88,  89,  and  notes.     This  rule,  of  course,  is  bottomed 
upon  the  theory  that  he  has  suffered  no  loss  that  will  not  be  fully 
repaired  by  the  return  to  him  of  what  he  has  given  up.     If,  how- 
ever,  a  perfected   rescission   does   not  place   the   injured  party   in 
statu  quo,  as  where  he  has  suffered  damage  which  the  rescission 
and  the  remedies  based  thereon  can  not  repair,  there  is  no  princi- 
ple of  law  which  prevents  him  from  thereafter  maintaining  an  ac- 
tion of   deceit,  and  in  such  cases  a  recovery  has  uniformly  been 
allowed.     20  Cyc,  89,  and  notes,  citing  Faris  v.  Lewis,  2  B.  Mon. 
(Ky.),  375;  Lenox  v.  Fuller,  39  Mich.,  268;  Warren  v.  Cole,  15 
Mich.,  261  ;  1  Bigelow  on  Fraud,  67.     So  an  action  for  deceit  in 
the  making  of  false  representations  inducing  plaintiff  to  sell  goods 
to    defendant   has   been   held   not   necessarily    inconsistent   with    a 
previous  action  of  replevin  to  recover  the  goods.     Lenox  v.  Fuller, 
39  Mich.,  268;  Welch  v.  Seligman,  72  Hun  (N.  Y.),  138,  25  N.  Y. 
Sup.,  363.     See,  also,  Dean  v.  Yates,  22  Ohio  St.,  388;  20  Cyc, 
89,  note.     Since  the  defrauded  party  to  the  contract  has  the  right 
to  affirm  it,  retain  its  benefits,  and  also  recover  damages   for  the 
fraud,  he  may  sue  to  enforce  his  rights  under  the  contract  and  at 
the  same  time  maintain  an  action  for  deceit.     Where  a  person  by 
the  practice  of  fraud  obtains  money  from  another  under  such  cir- 
cumstances that  he  has  no  right  to  retain  it,  the  defrauded  party 
may  waive  the  tort  and  recover  the  money  in  an  action  for  money 
had  and  received,  upon  the  theory  of  an  implied  promise  to  pay 
it.      A   return   or   an   offer   to   return   what   plaintiff   has    received 
under  the  contract  induced  by  the  fraud  is  not  a  condition  prece- 
dent to  his  maintaining  an  action  of  deceit   (if  he  does  not  disaf- 
firm), since  he  is  entitled  to  the  benefit  of  his  contract  plus  the 
damage  caused  bv  the   fraud.     20  Cyc.  90,  91,  and  notes.      See, 
also,  Mav  v.  Loomis,  140  N.  C,  350.     (The  court  also  holds  that 
the  action  should  have  been  sustained  upon  the  false  warranty.) 

Tudgment  reversed. 


346  FORMATION    <>F    CONTRACT. 

At  law,  the  injured  party  may  affirm  the  contract  and  sue  for  damages, 
or  repudiate  the  contract  and  recover  what  he  has  parted  with.  Joyner 
v.  Early,  139—49;  Wilson  v.  White,  80—280;  Wallace  v.  Cohen,  111—103; 
Knight  v.  Houghtalling,  85 — p.  30;  Ransom  v.  Shuler,  43 — 304;  Webb  v. 
Fulchire,  25—485;  Blake  v.  Blacklev,  109—262;  Des  Farges  v.  Pugh,  93- 
31;  May  v.  Loomis,  140—350;  Caldwell  v.  Ins.  Co.,  140—100.  He  may  also 
resist  an  action  by  the  other  party  and  set  up  fraud  as  a  defense.  May  v. 
Loomis,  140 — 350;  Wilson  v.  Hughes,  94 — 182.  The  form  of  action  for 
fraud  or  false  warranty  may  be  either  in  tort  or  contract.  Bullinger  v. 
Marshall,  70—520;  Ashe  v.  Gray,  88—190;  90—137;  Harvey  v.  Hambright. 
98—446;  Hobbs  v.  Bland,  124 — 284.  The  action  for  deceit  or  fraud  re- 
quires the  scienter,  while  the  warranty  does  not.  124 — 284;  Lassiter  v. 
Ward,  33—443;  Blanton  v.  Wall,  49—532;  Chamberlain  v.  Robertson,  52— 
12;  Smith  v.  Newberry,  140—385;  Food  Co.  v.  Elliott.  151—393;  Stewart 
v.  Realtv  Co.,  159—230;  Hodges  v.  Smith,  159—525;  Mord.  &  Mc.Rem., 
704,  706. 

In  equity,  the  injured  party  may  repudiate  the  contract  and  ask  for 
rescission  and  cancellation  of  the  instrument,  or  he  may  resist  a  suit  for 
specific  performance ;  but  he  must  act  promptly  after  discovering  the 
fraud,  must  act  decidedly,  must  rescind  or  affirm  in  toto,  and  generally 
upon  rescission  place  the  other  partv  in  statu  quo.  May  v.  Loomis,  140 — 
350;  Knight  v.  Houghtalling,  85—17;  Alexander  v.  Utley,  42—242;  Moore 
v.  Reed,  37—580;   Caldwell  v.   Stirewalt,   100—201;   Davis  v.   Ely,   104-16. 

For  statute  of  limitations,  see  Clark's  Code,  sec.  155  (9),  and  cases 
cited;    Hooker   v.   Worthington,    134 — 283;    Banner   v.    Stoteslmry.    139 — 3. 

9.  Rights   of   third   persons. 

(140)   VASS  v.  RIDDICK, 

89   N.   C.  6—1883. 

Civil  action  on  a  promissory  note.  Judgment  for  the  plaintiff, 
and  the  defendant  appealed. 

Ashe,  J.  On  the  trial,  it  was  conceded  that  when  Riddick 
signed  the  note  the  names  of  Leroy  G.  Bagley  and  W.  H.  Bagley 
were  on  the  note,  and  that  he  signed  the  same  believing  the  name 
of  W.  H.  Bagley  to  be  genuine.  It  was  admitted  that  on  or  about 
the  date  of  the  note,  and  after  Riddick  had  signed  it,  Leroy  G. 
Bagley  took  it  to  the  plaintiff,  who,  believing  the  signatures  of  all 
the  signers  of  the  note  to  be  genuine,  loaned  the  amount  of  the 
note,  less  one  year's  interest,  and  that  no  part  of  the  same  had 
been  paid. 

x\fter  the  verdict  was  rendered,  the  question  of  the  liability  of 
the  defendant  upon  the  verdict  and  admissions  above  set  forth, 
was  argued  before  the  court,  and  the  court  being  of  opinion  with 
the  plaintiff,  rendered  judgment  in  his  favor. 

The  record  fails  to  state  the  grounds  taken  by  the  defendant's 
counsel  in  the  court  below,  but  we  presume  it  was  the  same  that 
was  urged  in  this  court,  viz.,  that  the  name  of  W.  H.  Bagley  hav- 
ing been  forged,  and  the  defendant  seeing  his  name  to  the  note 
and  believing  it  was  genuine,  and  that  he  was  good  for  the  amount, 
was  induced  to  sign  it,  and  by  reason  of  the  fraud  and  imposition 


REAUTV    OF    CONSENT.       FRAUD.  347 

thus  practiced  upon  him  by  Leroy  G.  Bagley,  he  was  discharged 
from  liability  on  the  note,  and  judgment  ought  not  to  be  rendered 
against  him  upon  the  finding  of  the  jury. 

Such  a  defense  could  not  have  availed  the  defendant,  if  it  had 
been  taken  on  the  trial ;  for  under  our  law  all  bills,  bonds  and 
promissory  notes  are  joint  and  several,  and  an  action  may  be 
brought  against  one  or  more  of  the  parties  thereto,  at  the  option 
of  the  plaintiff.  C.  C.  P.,  sec.  63.  And  when  bonds  and  notes  are 
thus  several  as  well  as  joint,  in  the  absence  of  any  reservation  or 
condition  at  the  time  of  the  delivery  of  the  instrument,  the  obligors 
or  makers  are  separately  bound ;  and  the  obligation  assumed  by 
each  is  the  same  as  upon  an  independent  contract.  City  of  Sacra- 
mento v.  Dunlap,  14  Cal,  421.  Hence  it  is  held,  that  if  a  bond 
(and  there  is  no  difference  in  this  respect  between  a  bond  and  a 
promissory  note)  be  signed  and  delivered  without  any  condition  or 
reservation  annexed,  although  it  may  appear  to  have  been  con- 
templated by  the  parties  that  it  should  be  signed  by  others,  it  is 
the  deed  of  the  obligor  and  will  be  binding  on  him,  although  the 
others  do  not  sign.  Haskins  v.  Lombard,  10  Maine,  140;  Barnes 
v.  Lewis,  73  N.  C,  138;  Scott  v.  Whipple,  5  Greenl.,  336;  State 
v.  Peck,  53  Maine,  284.  And  even  where  there  is  a  condition  or 
reservation  imposed  at  the  time  of  delivery,  if  it  is  stipulated  with 
the  principal  obligor  or  maker,  and  the  payee  or  obligee  has  no 
knowledge  of  it,  the  maker  or  obligor  will  be  bound.  As  in  Gwyn 
v.  Patterson,  72  N.  C,  189,  where  it  was  held,  "that  one  who 
signed  a  covenant  as  surety,  upon  the  condition  and  agreement 
between  him  and  his  principal  that  it  is  not  to  be  binding  upon 
him  or  delivered  to  the  covenantee,  unless  another  person  should 
sign  it  as  surety,  is  bound  thereby,  although  the  principal  to  whom 
he  entrusted  it  delivered  it  to  the  covenantee  without  a  compliance 
with  such  condition,  of  which,  and  its  breach,  the  latter  has  had  no 
notice."  So  in  Bigelow  v.  Comegys,  5  Ohio,  256,  which  was  an 
action  brought  upon  a  replevin  bond  that  was  required  by  statute 
to  be  executed  with  two  sureties  ;  it  was  held  it  was  not  void  be- 
cause actually  signed  and  delivered  by  the  party  with  one  surety 
only,  the  name  of  another  person  appearing  on  the  bond,  as  surety, 
being  a  forgery.  The  principle  upon  which  it  was  decided  was, 
that  an  obligor  who  has  signed  a  bond  can  not  avoid  his  liability 
by  showing  that  he  was  induced  to  execute  the  bond  by  the  fraud 
of  one  of  the  co-obligors,  in  which  the  obligee  had  no  participation 
whatever.  To  the  same  effect  is  Barnes  v.  Lewis,  supra;  and  also 
Anderson  v.  Warren,  71  111.,  20,  which,  like  the  case  at  bar,  was 
an  action  upon  a  promissory  note,  and  it  was  sought  by  one  of  the 
makers  to  avoid  payment  on  the  ground  the  note  was  obtained  by 
the  fraud  and  circumvention  of  a  co-maker,  which  was  not  partic- 


348  FORMATION    OF    CONTRACT. 

ipated  in  by  the  payee ;  and  it  was  held  that  his  rights  could  not 
be  affected  by  any  fraud  practiced  between  the  makers  of  the  note. 

The  doctrine  established  by  these  cases  is  founded  upon  the  set- 
tled rule,  that  where  one  of  two  persons  must  suffer  loss  by  the 
fraud  or  misconduct  of  a  third  person,  he  who  first  reposes  the 
confidence,  or  by  his  negligent  conduct  made  it  possible  for  the 
loss  to  occur,  must  bear  the  loss ;  for  it  is  against  reason  that  an 
innocent  party  should  suffer  for  the  negligent  conduct  of  another. 

The  facts  in  the  case  before  us  bring  it  directly  within  the  appli- 
cation of  the  principle  enunciated  in  the  cited  cases.  Riddick  was 
the  maker  with  Leroy  G.  Bagley,  who  forged  the  name  of  W.  H. 
Bagley,  and  Yass  the  payee.  The  loss  must  fall  upon  one  or  the 
other.  The  plaintiff  was  the  innocent  payee  of  the  note.  He  had 
no  knowledge  of  the  fraud  practiced  upon  the  defendant  by  Leroy 
G.  Bagley ;  but  the  defendant  was  guilty  of  negligence  in  not  in- 
forming himself  of  the  genuineness  of  the  signature  of  W.  H. 
Bagley  before  signing  the  note  and  he  must  therefore  bear  the  loss. 

There  is  no  error.     The  judgment  of  the  Superior  Court  is 

Affirmed. 

See  also  Wallace  v.  Cohen.  111—103;  Sprinkle  v.  Welborn,  140—163; 
R.  R.  v.  Kitchen.  91—39:  Bank  v.  Burgwyn,  108—62;  Medlin  v.  Buford, 
115—260. 

10.  Constructive    fraud. 

i  141  )    LEE  and  others  v.   PEARCE  and  wife, 

68  X.   C,  76—1873. 

Civil  action  for  land.  The  plaintiffs  claim  under  the  will  of 
.Mary  A.  Lindsay;  the  defendants  claim  under  a  deed  executed  by 
.Mary  A.  Lindsay  to  the  feme  defendant;  the  plaintiffs  allege  that 
this  deed  was  obtained  by  fraud,  in  that  the  defendant  was  the 
confidential  agent  of  the  grantor,  and  induced  her  to  sign  the  deed 
when  she  intended  to  execute  a  will ;  defendants  denied  the  alle- 
gations  of  fraud;  there  was  evidence  that  the  grantor  spoke  of  the 
deed  as  her  will,  that  the  defendants  were  frequently  at  her  house, 
and  the  defendant,  l'earce.  acted  as  her  agent  in  buying  wood,  etc. 
The  person  who  wrote  the  deed  testified  that  he  read  it  over  to 
tlie  grantor,  and  she  was  satisfied  with  it. 

The  plaintiff-  asked  the  court  to  charge  the  jury  that  if  Pearce 
was  the  confidential  agent  of  the  grantor,  the  deed  was  void  with- 
out other  evidence  of  fraud.  The  court  declined  this,  and  in- 
structed the  jury  that  If  Pearce  was  the  confidential  agent,  as  a 
ward  in  England,  or  in  tlie  relation  of  attorney  and  client,  so 
that  he  was  implicitly  trusted  and  looked  to  for  advice,  it  was  a 
strong  badge  oi    fraud,  if  he  procured  a  conveyance  of  property 


REALITY    OF    CONSENT.       FRAUD.  349 

for  his  own  benefit,  as  to  his  wife,  and  with  other  evidence  might 
justify  a  finding  of  fraud;  but  the  proof  must  be  clear  and  satis- 
factory. 

Pearson,  C.  J.     "The  innocence  of  a  party  who  has  profited  by 
a   fraud  will  not  entitle  him  to  retain  the  fruit  of  another  man's 
misconduct,  or  exempt  him  from  the  duty  of  restitution.-'     Adams 
Equity,   176.     So  the  case  may  be  relieved  from  complication,  by 
the  fact  that  the  deed  is  made  to  Mrs.  Pearce,  and  may  be  treated 
as  if  it  had  been  made  to  Pearce,  to  whom  the  fraud  is  imputed. 
The  provision  in  our  present  constitution,  by  which  the  distinc- 
tion between  actions  at  law  and  suits  in  equity  is  abolished,  and 
the  subsequent  legislation  affects  only  the  mode  of  procedure,  and 
leaves  the  principles  of  law  and  equity  intact.     The  courts  as  now 
constituted,  give  relief,  not  merely  to  the  extent  and  in  the  cases 
where  it  was  heretofore  given  by  the  courts  of  law,  but  also  to  the 
extent  and  in  the  cases  where  it  was  heretofore  given  by  courts  of 
equity;   in   other   words,  the  principles   of   both   systems   are   pre- 
served,  the   only   change   being,   that   these   principles   are   applied 
and  acted  on  in  one  court  and  in  one  mode  of  procedure.     For 
illustration,  under  the  old  system,  if  there  was   fraud  in  the  fac- 
tum, i.  e.,  when  one  paper  is  substituted  for  another,  or  when  the 
party   executes   a   paper   through   actual    fear   of    death,   or   great 
bodily  harm,   the  instrument  is  void,  never   was  the  deed  of  the 
party,  and  is  treated  in  a  court  of  law  as  a  nullity.     This  was  the 
extent  to  which  courts  of  law,  by  reason  of  their  peremptory  judg- 
ments and  regard  for  deeds,  gave  relief. 

But  courts  of  equity  can  mould  and  shape  decrees  so  as  to  mete 
out  exact  justice  between  the  parties,  and  regard  deeds  merely  as 
a  high  species  of  evidence,  and  for  these  reasons  give  relief  beyond 
the  point  at  which  courts  of  law  stopped.  So  when  there  was  no 
fraud  in  the  factum,  and  no  physical  duress,  a  court  of  equity 
would  take  the  case  in  hand  and  give  fitting  relief  if  the  execu- 
tion of  the  deed  be  procured  by  fraud  or  moral  duress ;  if  a  bond, 
by  having  it  canceled;  if  a  conveyance,  by  a  decree,  treating  the 
deed  as  having  passed  the  legal  title,  and  converting  the  party  into 
a  trustee  who  is  ordered  to  reconvey  upon  such  terms  as  con- 
science requires.  Under  the  present  system  the  same  court  gives 
relief  in  all  of  these  cases,  and  the  judgment  is  framed  to  suit  the 
case.  C.  C.  P..  216,  "a  judgment  is  the  final  determination  of  the 
rights  of  the  parties  in  an  action."  The  equities  of  the  parties 
being  involved  in  this  final  determination,  as  well  as  their  legal 
rights,  it  follows  that  the  court  must  now  give  such  judgment  as 
will  determine  these  equities  and  legal  rights,  in  such  manner  as 
has  heretofore  been  according  to  the  course  of  the  courts  respec- 
tively:  for  example,  a  cestui  que  trust  conveys  to  his  trustee  at  an 


350  FORMATION    OF    CONTRACT. 

inadequate  price  ;  the  decree  would  have  heen,  that  the  trustee  re- 
convev  on  repayment,  subject  to  an  account  for  the  profits.  The 
judgment  now  is,  that  the  plaintiff  recover  the  land  and  damages 
and  have  a  reconveyance  on  repayment  of  the  price  received, 
whether  a  consideration  has  been  paid  or  the  conveyance  be  a 
mere  act  of  bounty.  Owing  to  our  registration  laws,  the  judgment 
for  land  should  direct  a  reconveyance  to  make  the  title  appear  on 
the  register's  books. 

As  ancillary  to  the  jurisdiction,  to  avoid  deeds  obtained  by 
fraud,  undue  influence  or  moral  duress,  courts  of  equity  estab- 
lished the  doctrine  that  in  certain  fiduciary  relations,  if  there  be 
dealing  between  the  parties,  on  the  complaint  of  the  party  in  the 
power  of  the  other,  the  relation  of  itself  and  without  other  evi- 
dence, raises  a  presumption  of  fraud,  as  a  matter  of  law,  which 
annuls  the  act  unless  such  presumption  be  rebutted  by  proof  that 
no  fraud  was  committed,  and  no  undue  influence  or  moral  duress 
exerted.  The  doctrine  rests  on  the  idea  not  that  there  is  fraud, 
but  that  there  may  be  fraud,  and  gives  an  artificial  effect  to  the 
relation,  beyond  its  natural  tendency  to  produce  belief.  It  may  be 
harsh  to  presume  fraud,  and  to  take  it  for  granted  that  every  man 
dealing  with  one  who  is  in  his  power,  acts  the  rascal,  unless  he  is 
able  to  prove  to  the  contrary,  which  it  is  hard  to  do  ;  but  the  doc- 
trine was  adopted  from  motives  of  public  policy,  to  prevent  fraud 
as  well  as  to  redress  it,  and  to  discourage  all  dealings  between 
parties  standing  in  these  fiduciary  relations.  It  may  be  said  with 
truth,  that  it  is  in  most  cases,  as  difficult  for  one  in  the  power  of 
another,  to  prove  the  many  acts  and  contrivances  by  which  he  has 
been  taken  advantage  of,  as  it  is  for  the  other  party  to  prove  a 
negative  ;  so  there  is  no  sufficient  reason  for  not  enforcing  a  doc- 
trine, by  which  all  dealing  between  the  parties  is  discountenanced 
— both  bargains  and  bounties. 

In  the  case  before  us,  the  instruction  asks  for  the  application 
of  this  doctrine.  The  learned  Judge  refused  to  give  the  instruc- 
tion, but  assuming  a  certain  intimate  relation  to  be  proved,  left  the 
allegation  of  fraud,  as  an  open  question  of  fact  for  the  jury,  treat- 
ing the  relation  of  the  parties  simply  as  an  important  link  in  the 
chain  of  evidence.  |  The  conrt  then  explains  that  this  presumption 
iv  a  principle  of  equity,  and  not   merely  a  rule  of  evidence.] 

This  imposes  upon  us  the  duty  of  marking  distinctly  the  divid- 
ing line  between  fiduciary  relations,  which  raise  the  presumption 
of  fraud,  as  a  matter  of  law,  and  relations  which  raise  a  presump- 
tion of  fraud  as  a  matter  of  faet  ;  the  duty  is  made  especially  im- 
portanl  by  the  change  in  the  tribunal  for  the  trial  of  issues  of  fact. 
[The  court  here  explains  the  method  of  procedure  in  courts  of 
equity  in  regard  to  this  presumption.] 


REALITY    OF    CONSENT.       FRAUD.  351 

Adams,  a  writer  of  remarkable  clearness,  uses  this  expression  in 
treating  of  the  principles  on  which  dealings  between  persons  hold- 
ing fiduciary  relations,  are  set  aside  in  equity,  when  the  only  rela- 
tion is  that  of  friendly  habits,  etc.  "But  no  rigorous  definition  can 
be  laid  down  so  as  to  distinguish  precisely  between  the  effects  of 
natural  and  often  unavoidable  kindness,  and  those  of  undue  influ- 
ence or  undue  advantage."  Adams  Eq.,  185.  Every  rule  of  law 
must  be  "rigorous,"  that  is,  fixed  and  definite,  and  must  "distin- 
guish precisely."  Certainty  is  the  very  essence  of  a  rule  of  law. 
So  these  words  are  only  appropriate  to  presumptions  of  fact.  .  .  . 

A  presumption  of  law  can  not  be  graduated  by  degrees  of  force. 
The  relation  relied  on  to  raise  a  presumption  as  a  matter  of  law, 
must  of  itself  and  without  other  evidence,  either  be  sufficient  for 
the  purpose  or  not  sufficient ;  if  it  be  sufficient,  the  law  raises  the 
presumption  and  that  ends  the  matter,  unless  the  presumption  be 
rebutted;  if  the  relation  be  not  sufficient,  the  instant  you  let  it  go 
and  reach  out  for  other  matter  to  aid  in  proving  the  fact  alleged, 
it  ceases  to  be  a  presumption  of  law,  and  becomes  a  presumption 
of  fact,  to  pass  for  what  it  is  worth,  and  no  more,  and  the  tribunal 
trying  the  issues  of  fact,  may  consider  it  as  having  a  slight  or 
strong  tendency  to  produce  belief,  according  to  which  its  degree  of 
force  will  be  graduated.  (  The  court  then  discusses  the  different 
kinds  of  presumptions.) 

After  a  full  consideration  of  the  authorities  and  "the  reason  of 
the  thing,"  we  are  of  opinion,  that  only  "the  known  and  definite 
fiduciary  relations,"  by  which  one  person  is  put  in  the  power  of 
another,  are  sufficient  under  our  present  judiciary  system  to  raise 
a  presumption  of  fraud,  as  a  matter  of  law  to  be  laid  down  by  the 
Judge,  as  decisive  of  the  issue  unless  rebutted. 

For  instances,  and  by  way  of  illustration:  1.  Trustee  and  cestui 
que  trust  dealing  in  reference  to  the  trust  fund.  2.  Attorney  and 
client,  in  respect  to  the  matter  wherein  the  relationship  exists. 
3.  Guardian  and  ward,  just  after  the  ward  arrives  at  age.  4.  When 
one  is  the  general  agent  of  another  and  has  entire  management, 
so  as  to  be  in  effect,  as  much  his  guardian  as  the  regularly  ap- 
pointed guardian  of  an  infant.  There  may  be  other  instances. 
Fiduciary  relations  that  do  not  fall  under  the  first  class,  raise  a 
presumption  of  fraud  as  a  matter  of  fact  to  pass  before  the  jury 
for  what  it  may  be  worth.  For  instance:  1.  Family  physicians; 
2.  A  minister  of  religion  ;  3.  Parent  and  child  ;  4.  When  the  only 
relation  is  that  of  friendly  intercourse  and  habitual  reliance  for 
advice  and  assistance,  and  occasional  employment  in  matters  of 
business  as  agent. 

Our  case  would  seem,  from  what  appears  by  the  statement  sent, 
to  come  under  this  instance ;  for  there  is  no  evidence  that  Pearce 


352  FORMATION    OF    CONTRACT. 

was  the  general  agent  of  Mrs.  Lindsay,  entrusted  with  the  man- 
agement of  all  of  her  affairs  of  business,  although  he  was  looked 
up  to  by  her  and  relied  on  for  advice  and  assistance,  and  fre- 
quently acted  as  her  agent  in  buying  wood  and  leasing  her  prop- 
erty; all  of  which  evidence  should  be  passed  upon  by  a  jury,  as 
raising  a  presumption  of  fraud  or  undue  influence  and  as  being  a 
link  in  a  chain  of  circumstantial  evidence.     .     .     . 

From  the  exposition  of  the  subject,  that  I  have  taken  the  pains 
to  make,  it  appears,  in  certain  known  and  fiduciary  relations,  the 
chancellors,  according  to  the  mode  of  trial  in  courts  of  equity, 
made  a  presumption  of  fraud  as  a  matter  of  law;  in  other  rela- 
tions, the  chancellors  made  a  presumption  of  fact,  which,  with 
other  evidence,  might  create  belief  of   fraud. 

According  to  the  evidence  sent  to  us,  there  is  nothing  to  show 
that  Pearce  was  the  general  agent  of  Mrs.  Lindsay,  having  charge 
of  all  of  her  affairs,  like  a  guardian  in  respect  to  his  ward. 

So  the  instruction  asked  for  was  properly  refused ;  but  His 
Honor  assumes  that  there  may  have  been  such  a  general  agency, 
and  upon  that  supposition  gives  to  the  relation  the  effect  of  a 
strong  badge  of  fraud,  which  with  other  evidence  [might  show 
fraud],  treating  it  as  an  open  question  of  fact.  Under  this  condi- 
tion of  things,  we  feel  it  to  be  our  duty,  to  order  a  second  trial, 
upon  issues  to  be  agreed  on  by  the  counsel,  or  settled  by  the  court 
in  pursuance  of  the  rule  fixed  by  this  court. 

But  apart  from  this,  the  plaintiff  is  entitled  to  a  venire  de  novo, 
for  error  in  the  charge  in  this :  His  Honor,  after  instructing  the 
jury,  that  fraud  must  be  proved  (which  is  true  except  when  from 
certain  relations  fraud  is  presumed  as  a  matter  of  law)  and  after 
explaining  the  onus  probandi,  tells  the  jury  that  to  justify  a  ver- 
dict finding  fraud,  they  must  be  satisfied  "beyond  a  reasonable 
doubt." 

It  is  very  "questionable  whether  this  formula,  which  has  been 
acted  upon  in  the  trial  of  capital  cases,  has  answered  any  useful 
purpose ;  but  it  has  never  been  extended  to  civil  actions.  There 
the  rule  is,  if  the  evidence  creates  in  the  mind  of  the  jury  a  belief 
that  the  allegation  is  true,  they  should  so  find. 

Per  Curiam.  Venire  de  novo. 

See  also  Smith  v.  Moore,  142— p.  295;  Sprinkle  v.  Wellborn,  140-163; 
Mauney  v.  Redwine.  119—534;  Brown  v.  Mitchell,  102— o.  368;  McLeod  v. 
Bullard,  S4— 515. 

Confidential  relations  as  shown  in  other  cases:  Mortgagor  and  mort- 
gagee, Jennings  v.  Hinton,  128—214;  Hines  v.  Outlaw,  121—51;  Hall  v. 
Lewis,  118—509;  Jones  v.  Pnllen,  115—471;  Dawkins  v.  Patterson.  87- 
384;  Tillery  v.  Wrenn,  86—217;  Whitehead  v.  Ilellen.  78—99;  McLeod  v. 
Bullard,  84—515.  Guardian  and  ward,  Williams  v.  Powell.  .56—460; 
McLarty  v.  Broom,  67 — 311;  Johnston  v.  Haynes,  68 — 509;  Harris  v. 
Carstarphen,  f>9— 416:  Batts  v.  Winstead,  77—238.  Principal  and  agent. 
Buffalow    v.    Buffalow,   22—241:    Mullins   v.    McCandless,   57—425;    Franklin 


REALITY    OF    CONSENT.       DURESS.  3d3 

v.  Redman,  58 — 420 :  Oldham  v.  Oldham,  58—89:  Hartley  v.  Estis,  62—167. 
Executor  or  administrator  and  next  of  kin,  Baxter  v.  Costin,  45 — 262; 
Cole  v.  Stokes,  113 — 270.  Director  or  officer  of  a  corporation,  Hill  v. 
Lumber  Co.,  113 — 173.  Husband  and  wife,  Howard  v.  Early,  126 — 170; 
McRae  v.  Battle,  69 — 98 ;  but  not  in  case  of  suitor  and  fiance.  Atkins  v. 
Withers,  94 — 581.  Parent  and  child,  where  the  superior  position  is  pre- 
sumed to  control,  Wessel  v.  Rathjohn,  89 — p.  383.  For  other  cases  in 
which  the  rule  has  been  applied,  see  Tuttle  v.  Tuttle,  146 — 484 ;  Smith  v. 
Moore,  149 — 185;  Edwards  v.  Supply  Co.,  150 — 171;  Bellamy  v.  Andrews, 
151—256:  King  v.  R.  R.,  157 — 44 :  Pritchard  v.  Smith,  160—79;  Alford  v. 
Moore,  161—382;  Huguenin  v.  Baselv,  14  Ves.,  273,  6  E.  R.  C,  834,  3 
Wh.  &  T.  L.  Cas.,  95   (463)  ;  Bisph.  Eq,  sec.  233. 

Fraud  on  marital  rights. — Where  a  person  about  to  be  married,  makes 
a  voluntary  conveyance  of  his  or  her  property,  without  the  knowledge  of 
the  intended  husband  or  wife,  it  is  a  fraud  upon  the  marital  rights,  and 
the  deed  mav  be  set  aside.  Logan  v.  Simmons,  38 — 487;  Tisdale  v.  Bailev, 
41—358;  Strong  v.  Menzies.  41—544;  Taylor  v.  Richman,  45—278;  Spencer 
v.  Spencer,  56—404 ;  Poston  v.  Gillespie.  58 — 258 ;  Brinkley  v.  Brinkley, 
128 — 503 ;  but  an  innocent  purchaser  would  be  protected,  Brinkley  v. 
Spruill,   130 — 46;   Bisph,   Eq.,  sec.  253. 

Trustee  dealing  with  trust  property.— At  law  a  sale  by  a  trustee  to 
himself  is  a  nullity,  but  a  deed  made  to  a  third  person  with  agreement  to 
reconvey,  passes  the  legal  title;  but  it  may  be  avoided  in  equity,  not 
because  there  is,  but  because  there  may  be  fraud.  Froneberger  v.  Lewis, 
79—426;  Gibson  v.  Barbour,  100— p.  197;  Rigden  v.  Jones,  8— p.  504; 
Gorden  v.  Finley,  10 — p.  242;  Boyd  v.  Hawkins,  17 — p.  207;  Hunt  v.  Bass, 
17—292;  Haskins  v.  Wilson,  20—385;  Ford  v.  Blount,  25—516;  Brothers 
v.  Brothers,  42—150;  McLeod  v.  McCall,  48—87;  Robinson  v.  Clark,  52— 
562;  Patton  v.  Thompson,  55—285;  Elliott  v.  Pool,  56—17;  West  v.  Sloan, 
56—102;  Pitt  v.  Petwav,  34—69:  Roberts  v.  Roberts,  65—27;  Stilly  v.  Rice, 
67—178:  Whitehead  v.  Hellen,  76—99;  Joyner  v.  Farmer,  78—196;  Taylor 
v.  Heggie,  83 — 244 ;  Stradlev  v.  King,  84 — 635 ;  Dawkins  v.  Patterson,  87 — 
384;  Bruner  v.  Threadgill,  88—361;  Howell  v.  Tyler,  91— p.  214;  Sumner 
v.  Sessoms,  94— p.  375 :  Tavloe  v.  Tavloe,  108— p.  73 ;  Whitehead  v.  White- 
hurst,  108—458;  Averitt  v.  Elliott,  "109—560;  Cole  v.  Stokes,  113—270; 
Jones  v.  Pullen,   115— p.  471  :  Russell  v.  Roberts,   121—322. 

Attornev  appearing  on  both  sides,  the  judgment  is  voidable.  Moore  v. 
Gidney,  75— p.  40;  Molyneux  v.  Huey,  81— p.  113;  Gooch  v.  Peebles.  105 — 
411 ;  Arrington  v.  Arrington,  116 — 170:  Cotton  Mills  v.  Cotton  Mills,  116 — 
p.  652. 

Fraudulent  conveyances  under  statutes  13th  and  27th  Eliz.  (Revisal,  sees. 
960,  961)  are  valid  inter  partes,  but  may  be  set  aside  for  creditors  or 
subsequent   purchasers. 

For  constructive  fraud  generally,  see  1  Page  Cont.,  176;  Bispham's 
Equity,  sees.  230  to  239. 

Sec.  4.  Duress. 

1.  By  imprisonment. 

(142)   MEADOWS  v.  SMITH, 

42  N.  C,  7—1850. 

Pearson,  J.  The  plaintiff  alleges  that  he  is  a  poor,  ignorant 
old  man,  seventy4ive  years  of  age,  and  he  never  had  a  lawsuit  be- 
fore in  his  life.  In  January,  1848,  the  defendant  issued  a  writ 
against  him  and  his  son  and  one  Davis,  in  a  case  for  conspiracy, 
laying  the  damage  at  $500.     The  officer,  one  Wells,  came  to  his 


354  FORMATION    OF    CONTRACT. 

house  about  midnight  and  arrested  him;  and,  after  exciting  his. 
fears  by  telling  him  that  the  lawyer  who  issued  the  writ  said  he 
would  do  well  to  compromise  by  giving  his  note  for  $300,  and  by 
telling  him  that  if  it  went  to  court  the  State  would  take  it  up  and 
ruin  him,  and  for  the  second  offense  would  hang  him,  advised 
him,  as  a  friend,  that  he  had  better  go  to  the  house  of  the  defend- 
ant and  settle,  and  said  he  thought  he  could  get  him  off  for  $100. 
After  being  in  custody  until  morning,  he  concluded  to  go  to  the  de- 
fendant and  buy  his  peace.  The  officer  took  him  to  the  defend- 
ant's house,  some  twelve  miles  distant.  He  was  not  at  home,  and 
the  plaintiff,  after  remaining  under  arrest  all  day,  his  alarm  and 
apprehension  being  increased  by  the  combined  artifice  of  the  wife 
of  the  defendant  and  the  officer,  agreed,  if  he  could  be  discharged, 
to  execute  a  note  to  the  defendant  for  $100,  and  pay  the  officer 
$13,  which  was  accordingly  done,  and  he  was  liberated.  The  plain- 
tiff further  alleges  that  the  defendant  had  no  cause  of  action 
against  him  whatever;  that  the  alleged  ground  of  complaint  was, 
that  his  son,  who  had  been  summoned  as  a  witness,  in  the  case  of 
the  State  for  Farmer  and  wife  and  others  against  one  McLure,  on 
his  bond  as  clerk  and  master,  had  failed  to  attend  at  October 
Term,  1845,  in  consequence  of  which  the  case  was  continued ;  and 
the  charge  was,  that  his  son  had  stayed  away,  by  a  conspiracy  be- 
tween the  plaintiff,  his  son  and  Davis.  The  plaintiff  admits  that 
his  son  did  not  attend  at  that  term,  but  avers  that  he  attended  be- 
fore and  afterwards,  and  his  testimony  was  in  no  wise  material, 
and  he  was  subsequently  discharged  by  the  defendant  from  attend- 
ance, and  the  case  was  decided  by  arbitrators,  before  whom  his 
son  was  not  examined. 

The  plaintiff  further  alleges  that  he  had  no  agency  in  keeping 
his  son  from  attending  court,  and  no  wish  to  do  so ;  that  he  had 
no  interest,  connection  or  concern  with  the  suit,  and  knew  not  that 
the  defendant  had  any ;  that  the  defendant  was  not  a  party  of  rec- 
ord, and  the  plaintiff  had  no  knowledge  nor  belief  that  he  was 
beneficially  interested.  The  plaintiff  avers  that  one  year  after  he 
had  recovered  before  the  arbitrators  the  defendant  issued  the  writ, 
without  cause  and  for  the  mere  purpose  of  taking  advantage  of 
him,  and  had,  by  the  falsehood  and  artifice  of  his  agent  and  co- 
adjutor, the  officer  who  served  the  writ,  taken  advantage  of  his 
ignorance  and  fears,  and  extorted  from  him  the  note  of  $100,  upon 
which  the  defendant  lias  since  taken  judgment  and  is  about  to 
issue  execution.     The  prayer  is  for  a  perpetual  injunction. 

The  defendant  denies  that  there  was  any  concert  between  him 
and  the  officer,  to  take  advantage  of  the  plaintiff  and  extort  the 
note  from  him.  He  says  that,  believing  the  plaintiff  had  entered 
into  a  conspiracy  to  keep  his  son   from  attending  court,  whereby 


REALITY    OF    CONSENT.      DURESS.  355 

he  was  greatly  injured,  he  directed  his  attorney  to  issue  the  writ, 
left  home  and   did  not  return,  until  after  the  case  was  compro- 
mised and  the  note  executed,  when  he  received  it  and  intended  to 
collect  it.     He  does  not  state  the  grounds  of  his  belief  as  to  the 
alleged  conspiracy,  nor  aver  the  materiality  of  the  testimony  of  the 
plaintiff's  son,  nor  assign  any  motive  why  he  should  wish  him  not 
to  attend,  and  gives  no  color  to  the  charge  of  conspiracy ;  nor  does 
he  show  any  damage,  except  he  thinks  he  had  to  pay  the  cost  of 
the  term  for  a  continuance.     He  admits,  however,  that  it  does  not 
so  appear  on  the  record,  and  he  admits  he  recovered  before  the 
arbitrators,   without   the  testimony   of   the  plaintiff's   son;   but   he 
says  that,  though  not  a  party  of  record,  he  was  beneficially  inter- 
ested; and  complains  that  the  award  was  only   for  $175,   when 
more  was  due,  but  he  does  not  aver  that  the  result  would  have 
been  different,  if  the  plaintiff's  son  had  been  examined,  or  that  he 
desired  to  examine  him.     He  says,  "That  as  to  the  age  and  ig- 
norance of  the  plaintiff,  your  respondent  knows  but  little,  and  as 
to  his  poverty,  that  is  immaterial."     "He  believes  his  wife  and  son 
and  brother  compromised  the  case  in  his  absence,  because  she  was 
desirous  of  keeping  your  respondent  out  of  litigation."     He  does 
not  believe  they   resorted  to   any   artifice   or   fraud   to   alarm   the 
plaintiff,  who  compromised  willingly,  not  because  he  was  in  fear, 
but  because  he  knew  himself  to  be  guilty.     He  further  says  the 
officer  was  not  authorized  to  act  as  his  friend  in  effecting  the  com- 
promise, "nor  was  he  authorized,  by  any  undue  or  false  and  ex- 
travagant language,  to  endeavor  to  coerce  the  plaintiff  into  a  com- 
promise.    Whatever  of  false  or  nonsensical  matter  the  said  deputy 
sheriff  conveyed  to  the  plaintiff,  your  respondent  claims  that  he  is 
in  no  wise  responsible  for,  even  if  the  facts  were  true;  and  that 
the  officer  was  barely  authorized  to  make  known  to  the  defendants 
in  that  suit  the  terms,  upon  which  they  could  have  the  suit  com- 
promised;    for   this    defendant,   so    far    from   combining   with   the 
officer,  was  not  even  friendly  towards  him  and  had  no  confidence 
in  him.     At  what  hour  of  the  day  or  the  night  the  deputy  sheriff 
served  the  writ,  your  respondent  is  ignorant." 

In  the  language  of  the  court  in  the  case  of  Heath  v.  Cobb,  17 
N.  C,  191,  the  plaintiff  "was  under  duress,  in  the  eye  of  a  court 
of  equity.  He  was  not  in  a  condition  to  be  dealt  with;  he  could 
not  and  did  not  stand  on  his  rights/'  No  one  can  believe  that  the 
plaintiff  executed  the  note  for  the  purpose  of  making  compensa- 
tion for  an  injury  done  to  the  defendant.  On  the  contrary,  every- 
one, who  hears  the  bill  and  answer  read  over,  is  convinced  that 
he  executed  it  to  relieve  himself  from  the  state  of  alarm  and  em- 
barrassment in  which  he  was  involved. 

The  equity  of  the  bill  rests  upon  three  allegations :    The  plaintiff 


356  FORMATION    OF    CONTRACT. 

was  a  poor,  ignorant  old  man,  who  had  never  had  a  lawsuit  in  his 
life.  The  defendant,  without  probable  cause,  issued  a  writ  against 
him  for  a  conspiracy — damages  $500.  The  plaintiff,  being  ar- 
rested and  having  his  fears  excited  by  the  falsehood  and  artifice 
of  the  defendant's  agent,  executed  the  note  to  relieve  himself. 

The  answer  does  not  meet  this  equity.  "As  to  the  age  and  ig- 
norance of  the  plaintiff,  your  respondent  knows  but  little;"  and 
"his  poverty  is  immaterial."  Can  this  be  called  a  full  and  fair 
answer  to  the  first  allegation? 

He  says,  he  honestly  believed  the  plaintiff  was  guilty  of  a  con- 
spiracy ;  but  he  sets  out  no  ground  for  his  belief,  and  leaves  the 
mind  at  a  loss,  even  to  conjecture,  why  he  should  have  taken  up 
such  an  idea.  A  witness,  in  an  unimportant  suit  upon  the  bond  of 
a  clerk  and  master,  fails  to  attend  at  one  term,  having  attended 
punctually  before  and  after,  until  discharged.  The  plaintiff,  his 
father,  has  no  interest  or  concern  in  the  case,  nor  did  he  know 
that  the  defendant  had ;  and  this  forms  the  basis  of  a  grave  charge 
of  conspiracy. 

As  to  the  third  allegation,  the  defendant  says,  "he  is  ignorant 
at  what  hour  of  the  night  or  day  the  defendant  made  the  arrest ;" 
but  he  positively  denies  that  he  was  authorized  to  coerce  a  com- 
promise, by  exciting  the  fears  of  the  plaintiff,  and  claims  not  to  be 
responsible,  if  such  was  the  fact.  The  officer  was  the  agent  of  the 
defendant  in  executing  the  writ,  and  it  is  admitted  that  he  was 
authorized  to  make  known  to  the  plaintiff  the  terms  upon  which 
the  suit  could  be  compromised.  Such  being  the  case,  it  was  as  lit- 
tle as  the  defendant  could  have  done  to  make  inquiry  as  to  the 
truth  of  the  allegations,  made  in  respect  to  the  conduct  of  his 
agent,  before  he  adopted  his  act,  by  receiving  the  note  and  at- 
tempting to  collect  it,  and  especially  before  he  swore  to  the  an- 
swer, and  then  to  have  stated  his  belief.  His  neglect  to  do  so 
raises  an  inference  against  him.  In  fact,  he  admits  the  allegation, 
but  claims  not  to  be  responsible  for  the  unauthorized  acts  of  the 
officer.  Upon  this  point  of  morals  the  defendant  is  clearly  in 
error.  It  is  as  much  against  conscience  to  attempt  to  avail  oneself 
of  the  iniquity  of  an  agent,  after  it  is  known,  as  if  there  had  been 
preconcert.  There  is  but  a  slight  shade  of  distinction  between  the 
guilt  of  one  who  receives  goods,  knowing  them  to  be  stolen,  and 
of  him  who  procures  the  theft  to  be  committed.  We  think  the 
answer  is  unfair  and  evasive.  It  is  error  to  dissolve  the  injunc- 
tion, and  it  ought  to  have  been  continued  to  the  hearing,  because 
the  equity  of  the  bill  is  not  met. 

Perhaps,  when  the  case  is  heard,  the  proof  may  show  that  the 
defendant  had  good  cause  of  action.  If  so,  it  may  be  proper  to 
adopt  the  course  taken  in  Heath  v.  Cobb,  and,  instead  of  making 


REALITY    OF    CONSENT.       DURESS.  357 

the  injunction  perpetual,  the  court  may  be  induced  to  hold  up  the 
judgment,  as  a  security  for  any  damages  the  defendant  may  be 
able  to  recover  in  an  action  at  law ;  and,  to  this  end,  to  remove  the 
impediments  to  such  action  growing  out  of  the  compromise  and  the 
statute  of  limitation.  But  we  presume  it  will  require  a  strong  case 
to  justify  such  a  course,  when  the  damage  is  trifling,  and  "the  play 
is  not  worth  the  candle."  It  is  clear  that  the  defendant  can  not 
conscientiously  touch  one  cent  of  the  plaintiff's  money,  until  he 
has  established  his  damages  by  an  action  at  law.  And  we  can  not 
help  feeling  that  the  conduct  of  the  plaintiff's  wife,  in  her  lauda- 
ble wish  "to  keep  him  out  of  litigation,"  would  have  been  more 
praiseworthy,  if  she  had  let  the  old  man  go  home,  without  giving 
his  note. 

This  opinion  will  be  certified  to  the  court  below,  and  the  de- 
fendant will  pay  the  costs  of  this  court. 

A  person  in  jail,  charged  with  larceny,  confessed  judgment  for  the 
value  of  the  property,  for  the  purpose  of  conciliating  the  prosecutor  and 
the  court;  such  judgment  can  not  be  sustained  on  account  of  duress, 
but  it  may  be  security  for  the  damages  to  be  recovered  in  a  civil  action 
for  the  trespass.  Heath  v.  Cobb,  17—187.  Unless  it  appear  that  process 
has  been  used  to  force  the  person  into  a  contract,  it  will  be  presumed  to 
be  regular  and  valid.  Gunter  v.  Thomas,  36—199;  but  in  an  action  based 
on  abuse  of  process,  it  makes  no  difference  whether  there  was  probable 
cause  or  not,  since  the  action  lies  even  if  the  process  is  issued  for  a  just 
cause,  is  valid  in  form,  and  was  proper  in  its  inception.  Jackson  v.  Tele- 
graph Co.,  139— p.  356.  If  one,  knowing  that  he  has  no  claim  against 
another,  sues  out  legal  process  against  him  and  seizes  his  person  or 
property,  and  the  defendant,  acting  upon  the  false  representation  of  the 
plaintiff,  and  not  being  able  at  the  time  by  reasonable  diligence  to  know 
or  prove  that  such  representations  are  false,  pays  the  demand,  he  may 
recover  it  in  a  subsequent  action.  Adams  v.  Reeves,  68— p.  138.  Under 
the  former  rule,  the  imprisonment  must  have  been  illegal;  but  now  it  is 
generally  held  to  be  duress,  (1)  where  there  is  an  arrest  for  an  improper 
purpose,  without  just  cause;  (2)  where  there  is  arrest  without  lawful 
authority,  whether  for  just  cause  or  not;  (3)  where  there  is  an  arrest  for 
a  just  cause,  but  for  an  unlawful  purpose,  even  though  under  proper 
process.  10  Am.  &  Eng.  Encvc,  321,  322,  and  notes;  Clark  Cont.,  242; 
Fairbanks  v.  Snow,  145  Mass.,  153,  1  A.  S.  R.,  446;  Hatter  v.  Greenlee, 
1  Porter  (Ala.),  222,  26  A.  D.,  370;  Fillman  v.  Ryon,  168  Pa.  St.,  484, 
32  Atl.,  89;  9  Cyc,  443;  14  Cyc,  1123. 

2.  By   threats. 

(143)  EDWARDS  v.  BOWDEN, 

107  N.  C,  58,  12  S.  E.,  58—1890. 

Civil  action  to  foreclose  a  mortgage  on  the  land  of  the  feme 
defendant.  The  defendant  in  her  answer  alleged  that  the  mort- 
gage was  obtained  by  fraud  and  collusion  of  the  plaintiffs,  and 
threats  and  compulsion  of  her  husband. 

The  court  charged  the  jury  that  "if  they  believed  that  at  the 
time  the  feme  defendant  executed  the  mortgage  sued  on,  she  was 


358  FORMATION    OF    CONTRACT. 

sick  in  bed,  that  her  husband  had  threatened  to  leave  her  if  she 
did  not  execute  the  mortgage,  that  she  had  two  children  and  was 
dependent  upon  her  husband  for  support,  and  that  she  believed  he 
would  execute  his  threat;  that  the  plaintiff  told  her  that  if  she 
did  not  execute  the  mortgage  he  would  sell  the  chattels  of  her  hus- 
band, on  which  he  had  a  mortgage,  and  prosecute  him  and  put  him 
in  jail  for  failing  to  convey  certain  real  estate,  which  he  agreed 
to  convey  to  them  to  get  advances ;  and  that  the  feme  defendant 
being  induced  by  the  threats  of  her  husband  and  the  plaintiff,  and 
on  account  of  her  sickness,  executed  the  mortgage,  this  would  be 
duress,  and  they  would  find  for  the  defendant." 

There  was  a  verdict  and  judgment  for  the  defendant,  and  plain- 
tiff appealed. 

ShfphFrd,  J.  By  duress,  in  its  more  extended  sense,  is  meant 
"that  degree  of  severity,  either  threatened  or  impending,  or  actu- 
ally inflicted,  which  is  sufficient  to  overcome  the  mind  and  will  of 
a  person  of  ordinary  firmness."     2  Greenleaf  Ev.,  sec.  301. 

Bacon,  in  his  Abridgment,  vol.  2,  p.  156,  referring  to  Lord  Coke, 
says,  "that  for  menaces,  in  four  instances,  a  man  may  avoid  his 
own  act.  1.  For  fear  of  loss  of  life;  2.  Of  loss  of  member;  3.  Of 
mayhem  ;  4.  Of  imprisonment."  The  threat  of  imprisonment  "may 
be  to  the  person  of  the  party  or  of  the  party's  husband,  wife, 
parent  or  child,  through  constraint  of  which  he — in  form — con- 
sents to  what  he  otherwise  would  not."  Bishop  Cont.,  sec.  715. 
Though  several  modern  authorities  have  been  very  liberal  in  the 
application  of  this  doctrine,  we  think  that  a  wise  public  policy  re- 
quires that  contracts  solemnly  entered  into  by  deed,  should  not  be 
avoided,  except  upon  the  most  imperative  demands  of  necessity 
and  justice,  and  we  can  not,  therefore,  sanction  the  principle  of 
some  of  the  decisions,  that  a  mere  threat  of  unlawful  imprison- 
ment, standing  alone,  will  be  sufficient  to  avoid  a  deed.  There 
should  be  some  process  issued  or  some  steps  taken  towards  the  ex- 
ecution of  the  threat,  or,  at  least,  some  circumstances  attending  it 
which  would  produce  a  reasonable  apprehension  of  imminent  arrest 
or  imprisonment.  In  the  case  of  Ware  v.  Nesbit,  94  N.  C,  664, 
the  husband  had  been  actually  arrested  and  bailed,  and  the  wife 
was  present  and  "greatly  excited."  Afterwards  the  sureties  of  the 
husband  threatened  to  surrender  him  and  "send  him  back  to  jail" 
unless  the  debt  was  compromised.  The  wife  knew  of  this,  and 
under  the  influence  of  this  threat  executed  the  deed. 

No  instructions  were  asked,  says  the  court,  to  the  effect  that 
the  evidence  was  insufficient  to  sustain  the  alleged  duress,  and  the 
ruling  was  based  only  upon  the  exceptions  to  the  instructions  given 
to  the  jury.  The  decision  leaves  us  in  some  doubt  whether  the 
court  would  have  held  that  the  evidence  was  sufficient  had  the  point 


REALITY    OF    CONSENT.       DURESS.  359 

been  properly  presented.  Assuming,  however,  that  the  testimony  was 
sufficient,  the  case  is  distinguishable  from  the  present,  in  that  the 
husband  had  actually  been  arrested,  and  was,  it  seems,  in  immi- 
nent danger  of  a  new  imprisonment  by  reason  of  his  being  sur- 
rendered by  his  bail.  Thus  much  we  have  been  careful  to  say,  in 
order  to  exclude  the  idea  that  we  think  that  the  simple  threat  of 
the  plaintiff  in  this  case,  was,  in  itself,  sufficient  to  constitute  tech- 
nical duress.  Neither  would  the  threat  to  foreclose  the  mortgage 
upon  the  husband's  chattel  property  have  that  effect ;  nor  do  we 
think  that  the  threat  of  abandonment  made  by  a  husband  would, 
under  ordinary  circumstances,  amount  to  such  duress. 

We  are  of  opinion,  however,  that  while  neither  of  these  grounds 
would,  in  itself,  be  sufficient  to  warrant  a  finding  of  technical 
duress,  yet  when  they  are  taken  together,  and  in  connection  with 
the  important  facts  that  the  wife  was  prostrated  by  sickness,  and 
that  her  privy  examination  was  taken  at  once  and  while  she  was 
in  that  condition,  there  was  sufficient  testimony  to  be  submitted  to 
the  jury  in  support  of  the  allegation  of  fraud  and  compulsion 
which  is  set  up  in  the  answer.  Especially  is  this  so,  when  the 
court  made  the  establishment  of  all  of  these  circumstances  neces- 
sary to  an  affirmative  finding,  by  charging  the  jury  that  "if  she 
(the  defendant)  was  induced  [to  execute  the  deed]  by  the  said 
threats  of  her  husband  and  the  said  plaintiff,  and  on  account  of 
her  sickness,"  they  should  find  in  her  favor. 

The  argument  here  proceeded  almost  entirely  upon  the  ground 
of  legal  duress,  but  we  think  that,  taking  all  of  the  alleged  facts 
to  be  true,  a  case  would  be  made  out  which  would  call  for  the 
equitable  intervention  of  the  court.  "In  equity  there  is  no  rule  de- 
fining inflexibly  what  kind  or  amount  of  compulsion  shall  be  suffi- 
cient ground  for  avoiding  a  transaction.  .  .  .  The  question  to 
be  decided  in  each  case  is  whether  the  party  was  a  free  and  vol- 
untary agent.  Any  influence  brought  to  bear  upon  a  person  enter- 
ing into  an  agreement,  or  consenting  to  a  disposal  of  property 
which,  having  regard  to  the  age,  capacity  of  the  party,  the  nature 
of  the  transaction,  and  all  the  circumstances  of  the  case,  appears 
to  have  been  such  as  to  preclude  the  exercise  of  free  and  delib- 
erate judgment,  is  considered  by  courts  of  equity  to  be  undue  in- 
fluence, and  is  a  ground  for  setting  aside  the  act  procured  by  its 
employment."  Pollock  Cont.,  524.  "Where  there  is  no  coercion 
amounting  to  duress,  but  a  transaction  is  the  result  of  a  moral, 
social  or  domestic  force  exerted  upon  a  party  controlling  the  free 
action  of  his  will  and  preventing  any  true  consent,  equity  may  re- 
lieve against  the  transaction  on  the  ground  of  undue  influence, 
even  though  there  may  be  no  invalidity  at  law.  In  the  vast  ma- 
jority of  instances,  undue  influence  naturally  has  a  field  to  work 


360  FORMATION    OF    CONTRACT. 

upon  in  the  condition  or  circumstances  of  the  person  influenced, 
which  renders  him  peculiarly  susceptible  and  yielding;  his  de- 
pendent or  fiduciary  relation  towards  the  one  exerting  the  influ- 
ence, his  mental  or  physical  weakness,  his  pecuniary  necessities, 
his  ignorance,  lack  of  advice,  and  the  like."  Pom.  Eq.,  Jur.,  951. 
It  is  true  that  where  duress  alone  is  relied  upon,  equity  follows 
the  law  (2  Pom.  Eq.,  950),  but  there  is  something  more  in  this 
case.  We  have  a  woman  on  a  bed  of  sickness;  we  have  the  confi- 
dential relation  of  husband  and  wife,  and  the  presumed  influence 
of  the  husband  over  her.  Pom.  Eq.  Jur.,  sec.  963 ;  Bisp.  Eq.,  sec. 
237.  We  have  also  (Huguenin  v.  Basely,  2  White  &  Tudor's  L.  C, 
1156,  notes)  the  husband  threatening  to  abandon  her  and  their 
two  children,  who  were  dependent  upon  him  for  support,  and  this 
in  connection  with  the  threats  of  unlawful  prosecution  and  im- 
prisonment of  the  husband.  These  combined  circumstances  bring 
the  case  within  the  principle  stated  by  Pollock  and  Pomeroy,  supra, 
and  also  by  2  Greenleaf  on  Ev.,  sec.  301,  supra,  who  says  that 
facts  which  in  themselves  do  not  amount  to  technical  duress  are 
"admissible  in  evidence  to  make  out  a  defense  of  fraud  and  extor- 
tion in  obtaining  the  instrument."  It  is  upon  this  ground  that  we 
rest  our  decision.  Affirmed. 

"Duress  per  minus  exists  when  a  person  is  induced  to  perform  an  act 
to  avoid  a  threatened  and  impending  calamity."  10  Am.  &  Eng.  Encyc, 
324.  The  quotation  in  the  beginning  of  the  opinion  above  states  the  com- 
mon law  rule  of  "a  man  of  ordinary  firmness,"  but  the  decision  seems  to 
adopt  the  more  modern  rule  of  the  effect  upon  the  mind  in  each  particular 
case.  See  10  Am.  &  Eng.  Encvc,  324-328,  and  notes;  Clark  Cont.,  241; 
Galusha  v.  Sherman,  105  Wis.,  263,  81  N.  W.,  495,  47  L.  R.  A.,  417; 
Sulzner  v.  Cappeau-Leml,ey  &  Miller  Co.,  234  Pa.,  162,  83  Atl.,  103,  39 
L.  R.  A.   (N.  S.),  421. 

Where  the  plaintiff  received  Confederate  money  on  a  debt  because  the 
Judge  threatened  to  put  him  in  jail  and  send  him  to  Richmond,  if  he 
refused,  it  was  duress.  Harshaw  v.  Dobson,  64 — 384 ;  67 — 203.  The 
declarations  or  threats  of  the  obligor  in  this  respect  would  not  be  suffi- 
cient. Wells  v.  Shuler,  70—55;  Simmons  v.  Mann,  92—12;  nor  would 
hostile  public  opinion,  or  unpopularity  be  sufficient.  Sudderth  v.  Mc- 
Combs,  79—398.  While  duress  was  originally  limited  to  the  person,  it 
has  been  extended  to  apply  to  the  relation  of  husband  and  wife,  parent 
and  child,  and  to  property.  10  Am.  &  Eng.  Encyc,  328  et  seq.;  Sykes  v. 
Thompson,  160—384;  Shattuck  v.  Watson,  53  Ark.,  147.  13  S.  W.,  516,  7 
L.  R.  A.,  5.51;  Cribbs  v.  Sowle,  87  Mich.,  166,  24  A.  S.  R„  166;  Mayor  of 
Bait.  v.  Lefferman,  4  Gill,  425,  45  A.  D.,  145;  Eadie  v.  Slimmon,  26  N.  Y, 
9,  82  A.  D.,  395;  Adams  v.  Irving  Nat.  Bk.,  116  N.  Y.,  606,  15  A.  S.  R., 
447;  Williams  v.  Bayley,  L.  R.,  1  H.  L.,  200,  6  E.  R.  C,  455. 

Effect  of  duress  is  to  render  the  contract  voidable,  as  in  the  cases  given 
above;  but  where  the  force  is  such  as  to  deprive  the  party  of  all  volition 
for  the  time,  it  may  be  void.  Pollock  Cont.,  553.  A  deed  obtained  by 
duress  is  voidable,  but  the  injured  party  must  proceed  within  a  reasonable 
time  after  the  force  has  ceased  to  operate.  Reed  v.  Exum,  84 — 430.  In  the 
case  of  Edwards  v.  Bowden,  supra,  and  in  McRae  v.  Malloy,  93—154,  where 
"surprise"  is  used  in  the  sense  of  duress,  the  argument  of  the  court  shows 
the  tendency  to  depart  from  the  old  rule  of  actual  force,  and  to  apply 
the  rule  of  moral  duress  or  undue  influence.     See  1    Page  Cont.,   sec.   244 


REAUTY    OF    CONSENT.       UNDUE    INFLUENCE.  361 

et  seq.  In  undue  influence  by  duress  there  is  always  the  idea  of  violence 
or  force  or  advantage  taken  of  the  party's  unfortunate  condition,  while  in 
undue  influence  as  explained  in  the  next  section,  there  is  confidence  re- 
posed and  abused. 

Sec.  5.  Undue  influence. 

LEE  v.  PEARCE,  Ante,  (141). 

BEAN  v.  R.  R.,  Ante,  (117). 

"To  constitute  undue  influence  it  is  not  necessarily  required  that  there 
should  exist  moral  turpitude,  or  even  an  improper  motive;  but  if  a  person, 
from  the  best  of  motives,  having  obtained  a  dominant  influence  over  the 
mind  of  a  grantor,  thereby  induces  him  to  execute  a  deed  or  other  instru- 
ment materially  affecting  his  rights,  which  he  would  not  have  made  other- 
wise, exercising  the  influence  obtained  to  such  an  extent  that  the  mind  and 
will  of  the  grantor  is  effaced  or  supplanted  in  the  transaction  so  that  the 
instrument,  while  professing  to  be  the  act  and  deed  of  the  grantor,  in 
fact  and  truth  only  expresses  the  mind  and  will  of  the  third  person,  the 
actor  who  procured  the  result,  such  an  instrument  so  obtained  is  not  im- 
properly  termed   fraudulent."     Myatt   v.   Myatt,   149—137,    141. 

Where  the  well-known  confidential  relations  exist,  the  law  presumes 
fraud,  from  the  opportunity  to  use  undue  influence;  but  where  undue 
influence  is  alleged  apart  from  these  relations,  it  must  be  proved.  Deaton 
v.  Munroe,  57—39;  Futrill  v.  Futrill,  58—61;  59—337;  Burroughs  v. 
Jenkins,  62—33;  Riley  v.  Hall,  119—406.  Fair  argument  and  persuasion 
is  not  undue  influence.  Gilreath  v.  Gilreath,  57—142;  Taylor  v.  Taylor, 
21—46.  But  undue  influence  may  be  shown  by  all  the  circumstances,  as 
the  extent  of  capacity,  the  nature  of  influence,  the  character  of  the  par- 
ties, and  their  relation,  the  benefit  derived,  inadequacy  of  price,  etc.  Amis 
v  Satterfield,  40— p.  182.  Mental  weakness  arising  from  old  age  is  not 
aione  sufficient,  Suttles  v.  Hay,  41—124;  Pains  v.  Roberts,  82—451;  Tatum 
v  White,  95—453;  neither  is  inadequacy  of  price,  Carman  v.  Page,  o9— 
37;  Berry  v.  Hall,  105—154;  Potter  v.  Everett,  42—152;  but  when  advan- 
tage is  taken  of  the  weak  mental  condition  to  obtain  property  at  an 
inadequate  price,  the  sale  will  be  set  aside.  Green  v.  Brown,  60—595.  So 
where  the  incapacity  results  from  drunkenness.  Freeman  v.  Dwiggins, 
55—162;  Calloway  v.  Witherspoon,  40—128;  or  where  confidence  has  been 
reposed  and  abused.  McCraw  v.  Davis,  37—618;  Boyd  v.  King,  57—152; 
Mason  v.  Pelletier,  82 — 40;  Elliott  v.  Logan,  62—163;  Day  v.  Day,  84— 
408;  Boutten  v.  R.  R,  128— p.  341;  Beeson  v.  Smith,  149—142;  Jackson  v. 
Rowell,  87  Ala.,  685,  6  So.,  95,  4  L.  R.  A.,  637;  Boardman  v.  Lorentzen, 
155  Wis.,  566,  145  N.  W.,  750,  52  L.  R.  A.   (N.  S.),  476. 

Buving  an  expectancy  is  not  such  a  contract  as  to  be  avoided  unless 
there"  has  been  some  imposition,  and  when  set  aside,  the  heir  will  have 
to  account  for  what  he  got  in  the  trade.  Masten  v.  Marlow,  65—695; 
Boles  v.  Caudle,  126—352;  133—528;  McDonald  v.  Hackett,  112—1556; 
Wright  v.  Brown,  116— p.  28;  Tavlor  v.  Smith,  116— p.  134;  Kornegay  v. 
Miller,   137— p.  669;   Bispham  Equity,  sec.  220. 

For  discussion  of  undue  influence  in  general,  see  1  Page  Cont.,  sec.  201 
et  seq.;  Bispham  Eq.,  sec.  231  et  seq.;  Clark  Cont,  246;  29  Am.  &  Eng. 
Encyc,  102  et  seq. 


362  FORMATION    OF    CONTRACT. 


CHAPTER  VIII. 

Illegal  Contracts. 

Sec.  1.     Agreements  in  violation  of  common  law. 

(144)   IVES  v.  JONES, 

25  N.  C,  538,  40  A.  D.,  421—1843. 

This  was  an  action  of  assumpsit.  The  plaintiff  was  overseer  of 
defendant  and  had  contracted  to  purchase  a  tract  of  land  from  the 
defendant ;  the  defendant  told  plaintiff  that  the  fence  did  not  run 
quite  out  to  the  line,  and  directed  him  to  move  the  fence  out  on  the 
line;  that  if  one  Ballance,  who  owned  the  adjoining  land,  did  not 
agree  to  it,  and  should  bring  suit  against  him,  he  would  pay  all 
damages  and  save  the  plaintiff  harmless ;  the  plaintiff  moved  the 
fence,  Ballance  sued  him  and  the  defendant  and  another  for  tres- 
pass in  moving  the  fence,  and  the  present  plaintiff  had  to  pay  the 
costs  and  damages,  and  upon  defendant's  refusing  to  indemnify 
him,  brought  this  action.  The  court  held  that  the  verdict  in  the 
action  of  trespass  did  not  discharge  the  defendant,  and  that  al- 
though a  promise  to  induce  another  to  commit  a  wilful  and  wicked 
trespass  would  not  be  binding,  yet  the  promise  in  this  case  was 
binding,  because  the  plaintiff,  being  the  overseer  of  the  defendant 
and  acting  under  his  direction,  did  not  commit  a  wilful  and  naked 
trespass,  but  was  only  asserting  the  right  of  the  defendant.  There 
was  a  verdict  and  judgment  for  the  plaintiff,  and  the  defendant 
appealed. 

Ruffin,  C.  J.  We  think  His  Honor  put  the  case  upon  the  true 
ground,  and  that  the  judgment  must  be  affirmed.  The  correct  dis- 
tinction is  stated  in  the  case  of  Merriweather  v.  Nixon,  8  T.  R., 
186,  which  has  been  cited  for  the  defendant.  The  particulars  of 
that  case  are  not  given  in  the  report,  but  the  injury  must  have 
been  forcible  and  wanton.  For  Lord  Kenyon,  after  recognizing 
the  general  rule,  that  there  could  be  no  contribution  between  joint 
wrongdoers,  nor,  of  course,  redress  upon  a  contract  to  do  an  un- 
lawful thing,  distinguishes  that  case  from  one,  in  which  there  could 
be  redress,  by  saying  "that  decision  would  not  affect  cases  of  in- 
demnity, where  one  man  employed  another  to  do  acts,  not  unlaw- 
ful in  themselves,  for  the  purpose  of  asserting  a  right."  If  it  were 
not  so,  no  one  could  ever  expect  assistance  in  enforcing  his  rights 
by  means,  even  the  most  peaceable,  which  could  subject  the  parties 


ILLEGAL,    CONTRACTS.  363 

to  an  action  sounding  in  tort,  and  an  end  would  be  put  to  indemni- 
ties. For,  if  the  right  be  with  the  party  indemnifying,  there  is  no 
need  of  the  indemnity,  and  if  it  turn  out  to  be  in  another,  who 
recovers  for  the  injury,  the  rule  would  make  the  indemnity  void. 
But  when  the  object  is  apparently  in  furtherance  of  justice  and  in 
the  exercise  of  a  right,  and  the  means  are  not  in  themselves  crim- 
inal, and  not  known  by  the  person  employed  to  be  wrongful  to  a 
third  person,  there  can  be  no  objection  to  giving  effect  to  a  con- 
tract to  save  harmless  one,  who,  from  good  motives,  did  an  act 
for  his  employer,  which,  contrary  to  his  expectation,  happened  to 
be  an  injury  to  a  third  person.  That  is  not  like  the  perpetrator  of 
an  act,  manifestly  unlawful  and  criminal,  seeking  redress  against 
the  procurer.  Indemnity  for  acts  apparently  right,  or  not  ap- 
parently wrong,  have  always  been  upheld. 

As  long  ago  as  the  case  of  Arundel  v.  Gardner,  Cro.  Jac,  652, 
it  was  held  that  an  action  would  lie  for  the  sheriff  on  a  promise  of 
indemnity,  made  by  an  execution  creditor  for  levying  on  goods, 
as  the  property  of  the  defendant  in  the  execution,  which  were  in 
the  possession  of  another  person,  who  was  in  fact  the  owner.  The 
same  doctrine  has  been  recently  held  by  the  House  of  Lords,  in 
Humphreys  v.  Pratt,  2  Dow  &  Clark,  288.  If,  in  truth,  such  a 
seizure  by  a  sheriff  were  a  wanton  act  in  him,  well  knowing  that 
the  property  was  in  the  possessor  and  not  in  the  debtor,  and  made 
for  the  purpose  of  harrassing  the  former,  he,  as  purely  a  wrong- 
doer, could  receive  no  countenance  from  the  law.  But  when  it  is 
made  upon  the  assertion  of  the  creditor,  that  the  goods  are  the 
property  of  his  debtor  and  liable  to  be  seized,  the  conduct  of  the 
sheriff  is  fair,  and  being  for  the  benefit  of  the  creditor,  it  is  man- 
ifestly just  that  the  latter  should  make  good  his  promise,  that  the 
officer  should  not  be  a  loser  by  such  an  act.  There  have  been 
other  cases  which  have  further  extended  the  principle.  In  Adams 
v.  Jarvis,  4  Bing.,  66,  the  plaintiff,  an  auctioneer,  sold  goods  under 
the  order  of  the  defendant,  who  represented  himself  to  be  entitled 
to  them,  and  received  the  proceeds  from  the  auctioneer,  from 
whom,  however,  the  true  owner  afterwards  recovered  the  value, 
and  it  was  held  that  the  action  would  lie  to  recover  back  the  dam- 
ages and  costs.  Chief  Justice  Best  thus  expressed  himself :  "Every 
person,  who  employs  another  to  do  an  act,  which  the  employer 
appears  to  have  a  right  to  authorize,  undertakes  to  indemnify  him 
for  all  such  acts  as  would  be  lawful,  if  the  employer  had  the  au- 
thority he  pretends  to  have,  and  a  contrary  doctrine  would  create 
great  alarm."  He  added,  "that  from  the  concluding  part  of  Lord 
Kenyon's  judgment,  in  Merriweather  v.  Nixon,  and  from  reason, 
justice  and  sound  policy,  the  rule,  that  wrongdoers  can  not  have 
redress  against  each  other,  is  confined  to  cases,  where  the  person 


364  FORMATION    OF    CONTRACT. 

seeking  redress  must  be  presumed  to  have  known  that  he  was  do- 
ing an  unlawful  act."  In  Betts  &  Drew  v.  Gibbins,  2  Adol.  & 
EL,  57,  the  defendant  sold  ten  cases  of  goods  to  N  &  W,  and  sent 
them  to  the  plaintiffs,  with  notice  that  they  were  for  N  &  W,  and 
with  directions  to  deliver  them.  After  delivering  two  casks,  the 
plaintiffs  were  ordered  by  the  defendant,  and  indemnified  not  to 
deliver  any  more  to  N  &  W,  but  to  deliver  the  remainder  to  an- 
other person — which  they  did.  The  plaintiffs  were  than  sued  in 
trover  by  the  assignee  of  N  &  W,  who  had  become  bankrupts,  and 
for  the  damages  and  costs  in  that  action  the  plaintiffs  then  sued 
the  defendant  and  had  judgment.  Lord  Denman  said,  supposing 
there  was  a  bona  fide  doubt,  the  plaintiff  has  a  right  to  act  upon 
the  instructions  of  the  defendant,  and  might  come  on  him  for  the 
consequences  of  so  doing.  He  further  said  that  the  case  of  Mer- 
riweather  v.  Nixon  had  been  strained  beyond  what  the  decision 
would  bear,  that  the  general  rule  is  that  between  wrongdoers  there 
is  neither  indemnity  nor  contribution,  but  there  is  an  exception, 
where  the  act  is  not  clearly  illegal  in  itself.  And  one  of  the 
other  judges  remarked  that  the  case  bore  no  analogy  to  those,  in 
which  an  indemnity  is  claimed  for  acts  obviously  unlawful,  like 
breaches  of  the  peace,  or  to  cases  in  which  the  conduct  of  the  par- 
ties is  in  contravention  of  public  policy.  In  the  case  at  bar,  the 
defendant  claimed  to  be  owner  of  land  up  to  a  particular  line,  and 
ordered  the  plaintiff,  who  was  in  his  employment,  to  set  his  fence 
to  the  line,  and  the  plaintiff,  simply  for  obedience  to  those  orders 
and  without  having  committed  any  public  offense,  and  being  inno- 
cent of  any  intentional  wrong  to  any  other  person,  has  been  com- 
pelled to  pay  damages  and  costs  for  the  trespass,  to  a  person  who 
turned  out  to  be  the  owner  of  the  land,  and  now  sues  on  the  de- 
fendant's express  promise  of  indemnity.  Surely  no  claim  could 
have  a  broader  foundation  of  justice,  or,  as  we  think,  law,  to  sup- 
port it.  The  verdict  in  the  former  action,  acquitting  the  defend- 
ant, avails  nothing  here.  It  only  shows  that  the  plaintiff  in  that 
action  could  not  prove  the  present  defendant's  orders,  or  indem- 
nity to  the  present  plaintiff.  But,  as  between  the  present  parties, 
those  facts  were  not  in  issue  before,  and  therefore  neither  is  con- 
cluded. 

Per  Curiam.  Judgment  affirmed. 

(145)   BLYTHE  v.  LOVINGGOOD, 

24  N.  C,  20,  37  A.  D.,  402—1841. 

Action  on  promissory  note,  not  under  seal.     At  a  public  sale  of 

land  belonging  to  the  State,  one  of  the  conditions  of  the  sale  was 

that  if  the  highest  bidder  did  not  give  his  bond  by  a  certain  time, 

the  next  highest  bidder  might  come   forward  and  take  the  land. 


ILLEGAL    CONTRACTS.  365 

The  plaintiff  was  the  highest  bidder  and  the  defendant  next;  they 
agreed  that  the  plaintiff  should  fail  to  comply  with  his  bid  and 
allow  the  defendant  to  take  the  land  at  the  lower  bid,  and  that  the 
defendant  should  pay  the  plaintiff  $100.  A  note  was  given  for 
that  amount,  and  in  an  action  on  the  note  the  defendant  set  up  the 
illegal  consideration.  The  court  held  the  consideration  to  be  suffi- 
cient, and  from  a  judgment  against  him  the  defendant  appealed. 

Daniel,  J.     If  the  plaintiff  intended  to  comply  with  the  terms 
of  the  sale,  but  failed  in  consideration  of  the  defendant's  executing 
to  him  the  note,  then  the  conspiracy  had  the  effect  of  depriving 
the  State  of  so  much  of  the  purchase-money  as  made  up  the  dif- 
ference between  the  two  bids;  and  such  a  transaction,  we  think, 
was  fraudulent  towards  the  State.  The  plaintiff's  counsel  contends, 
that,  if  the  parties  intended  to  defraud  the  State,  it  could  be  taken 
advantage  of  by  the  State  only,  and  not  by  the  defendant  who  has 
reaped  the  benefit,  and  was  a  particeps  criminis  in  the  transaction. 
We  are  of  a  different  opinion.  The  law  prohibits  everything  which 
is  contra  bonos  mores,  and,  therefore,  no  contract,  which  originates 
in  an  act  contrary  to  the  true  principles  of  morality,  can  be  made 
the  subject  of  complaint  in  the  courts  of  justice.     It  has  been  re- 
peatedly decided  in  England,  that  the  vendor  of  goods  could  not 
recover  the  price  of  the  vendee,  when  he  had  aided  the  vendee, 
either  in  packing  or  otherwise,  to  defraud  the  revenue  laws  of  that 
country.     Clugas  v.  Penabena,  4  T.  R.,  466;  Waywell  v.  Reed,  5 
T.  R.,  599.     So  a  contract,  which  is  a  fraud  on  a  third  person, 
may,  on  that  account,  be  void  as  to  the  parties  to  it,  as  where  A 
succeeded  B  in  a  house,  and,  not  being  able  to  pay  for  the  furni- 
ture, proposed  to  D,  his  friend,  to  advance  money  for  him,  who 
accordingly  treated  with  B,  and  agreed  to  purchase  the  furniture 
for  A  at  £70,   which   sum   he  paid   B ;  but  there  was   a  private 
agreement  between  A  and  B,  that  A  should  pay  a  further  sum  of 
£30,  over  and  above  the  £70;  and,  in  pursuance  thereof,  A  gave 
B  two  promissory  notes  of  £15  each,  for  that  sum.     Held,  that  he 
could  not  recover  on  the  notes,  as  the  private  agreement  was  a 
fraud  upon  D,  who  had  advanced  the  £70  in  confidence  that  it  was 
the  whole  consideration.     Jackson  v.  Ducharie,  3  T.  R.,  551.     So 
where  a  surety  gave  a  guaranty  to  A   for  a  certain  amount  of 
goods  to  be  sold  to  B,  and  the  latter  agreed  to  pay  10s.  per  ton 
beyond  the  market  price,  in  liquidation  of  an  old  debt  due  to  A, 
without  communicating  the  bargain  to  the  surety.     Held,  that  it 
was  a  fraud  upon  the  latter,  and  the  guaranty  was  void.     Pidcock 
v.  Bishop,  10  Eng.  C.  L.,  197.     Lord  Mansfield  said  (in  Holman 
v.  Johnson,  Cowp.,  343),  "The  objection  that  a  contract  is  immoral 
or  illegal,  as  between  the  plaintiff  and  defendant,  sounded  at  all 
times  very  ill  in  the  mouth  of  the  defendant.     It  is  not  for  his 


366  FORMATION    OF    CONTRACT. 

sake,  however,  that  the  objection  is  even  allowed;  but  it  is  founded 
in  general  principles  of  policy,  which  the  defendant  has  the  advan- 
tage of,  contrary  to  the  real  justice  as  between  him  and  the  plain- 
tiff, by  accident,  if  I  may  say  so.  The  principle  of  public  policy 
is  this :  ex  dolo  malo  non  oritur  actio.  No  court  will  lend  its  aid 
to  a  man  who  founds  his  cause  of  action  upon  an  immoral  or  an 
illegal  act.  If,  from  the  plaintiff's  own  stating  or  otherwise,  the 
action  appears  to  arise  ex  turpi  causa,  or  the  transgression  of  a 
positive  law  of  the  country,  then  the  court  says  he  has  no  right 
to  be  assisted.  It  is  upon  this  ground  the  court  goes,  not  for  the 
sake  of  the  defendant,  but  because  they  will  not  lend  their  aid  to 
such  a  plaintiff."  We  are  of  the  opinion  that  the  agreement  in 
this  case  was  in  pursuance  of  a  fraudulent  design  to  deprive  the 
State  of  a  fair  price  for  its  land,  and  that  the  plaintiff  ought  not 
to  recover.     There  must  be  a  New  trial. 

The  maxims  which  control  in  such  cases  are,  ex  turpi  causa  non  oritur 
actio,  and  in  pari  delicto  potior  est  conditio   defcndcntis. 

Indemnity  contracts. — Griffin  v.  Hasty,  94 — 438;  Turrentine  v.  Faucett, 
33—652;  Denson  v.  Sledge,  13—136;  Roper  v.  Laurinburg,  90—427;  4  L. 
R.  A.,  682;  20  L.  R.  A.   (N.  S.),  58. 

Fraud  on  creditors. — Executory  contracts  made  to  defraud  creditors 
will  not  lie  enforced,  nor  will  executed  contracts  be  set  aside  as  between 
the  parties.  Powell  v.  Inman,  52—28,  53—436;  York  v.  Merritt,  77—213, 
80—285;    Pinkston   v.   Brown,   56—494. 

In  compositions  with  creditors  the  utmost  good  faith  is  required,  and 
any  agreement  with  one  creditor,  not  known  to  the  others,  by  which  he 
is  to  receive  a  preference,  is  void.  Guano  Co.  v.  Emry,  113 — 85;  6  Am. 
&  Eng.  Encyc,  392;  Clark  Cont.,  256;  Page  Cont.,  sec.  404;  27  L.  R.  A., 
33;  9  Cyc,  468. 

Fraud  in  auctions. — By-bidding  may  be  a  fraud  upon  the  purchaser ; 
agreements  not  to  bid  may  be  a  fraud  upon  the  seller ;  and  contracts  made 
for  such  purpose  would  be  void.  Ingram  v.  Ingram,  48 — 188 ;  King  v. 
Winants,  71—469,  73—563;  Smith  v.  Greenlee,  13—126;  Whitaker  v.  Bond, 
63—290;  Davis  v.  Keen,  142—496;  Henderson-Snyder  Co.  v.  Polk,  149—104; 
Owens  v.  Wright,  161 — 127.  Where  the  agreement  is  not  to  stifle  com- 
petition, but  for  an  honest  purpose,  it  is  valid.  Goode  v.  Hawkins,  17 — 
393:  Graham  v.  Reid,  13—364;  Bailev  v.  Morgan,  44—352;  Satterfield  v. 
Kindlev,  144-455:  Ruis  v.  Branch,  138  Ga.,  150,  74  S.  E,  1081,  42  L.  R. 
A.  (N.  S.),  1198;  Clark  Cont.,  258;  Page  Cont.,  sec.  405;  15  Am.  &  Eng. 
Encyc,  950;  9  Cyc,  470. 

Sec.  2.     Agreements  in  violation  of  statute. 

1.  In  general. 

(146)   SHARP  v.  FARMER, 

20  N.   C,  255—1838. 

Action  of  assumpsit,  commenced  by  Sharp  and  wife,  and  upon 
her  death,  continued  by  him  as  administrator. 

The  plaintiff  claimed  a  distributive  share  of  an  estate  in  right 
of  his  wife;  he  and  his  wife  made  an  agreement  with  the  defend- 


ILLEGAL    CONTRACTS.  367 

ant,  that  the  latter  was  to  settle  the  estate  without  taking  out  let- 
ters of  administration,  and  pay  over  the  amount  due  for  distribu- 
tion ;  the  defendant  sold  the  property  and  paid  the  debts,  and  this 
action  was  brought  for  the  balance  due  for  distribution.  The  court 
held  that  the  plaintiff  was  entitled  in  his  own  right  and  not  as 
administrator,  directed  a  nonsuit,  and  the  plaintiff  appealed. 

Ruffin,  C.  J.  The  point,  whether  the  right  of  action  on  the 
contract,  supposing  it  to  be  a  lawful  and  valid  contract  is  in  the 
husband  in  his  own  right,  or  survived  to  him  as  administrator  of 
his  wife,  involves  much  nice  learning.  We  are  relieved  from  going 
into  it  by  other  matter  apparent  in  the  record,  upon  which  we  are 
satisfied  that  neither  the  husband,  nor  the  husband  and  wife  to- 
gether, could  have  an  action  upon  this  contract.  It  is  an  agree- 
ment between  the  next  of  kin  of  an  intestate  for  an  administration 
of  the  estate  and  its  distribution  by  one  of  them,  without  obtain- 
ing letters  of  administration,  or  taking  the  oath  of  office,  or  giving 
bond.  This  is  prohibited  by  the  Act  of  1715,  Rev.  Ch.,  10,  sees. 
4  and  5,  under  a  penalty  of  fifty  pounds.  (See  1  Rev.  Stat.,  chap. 
46,  sec.  8.)  After  a  vast  number  of  cases  upon  the  subject,  it 
seems  to  be  now  perfectly  settled  that  no  action  will  be  sustained 
in  affirmance  and  enforcement  of  an  executory  contract  to  do  an 
immoral  act,  or  one  against  the  policy  of  the  law,  the  due  course 
of  justice,  or  the  prohibition  of  a  penal  statute.  The  distinction 
between  an  act  malum  in  se  and  one  merely  malum  prohibitum 
was  never  sound,  and  is  entirely  disregarded;  for  the  law  would 
be  false  to  itself  if  it  allowed  a  party  through  its  tribunals  to  de- 
rive advantage  from  a  contract  made  against  the  intent  and  express 
provisions  of  the  law.  Lankton  v.  Hughes,  1  Maul.  &  Selw.,  593, 
and  Beasley  v.  Bignold,  5  Barn.  &  Aid.,  341,  establish  this  princi- 
ple upon  consideration  of  all  previous  cases.  It  will  be  seen  at 
once  that  the  court  could  not  give  the  plaintiff  a  judgment;  since 
by  the  very  act  of  receiving  the  sum  recovered  the  plaintiff  would 
be  executor  de  son  tort,  which  is  a  consequence  to  which  the  court 
can  not  allow  itself  to  be  made  accessory. 

The  nonsuit  must  therefore  stand  and  the  judgment  be 

Affirmed. 

See  Revisal.  sec.  1 ;  to  same  effect.  Ramsey  v.  Woodward.  48—508 ; 
Carter  v.  Greenwood,  58—410;  Mitchell  v.  Mitchell,  132—350.  It  being 
unlawful  to  remove  an  apprentice,  a  contract  based  upon  such  removal  is 
void.  Futrell  v.  Vann,  30-402:  or  to  assign  his  services,  Allison  v.  Nor- 
wood, 44 — 414.  A  contract  will  be  void  even  if  not  expressly  forbidden, 
if  it  is  against  the  general  policv  or  intent  of  the  statute.  Moore  v. 
Woodard,  83— p.  532;  Llovd  v.  R.  R.,  151—536;  Koepke  v.  Peper,  155 
Iowa,  687,  136  N.  W.,  902. 

Weights  and  measures  must  be  of  proper  standard  and  tested,  and  the 
use  of  any  other  subjects  the  user  to  a  penalty,  Revisal,  3063,  3067,  3073. 
It  has  been  held  in  some  courts  that  a  dealer  failing  to  comply  with  such 


368  FORMATION    OF    CONTRACT. 

a  statute  could  not  recover  the  price,  30  Am.  &  Eng.  Encyc,  459,  462,  463; 
Clark  Cont,  263;  the  question  has  not  been  raised  in  this  State,  except  as 
to  the  penalty.  Sutton  v.  Phillips,  116—502,  117—228;  Nance  v.  R.  R., 
149-366;  Levison  v.  Boas,  150  Cal,  185,  88  Pac,  825,  12  L.  R.  A.   (N.  S.), 

585.  ■     j      rr 

Failure  to  put  a  revenue  stamp  on   an   instrument,   when   required,   attects 

it  as  evidence  only  in  the  Federal  courts.     Davis  v.  Evans,  133 — 320. 
See  generally,   1    Page   Cont.,  sees.  327-334;  9  Cyc,  475;    15   Am.  &   Eng. 

Encyc,  938;   Clark  Cont.,  260;  6  R.   C.  L,  699. 

2.  Profession   or  trade. 
(147)   PUCKETT  v.  ALEXANDER, 

102  N.  C,  95,  8  S.  E,  767,  3  L.  R.  A.,  43—1889. 

This  was  a  civil  action  by  the  plaintiffs  against  the  defendant, 
as  administrator,  for  the  settlement  of  an  estate. 

The  defendant  held  a  diploma,  from  a  regular  medical  college  in 
1876,  and  had  been  practicing  medicine  since  that  time.  He  was 
not  licensed  by  the  State  Board  as  required  by  The  Code,  vol.  2, 
chap.  34;  he  was  employed  by  his  intestate  to  attend  him  as  a 
physician  during  the  year  1883,  and  his  bill  was  presented  to  the 
intestate  during  his  life,  and  he  promised  to  pay  the  same;  the 
plaintiff  as  administrator  retained  his  bill,  $325,  out  of  the  estate, 
and  the  clerk  allowed  it. 

The  court  below  sustained  the  exception  of  the  plaintiff  to  the 
ruling  of  the  clerk,  and  the  defendant  appealed. 

Shepherd,  J.  The  Act  of  Assembly  of  1852,  chap.  258,  sec.  2, 
reenacted  by  sec.  3122  of  The  Code,  provides  that  "no  person  shall 
practice  medicine  or  surgery,  nor  any  of  the  branches  thereof,  nor 
in  any  case  prescribe  for  the  cure  of  diseases,  for  fee  or  reward, 
unless  he  shall  be  at  first  licensed  to  do  so  in  the  manner  herein- 
after provided;  Provided,  that  no  person  who  shall  practice  in 
violation  of  this  chapter  shall  be  guilty  of  a  misdemeanor."  Sec- 
tion 2  of  the  same  act,  reenacted  by  sec.  3132  of  The  Code,  pro- 
vides that  such  persons  shall  not  be  entitled  to  sue  for  or  recover 
before  any  court  for  such  services.  The  defendant  has  been  con- 
stantly practicing  medicine  since  he  received  a  diploma  from  a 
regular  medical  college  in  1867,  and  for  "fee  or  reward"  rendered 
the  services  in  1883,  which  constitute  the  basis  of  his  claim  in  this 
action.  The  performance  of  such  services  for  fee  or  reward  was 
absolutely  prohibited  by  the  statute,  and  the  contract  was,  there- 
fore, void  in  its  inception.  It  is  immaterial  whether  the  act  of  the 
defendant  was  malum  in  se  or  one  merely  malum  prohibitum. 

Ruffin,  C.  J.,  in  Sharp  v.  Farmer,  20  N.  C,  255,  says  that  the 
distinction  between  these  "was  never  sound,  and  is  entirely  disre- 
garded;  for  the  law  would  be  false  to  itself  if  it  allowed  a  party, 


ILLEGAL    CONTRACTS.  369 

through  its  tribunals,  to  derive  advantage   from  a  contract  made 
against  the  intent  and  express  provisions  of  the  law." 

The  defendant,  however,  insists  that  vitality  is  given  to  this  void 
contract  by  chap.  261,  Acts  1885,  which  provides  that  sec.  3132  of 
The  Code  be  amended  "by  adding  after  the  last  word  of  said  sec- 
tion the  words :  Provided,  that  this  section  shall  not  apply  to  phy- 
sicians who  have  a  diploma  from  a  regular  medical  college  prior 
to  January  the  1st,  1880." 

What  effect  this  proviso  has  upon  sec.  3122  by  way  of  repeal- 
ing its  prohibitory  features  as  to  such  cases,  we  are  not  now  called 
upon  to  decide,  as  the  amendatory  act  is  clearly  prospective,  and 
does  not  affect  the  case  before  us.  Richardson  v.  Dorman,  Extrx., 
28  Ala.,  681 ;  Dwarris  on  Statutes,  162,  et  seq.  Even  if  the  stat- 
ute were  in  terms  retroactive,  and  repealed  sec.  3122,  it  could  not 
have  the  effect  of  creating  a  liability.  "A  contract,  void  at  the 
time  of  its  inception,  can  not  be  validated  by  subsequent  legislation, 
and  if  it  violates,  when  made,  a  statute,  the  repeal  of  that  statute 
does  not  make  it  operative."  Wharton's  Law  of  Contracts,  vol.  1, 
sec.  368.  If  the  contract  had  not  been  void  by  reason  of  sec.  3122, 
the  defendant  would  have  been  entitled  to  enforce  his  claim  after 
the  passage  of  the  amendatory  act,  the  effect  of  which  was  to  re- 
move the  disability  to  sue  imposed  by  sec.  3132,  that  section  not 
affecting  the  right,  but  the  remedy  only.  Hewit  v.  Wilcox,  1  Met- 
calf,  154. 

It  is  further  contended  that,  notwithstanding  this  construction 
of  the  several  acts  of  Assembly,  the  defendant  is  entitled  to  en- 
force his  claim,  by  reason  of  the  express  promise  of  his  intestate 
to  pay  for  the  services.  The  date  of  this  promise  does  not  appear 
from  the  case  prepared  by  the  court  below. 

The  record  shows  that  administration  was  granted  before  the 
passage  of  the  Act  of  1885.  However  this  may  be,  we  are  of  the 
opinion  that,  the  contract  being  void  in  its  inception,  there  was  no 
consideration  to  support  the  promise,  and  it  is,  therefore,  inef- 
fectual to  sustain  the  defendant's  demand.  The  doctrine  of  a 
purely  moral  consideration  being  sufficient  to  support  an  express 
promise,  attributed  to  Lord  Mansfield,  was,  as  is  said  by  Mr. 
Wharton  in  his  work  on  Contracts,  supra,  sec.  512,  "soon  aban- 
doned in  his  own  court,  and  it  is  now  settled,  both  in  England  and 
the  United  States,  that  no  merely  moral  obligation,  no  matter  how 
strong,  can  support  a  promise  unless  the  benefit  from  which  the 
obligation  arises  was  conditioned  on  the  promise." 

In  the  elaborate  note  to  the  case  of  Senall  v.  Adney,  3  Bos.  & 
Pul.,  252,  the  true  rule,  it  seems  to  us,  is  laid  down:  "That  if  a 
contract  between  two  persons  be  void  and  not  merely  voidable,  no 
subsequent  express  promise  will  operate  to  charge  the  party  prom- 


370  FORMATION    OF    CONTRACT. 

ising,  even  though  he  has  derived  a  benefit  from  the  contract." 
This  view  is  fully  sustained  in  Felton  v.  Reid,  52  N.  C,  269,  and 
in  Smith  on  Contracts,  203,  where  the  author  quotes,  with  ap- 
proval, the  language  of  Tindall,  C.  J.,  that  "a  subsequent  express 
promise  will  not  convert  into  a  debt  that  which,  of  itself,  was  not 
a  legal  debt." 

We  are  of  the  opinion  that  there  was  no  error,  and  that  the 
judgment  should  be  .  Affirmed. 

(148)  VINEGAR  CO.  v.  HAWN, 

149  N.   C,  355,  63   S.  E.,  78—1908. 

The  plaintiff's  predecessor,  or  assignor,  was  engaged  in  the  sale 
of  cider,  which  was  intoxicating,  and  contracted  to  sell  and  deliver 
cider  to  the  defendant  in  Hickory,  knowing  that  such  sale  was 
prohibited  by  the  laws  of  the  State  at  the  time  of  such  contract 
of  sale  and  of  the  delivery.  There  was  a  judgment  for  defendant, 
and  the  plaintiff  appealed. 

Clark,  C.  J.  .  .  .  The  jury  found  that  the  contract  was  made  in 
Hickory ;  that  it  was  agreed  that  the  delivery  was  to  be  made 
there,  and  that  delivery  was  in  fact  made  there.  This  made  the  trans- 
action illegal.  State  v.  Johnston,  139  N.  C,  640;  State  v.  Herring, 
145  N.  C,  418.  This  is  not  a  case  where  a  drummer  here  took 
an  order  for  liquor  to  be  shipped  in  from  another  State,  as  was 
alleged  in  State  v.  Hanner,  143  N.  C,  632. 

There  is  no  prayer  for  instruction  raising  that  point,  but  if  there 
was,  Ihe  contract  being  made  in  Hickory  to  deliver  there  would 
make  this  an  illegal  contract,  and  the  courts  will  not  lend  their 
aid  to  collect  an  account  based  on  such  contract.  If  the  liquor 
was  shipped  in  from  another  State,  that  was  simply  the  method 
the  plaintiff  took  to  procure  it  for  his  purposes.  The  delivery  to 
defendant  was  agreed  to  be  made  in  Hickory,  and  was  so  made. 
The  plaintiff  can  not  violate  the  law  by  an  illegal  contract  and 
then  ask  the  courts  to  help  him  enforce  it. 

When,  as  here,  the  parties  are  in  pari  delicto,  the  courts  will 
help  neither.  If  the  money  has  been  paid,  it  can  not  be  recovered 
back  unless  the  statute  so  provides  (as  in  regard  to  usury,  Re- 
visal  1951),  and  if  not  paid,  the  courts  will  not  aid  collection.  It 
will  leave  the  parties  to  their  own  devices.  King  v.  Winants,  71 
N.  C,  469;  Griffin  v.  Hasty,  94  N.  C,  438:  Basket  v.  Moss,  115 
N.  C,  448;  McNeill  v.  R.  R.,  135  N.  C,  733;  Oscanyan  v.  Arms 
Co.,  103  U.  S.,  261  (which  says,  "Even  if  the  invalidity  of  the 
contract  be  not  specially  pleaded")  ;  Ewell  v.  Daggs,  108  U.  S., 
146.  The  law  will  not  lend  its  aid  where  the  contract  "appears  to 
have  been  entered  into  by  both  the  contracting  parties  for  the  ex- 


ILLEGAL,    CONTRACTS.  371 

press  purpose  of  carrying  into  effect  that  which  is  prohibited  by 
law."  Broom's  Legal  Maxims,  108.  The  Oklahoma  court  neatly 
sums  up  the  doctrine  thus:  "The  principle  to  be  extracted  from 
all  the  cases  is,  that  the  law  will  not  lend  its  support  to  a  claim 
founded  upon  its  violation."     Kelly  v.  Courter,  1   Okla.,  277. 

No  error. 

There  are  many  regulations  in  regard  to  professions  and  trades  given 
in  the  Revisal :  Dentists,  3642;  physicians,  3645,  3646;  embalming,  3644; 
pharmacy,  3649-3654;  trained  nurses,  3656;  peddlers,  3789;  attorneys,  207; 
auctioneers,  219;  insurance,  4746  et  scq.;  child  labor  in  factories,  3362; 
and  dealing  in  various  articles,  mentioned  in  Revisal,  chap.  81.  Sale 
of  liquor,  Liquor  Co.  v.  Johnson,  161—74;  Pfeifer  v.  Israel,  161—409; 
Bluthenthal  v.  Kennedy,  165—372.  Violation  of  statute  generally,  Buck- 
ley v.  Humason,  50  Minn.,  195,  52  N.  W..  385,  16  L.  R.  A.,  423;  Deaton 
v  Lawson,  40  Wash.,  486,  82  Pac.  879.  2  L.  R.  A.  (N.  S.),  392;  Schafer 
v.  Johns,  23  N.  D.,  593,  137  N.  W.,  481.  42  L.  R.  A.  (N.  S.).  412. 

A  sale  of  liquor  for  over  $10  on  credit,  contrary  to  act  of  1798,  Revisal, 
977,  makes  the  whole  contract  void.     Covington  v.  Threadgill,  88—186. 

There  is  a  distinction  made  between  a  regulation  for  revenue  only,  and 
one  intended  to  prohibit  the  act  and  protect  the  public.  Clark  Cont.,  261. 
This  would  seem  to  be  the  difference  between  the  annual  tax  of  $5,  im- 
posed on  lawvers,  doctors,  etc.,  and  the  pavment  of  license  fees.  Johnson 
v.  Berry,  20  S.  D..  133,  104  N.  W.,  1114,  1  L.  R.  A.  (N.  S.),  1159;  6  R. 
C.   L.,   704. 

3.  Sunday    contracts. 

(149)   MELVIN  v.  EASLEY, 

52  N.  C,  356—1860. 

Action  on  the  case  for  deceit  and  false  warranty  in  the  sale  of 
a  horse.  There  was  a  judgment  for  the  plaintiff,  and  defendant 
appealed. 

Pearson,  C.  J.  The  defendant  sold  a  horse  to  the  plaintiff  with 
a  warranty  of  soundness  which  was  false.  The  sale  was  made  on 
Sunday,  in  the  country,  no  one  being  present  except  the  parties 
and  a  witness.  The  defendant  was  a  horse-trader,  which  was 
known  to  the  plaintiff.  The  question  is,  can  the  defendant  defeat 
the  action  because  the  sale  was  on  Sunday? 

The  defense  was  put  on  the  statute,  Rev.  Stat.,  chap.  118.  sec. 
1  :  "That  all  and  every  person  or  persons  whatsoever  shall,  on  the 
Lord's  day,  commonly  called  Sunday,  carefully  apply  themselves 
to  the  duties  of  religion  and  piety,  and  that  no  tradesman,  artifi- 
cer, planter,  laborer,  or  other  person  whatsoever,  shall,  upon  the 
land  or  water,  do,  or  exercise  any  labor,  business,  or  work,  of  their 
ordinary  calling  (works  of  necessity  and  charity  only  excepted)  on 
the  Lord's  day,  aforesaid  or  any  part  thereof,  on  pain,  that  every 
person  so  offending,  being  of  the  age  of  fourteen  years  and  up- 
wards, shall  forfeit  and  pay  the  sum  of  one  dollar."  This  statute 
is  taken  from  29  Car.  2,  chap.  2,  sec.  1,  which  was  enacted  in  this 


372  FORMATION    OF    CONTRACT. 

colony  in  1741,  and  reenacted  after  the  adoption  of  the  Constitu- 
tion. My  opinion  is  that  the  defense  can  not  be  supported,  and  I 
put  it  on  two  grounds : 

I  do  not  believe  the  plaintiff  comes  within  the  operation  of  the 
statute.  Buying  horses  was  not  his  "ordinary  calling,"  so  the 
statute  does  not  prohibit  him  from  doing  so,  or  impose  any  penalty 
upon  him. 

I  admit  that  if  a  shop  is  kept  open  on  Sunday,  or  goods  are  sold 
at  auction,  the  price  can  not  be  recovered ;  I  also  admit,  for  the 
sake  of  the  argument  on  this  view  of  the  case,  that  the  defendant 
could  not  maintain  an  action  for  the  price  of  the  horse.  It  is  said 
the  plaintiff  knew  the  defendant  was  a  horse-trader  and  concurred 
in  his  violation  of  the  statute,  and  consequently,  was  particeps 
criminis.  Does  this  consequence  follow?  In  crimes,  there  are  ac- 
cessories ;  in  misdemeanors,  all  who  aid  or  concur  are  held  to  be 
equally  guilty,  and  are  subject  to  like  punishment  with  the  party 
who  commits  the  offense.  This  plaintiff  is  not  guilty  of  violating 
the  law,  and  is  not  subject  to  a  penalty,  so  he  can  not  be  particeps 
criminis  in  the  legal  sense  of  the  term.  He  is  not  in  pari  delicto, 
and  it  is  against  the  policy  of  the  law,  and  will  defeat  its  object 
so  to  consider  him.  The  court  will  not  aid  any  person  who  violates 
the  law ;  therefore,  the  defendant  could  not  maintain  an  action. 
This  rule  is  adopted  on  the  ground  of  policy,  for  the  purpose  of 
preventing  a  violation  of  the  law,  and  if  confined  in  its  operation 
to  the  actual  offender,  its  application  will  be  salutary,  but  if  it  be 
extended  to  the  party  who  is  not  an  offender,  so  far  from  check- 
ing, it  will  encourage  a  violation  of  it,  by  letting  it  be  known  to 
"horse-traders,"  "shop-keepers"  and  "all  whom  it  may  concern," 
that  they  may  cheat  with  impunity,  provided  always,  it  may  be 
done  on  the  Lord's  day !  They  will  readily  purchase  "this  indul- 
gence and  dispensation"  by  paying  "one  dollar,"  if  it  should  be 
sued  for. 

If  it  be  said  this  will  prevent  people  from  trading  with  them, 
the  reply  is,  that  is  not  the  object  of  the  statute,  but  to  prevent 
"tradesmen,"  "artificers,"  etc.,  from  exercising  their  ordinary  call- 
ing on  Sunday,  etc.,  so  this  action  of  the  court  shifts  the  opera- 
tion and  fixes  the  burden  on  those  not  included  in  the  prohibition, 
and  upon  whom,  alone,  the  penalty  is  imposed. 

Our  attention  was  called  in  the  argument  to  a  remark  of  Bailey, 
Judge,  in  Bloxome  v.  Williams,  3  Barn.  &  Cress.,  232  (10  E.  C. 
L,.  Rep.,  60).  In  that  case  the  plaintiff  did  not  know  that  the  de- 
fendant was  a  horse-trader,  and  it  is  held  that  he  could  recover, 
and  the  learned  Judge  incidentally  says :  "If  the  plaintiff  had 
known  the  defendant  was  a  horse  dealer,  such  knowledge  of  the 
illegality  of  the  contract  would  have  prevented  him   from  main- 


ILLEGAL,    CONTRACTS.  373 

taining  the  action."  This  was  a  mere  dictum,  not  even  called  for 
in  aid  of  the  argument.  I  can  not  suppose  that  the  learned  Judge 
took  time  to  consider  of  it,  for  he  overlooks  the  fact  that  the  pro- 
hibition and  the  penalty  apply  to  the  defendants  only. 

In  the  second  place,  I  do  not  believe  a  contract,  like  that  under 
consideration,  comes  within  the  operation  of  the  statute.  A  con- 
tract made  on  Sunday  may  be  enforced  by  an  action  at  common 
law.  This  is  settled.  Drury  v.  Defontaine,  1  Taunton,  130,  in 
which  it  is  decided  that  one,  whose  ordinary  calling  was  to  sell 
horses  at  auction,  may  recover  the  price  of  a  horse  sold  on  Sunday 
at  private  sale.  The  ordinary  calling  of  the  defendant  was  to  sell 
horses  at  private  sale,  and  I  admit  that  this  case  comes  within  the 
words  of  the  statute,  although  the  sale  was  made  in  the  country, 
where  no  one  was  present  except  the  parties  and  the  witness.  So 
the  case  of  a  lawyer,  who  sits  in  his  room  and  reads  a  law  book, 
or  writes  a  deed,  or  a  merchant,  who  in  his  counting-room,  posts 
his  books,  or  an  old  lady,  who  sits  by  her  fireside  and  knits,  if  done 
on  Sunday,  comes  within  the  words  of  the  statute.  But  my  opin- 
ion is  that  the  statute  is  void  and  inoperative  in  respect  to  cases 
of  this  kind,  and  that  its  operation  is  confined  to  manual,  visible 
or  noisy  labor,  such  as  is  calculated  to  disturb  other  people;  for 
example,  keeping  an  open  shop  or  working  at  a  blacksmith's  anvil, 
or  crying  an  auction  in  a  town.  The  Legislature  has  power  to 
prohibit  labor  of  this  kind  on  Sunday,  on  the  ground  of  public 
decency,  and  to  prevent  public  devotion  from  being  disturbed;  in 
the  same  way  as  the  exhibition  of  animals  or  the  sale  of  spirituous 
liquors  within  a  certain  distance  of  a  religious  assembly  is  prohib- 
ited. But  when  it  goes  further,  and  on  the  ground  of  forcing  all 
persons  to  observe  the  Lord's  day,  and  carefully  apply  themselves 
to  the  duties  of  religion  and  piety  on  that  day,  prohibits  labor 
which  is  done  in  private,  and  which  does  not  offend  public  decency 
or  disturb  the  religious  devotions  of  others,  the  power  is  exceeded, 
and  the  statute  is  void  for  the  excess,  by  force  of  the  "declaration 
of  rights,"  sec.  19 :  "All  men  have  a  natural  and  unalienable  right 
to  worship  Almighty  God  according  to  the  dictates  of  their  own 
conscience."  Ours  is  a  Christian  country,  but  Christianity  is  not 
established  by  law,  and  the  genius  of  our  free  institutions  requires 
that  "Church"  and  "State"  should  be  kept  separate.  In  England, 
religion  is  established  by  law.  The  head  of  the  Church  is  the  head 
of  the  State,  and  the  statute  29  Car.  2,  has  full  force  and  effect. 
Here,  there  is  a  different  condition  of  things,  and  only  such  part 
of  the  statute  as  is  necessary  to  enforce  public  decency  is  of  force 
and  effect.  In  Fennell  v.  Ridler,  5  Barn.  &  Cress..  406  (11  E.  C. 
L.  Rep.,  261),  the  case  of  a  private  sale,  by  a  horse-dealer,  on 
Sunday,  is  held  to  be  within  the  operation  of  the  statute,  on  the 


3/4  FORMATION    OF    CONTRACT. 

express  ground  that  "the  spirit  of  the  act  is  to  advance  the  interest 
of  religion,  to  turn  a  man's  thoughts  from  his  worldly  concerns 
and  to  direct  them  to  the  duties  of  piety  and  religion,  and  the  act 
can  not  be  construed  according  to  its  spirit,  unless  it  is  so  con- 
strued as  to  check  the  course  of  worldly  traffic."  This  is  the  lan- 
guage of  Bayley,  Judge,  who,  in  the  case  of  Bloxome  v.  Williams, 
supra,  expressed  a  doubt  whether  the  statute  applies  to  a  bargain 
of  this  description,  and  inclined  to  think  "that  it  applies  only  to 
manual  labor  and  other  work  visibly  laborious,  and  the  keeping  of 
open  shops."  This  was  while  he  was  under  the  impression  that  the 
intention  of  the  act  was  to  promote  "public  decency,"  but  after- 
wards, in  Fenner  v.  Ridler,  supra,  upon  further  consideration,  he 
expressed  himself  satisfied  that  "there  was  nothing  in  the  act  to 
show  that  it  was  passed  exclusively  for  promoting  public  decency, 
and  not  for  regulating  private  conduct.  Labor  may  be  private  and 
not  meet  the  public  eye,  and  so  not  offend  against  public  decency, 
but  it  is  equally  labor,  and  equally  interferes  with  a  man's  religious 
duties."  So  these  two  cases  establish  the  position,  that  considering 
the  act  as  passed  exclusively  for  promoting  public  decency,  the 
case  of  a  private  sale  would  not  come  within  its  operation,  and  it 
was  only  by  extending  its  object  to  the  regulation  of  private  con- 
duct, and  the  enforcement  of  religious  duties,  that  such  a  sale  was 
brought  within  its  operation;  it  follows  that  a  private  sale  is  not 
within  the  operation  of  the  statute,  so  far  as  it  can  be  allowed 
force  and  effect. 

The  cases  cited  from  the  New  England  States  have  no  bearing. 
Their  statutes  prohibit  all  secular  labor  on  the  Sabbath,  and  the 
notions  there  entertained  are  far  more  strict  and  intolerant  than 
the  sentiments  that  have  heretofore  prevailed  in  this  State. 

The  general  one  of  State  v.  Williams,  26  N.  C,  400,  and  Shaw 
v.  Moore,  49  N.  C,  25,  fully  accords  with  this  conclusion.  In  my 
opinion  there  is  No  error. 

Manly,  J.,  files  a  concurring  opinion ;  Battle,  J.,  files  dissenting 
opinion. 

The  present  law  is  Revisal,  2836.  See  discussion  by  Ruffin.  C.  J.,  in 
26—400,  and  by  Clark,  C.  J.,  in  Rodman  v.  Robinson,  134—503. 

Service  of  process  on  Sunday  is  valid  unless  prohibited  by  law.  White 
v.  Morris,  107— p.  99;  Revisal,  2837.  While  Sunday  is  not  a  juridical  day, 
courts  may  sit  on  Sunday  by  necessity,  and  a  verdict  and  judgment  may 
be  rendered.     Tavlor  v.  Ervin,   119 — 274. 

Conflict  of  laws.— Where  the  lex  loci  prohibits  Sunday  contracts,  the 
court  will  not  consider  the  market  price  prevalent  on  that  day,  in  deter- 
mining damages  for  breach  of  contract  to  transport  cattle  to  market. 
Absher  v.  R.  R.,  108—344;  Waters  v.  R.  R.,  108—349.  The  illegal  purpose 
of  the  plaintiff  to  sell  on  Sunday  can  not  excuse  the  defendant  for  negli- 
gence, unless  that  entered  into  the  consideration  between  them.  S.  C, 
110—338.  Sundav  trains,  Revisal,  3844;  Lovell  v.  B.  &  M.  R.  R.,  75  N. 
H.,  568.  78  All.,  621,  34  L.  R.  A.   (N.  S.),  67. 

On    Sunday   contracts   generally,    see    Bryan    v.    Watson,    127    Ind.,   4i,    Zo 


ILLEGAL,    CONTRACTS.  375 

N  E  666,  11  L.  R.  A.,  63;  Allen  v.  Duffie,  43  Mich.,  1,  4  N.  W.,  427,  38 
A'  R"  159;  Jacobson  v.  Bentzler,  127  Wis.,  566,  107  N.  W.,  7,  4  L.  R.  A. 
(N  S.),  1151;  King  v.  Graef,  136  Wis.,  548,  117  N.  W,  1058,  20  L.  R.  A. 
N.  S.),  86;  Collins  v.  Collins,  139  Iowa,  703,  117  N.  W,  1089,  18  L 
R  A.,  (N.  S.),  1176,  16  Ann.  Cas,  630;  Page  Cont,  sees.  455-460;  Clark 
Cont,  265;  27  Am.  &  Eng.  Encyc.,  403;  37  Cyc.,  557. 

4.  Usury. 

(150)   WARD  v.  SUGG, 

113  N.  C,  489,  18  S.  E.,  717,  24  L.  R.  A.,  280-1893. 

Action  to  enjoin  a  sale  under  a  mortgage,  and  to  have  a  note 
and  mortgage  canceled  for  usury.  There  was  a  verdict  and  judg- 
ment for  defendant,  and  plaintiff  appealed. 

Clark,  J.  The  jury  found  that  the  note  for  $400  in  suit  was 
wholly  given  for  an  usurious  charge  for  use  of  money,  and  that 
the  present  holder  acquired  it  before  maturity,  for  value  and  with- 
out notice.  The  question,  whether  it  is  valid  in  his  hands  is  not 
an  open  one  in  this  State.  Such  note  is  held  to  be  void  into  what- 
soever hands  it  may  pass.  Ruffin  v.  Armstrong,  9  N.  C,  411; 
Collier  v.  Nevill,  14  N.  C,  30.  Such  was  also  the  law  in  England 
until  it  was,  in  some  respects,  modified  by  the  Act  of  58  George 
III,  and  is  still  the  law  in  New  York  and  other  States,  except 
where  modified  by  statute.  Randolph  on  Commercial  Paper,  sec. 
525;  3  Lawson  Cont.  (5  Ed.),  117;  Powell  v.  Waters,  8  Cowen, 
669;  Wilkie  v.  Roosefelt,  3  John  Cas.,  206;  Solomons  v.  Jones,  5 
Am.  Dec,  538 ;  Oneida  v.  Ontario,  21  N.  Y.,  495,  cited  by  Smith, 
C.  J.,  in  Rountree  v.  Brinson,  98  N.  C,  107;  Callahan  v.  Shaw, 
24  Iowa,  441. 

When  the  statute  makes  a  note  void  it  is  void  into  whosesoever 
hands  it  may  come,  but  when  the  statute  merely  declares  it  illegal 
the  note  is  good  in  the  hands  of  an  innocent  holder.     Glenn  v. 
Bank,  70  N.  C,  191,  206.     Hence  it  was  argued  strenuously  that 
the  authorities  above  cited  were  good  under  our   former  statute, 
which  made  the  contract  void,  but  that  the  present  statute  merely 
makes  the  contract  illegal.    It  does  not  seem  so  to  us.    The  former 
statute   (Rev.  Code,  chap.  114;  Rev.  Stat.,  chap.  117),  denounced 
the  contract  as  void  as  to  the  whole  debt,  principal  and  interest. 
The  present  statute  (The  Code,  sec.  3836),  makes  it  void,  not  as 
to  principal,  but  as  to  the  interest  only.     It  provides  that  "the  tak- 
ing, receiving,  reserving  or  charging  a  rate  of  interest  greater  than 
is  allowed     .     .     .     shall  be  deemed  a  forfeiture  of  the  entire  in- 
terest    .     .     .     which  has  been  agreed  to  be  paid,"  with  a  further 
provision  that,  if  such  interest  has  been  paid,  double  the  amount 
can  be   recovered  back  by  the  debtor.     The  only   difference  be- 
tween the  two  acts  is  that  formerly  the  whole  note  was  forfeited 


376  FORMATION    OF    CONTRACT. 

and  of  no  avail,  and  now  only  the  stipulation  as  to  the  interest  is 
ipso  facto  deemed  forfeited  and  void.  But  the  point  has  already 
been  adjudicated  by  this  court. 

In  two  cases  this  court — and  by  most  eminent  judges — has  ex- 
pressly held  that  the  words,  "deemed  a  forfeiture,"  in  the  Act  of 
1876-7  (now  The  Code,  sec.  3836),  makes  void  the  agreement  as 
to  interest.  If  any  attention  is  to  be  paid  to  the  doctrine  of  stare 
decisis,  the  precedents  in  our  own  court  do  not  leave  this  open  to 
debate. 

In  Bank  v.  Lineberger,  83  N.  C,  454  (on  page  458),  Ashe,  J., 
quotes  this  section  in  full,  and  says :  "The  purpose  and  effect  of 
this  statute  were  not  only  to  make  void  all  argeements  for  usuri- 
ous interest,  but  to  give  a  right  of  action  to  recover  back  double 
the  amount  after  it  has  been  paid."  Dillard,  J.,  in  Moore  v. 
Woodard,  83  N.  C,  531  (on  page  535),  says:  "They  (the  notes 
there  sued  on)  are  both  wholly  for  illegal  interest,  if  the  allega- 
tions of  the  answer  be  true,  and,  if  so,  the  sentence  of  the  law  is 
that  they  are  void;"  and  further  says:  "The  device  of  taking  a 
distinct  bond  and  mortgage  for  the  interest  does  not  take  the  case 
out  of  the  operation  of  the  statute."  The  opinion  of  such  judges 
speaking  for  a  court,  constituted  as  the  bench  then  was,  are  surely 
entitled  to  be  considered  the  law  in  this  State  until  changed  by 
legislation.  And  in  Glenn  v.  Bank,  70  N.  C,  191  (bottom  of  page 
205),  Rodman,  J.,  says:  "It  is  admitted  law  that  notes  vitiated 
by  an  usurious  or  gaming  consideration  can  not  be  enforced  in  the 
most  innocent  hands,  but  are  always  and  under  all  circumstances 
void." 

In  1  Daniel  Neg.  Inst.,  sec.  198,  it  is  stated  that,  where  the 
statute  provides  that,  "in  an  action  brought  on  a  contract  for  pay- 
ment of  money  it  shall  appear  that  unlawful  interest  has  been 
taken,  the  plaintiff  shall  forfeit  threefold  the  amount  of  the  unlaw- 
ful interest  so  taken,  it  was  held  to  apply  to  the  innocent  en- 
dorsee of  a  note,  who  received  it  in  due  course  of  trade ;  and,  as 
a  general  rule,  all  contracts  founded  on  considerations  which  em- 
brace an  act  which  the  law  prohibits  under  a  penalty  are  void," 
citing  Kendall  v.  Robertson,  12  Cush.,  156;  Woods  v.  Armstrong, 
54  Ala.,  150.  In  Kendall  v.  Robertson,  the  Massachusetts  law 
had  undergone  a  change  similar  to  ours,  and  Shaw,  C.  J.,  says: 
"The  former  law  extended  the  entire  forfeiture  to  any  holder  of 
the  note,  though  an  innocent  endorsee.  The  natural  conclusion  is, 
in  the  absence  of  express  words  changing  the  operation  of  the  law, 
that  it  was  the  intention  of  the  Legislature  to  extend  such  partial 
forfeiture  in  like  manner,  and  attach  it  as  before  to  the  note, 
although  held  by  an  innocent  endorsee  without  notice.  In  both 
cases  the  intention  of  the  Legislature  seems  to  have  been  the  same, 


ILLEGAL    CONTRACTS.  377 

to  suppress  a  mode  of  lending  regarded  as  dangerous  and  injurious 
to  society,  by  attainting  the  contract,  and  attaching  the  penal  con- 
sequence to  the  contract  itself,  whenever  set  up  as  a  proof  of  a 
debt."  And  at  last  term  of  this  court  (Moore  v.  Beaman,  112 
N.  C,  558),  it  is  said:  "The  contract,  usury  being  pleaded,  is 
simply  a  loan  of  money,  which,  in  law,  bore  no  interest." 

Our  own  decisions  upon  our  own  statute  should  govern,  even 
though  a  court  of  another  jurisdiction  upon  a  somewhat  similar 
statute  had  ruled  differently.  But  in  fact  the  case  relied  on  to 
that  effect  (Oates  v.  Bank,  100  U.  S.,  239),  merely  holds  that  the 
contract,  being  not  void  in  toto,  but  only  as  to  the  interest,  "being 
legal  in  part,  and  vicious  in  part,  the  former  will  support  a  con- 
tract of  endorsement."  But  here  the  note  is  solely  for  usury  and, 
being  wholly  vicious,  the  case  cited  is  authority  against  its  validity 
in  the  hands  of  the  assignee. 

The  note  for  the  usurious  interest  being  in  the  hands  of  the 
assignee,  he  and  not  the  maker  must  suffer.  The  law  regards  the 
maker  not  as  in  pari  delicto  with  the  payee,  but  as  the  victim  of 
an  oppression  which  the  law  has  denounced  and  prohibits  under 
penalty.  Bank  v.  Lutterloh,  81  N.  C,  144.  If,  by  passing  the 
note  before  maturity  and  for  value,  the  endorsee  may  recover  on 
it,  the  statute  is  useless,  as  the  protection  intended  and  prohibition 
are  alike  rendered  nugatory.  The  victim  would  have  no  recourse 
but  to  suffer  in  silence.  The  usury  would  be  collected  in  spite  of 
the  law  which  had  declared  the  "entire  interest  forfeited"  ab 
initio,  by  the  fact  of  "charging  or  reserving"  it.  On  the  other 
hand,  the  innocent  endorsee  has  his  recourse  upon  the  payee  who 
has  endorsed  the  note  to  him  (Daniel  on  Neg.  Inst.,  sec.  807),  a 
recourse  which  would  more  surely  protect  him,  being  against  the 
party  who  has  money  to  loan,  not  to  borrow.  At  any  rate,  the 
fact  that  the  endorsee's  sole  remedy,  as  to  the  interest,  is  against 
the  payee  and  endorser,  not  against  the  maker,  will  cause  such 
lenders  to  be  more  chary  of  shouldering  off  upon  innocent  parties 
the  collection  of  their  usurious  contracts. 

The  only  case  in  our  Reports  that  seems  to  mitigate  against  the 
otherwise  uniform  tenor  of  our  decisions  on  this  subject  is  Coor  v. 
Spicer,  65  N.  C,  401,  which  held  that  a  mortgage  given  to  secure 
a  usurious  bond  might  be  enforced  in  the  hands  of  an  innocent 
purchaser  for  value.  The  case  recognizes  the  general  rule,  but 
takes  mortgages  out  of  it  upon  the  supposed  wording  of  the  stat- 
ute, Rev.  Code,  ch.  50,  sec.  5  (now  The  Code,  sec.  1549).  Aside 
from  the  fact  that  this  is  held  expressly  otherwise  in  the  later  case 
of  Moore  v.  Woodard,  83  N.  C,  531,  an  examination  of  section 
1549  will  show  that  Coor  v.  Spicer  was  a  palpable  inadvertence. 
The  statute  cited  (The  Code,  sec.  1549),  in  fact  does  not  purport 


378  FORMATION    OF    CONTRACT. 

to  protect  the  innocent  holder  of  a  mortgage  note  which  is  tainted 
with  usury,  but  the  "purchaser  of  the  estate  or  property"  at  sale 
under  the  mortgage,  who  buys  without  notice  of  the  usurious  taint 
in  the  debts  secured.  It  would  be  a  fraud  for  the  mortgagor  to 
stand  by  and  let  him  purchase  without  giving  him  notice,  but  the 
maker  can  give  no  notice  usually  to  the  assignee  of  the  note. 
There  is  a  broad  distinction  which  runs  through  all  the  cases  every- 
where between  contracts  upon  an  illegal  consideration  as  to  which, 
the  parties  being  in  pari  delicto,  the  courts  will  aid  neither  party, 
but  will  protect  the  note  in  the  hands  of  a  holder  for  value  with- 
out notice,  and  a  contract  which,  in  whole  or  in  part,  is  declared 
void  or  forfeited  in  its  inception  which  can  acquire  no  validity  by 
being  passed  on  to  other  hands.  Henderson  v.  Shannon,  12  N.  C, 
147;  Glenn  v.  Bank,  supra.  As  to  usurious  contracts,  the  law  re- 
gards the  maker,  not  as  in  pari  delicto,  but  as  acting  "in  chains" 
(1  Story  Eq.  Jur.,  sec.  302),  and  to  permit  his  contract,  which  is 
demed  exacted  under  duress,  to  come  under  this  general  rule  in 
favor  of  innocent  holders  for  value  of  commercial  paper,  would 
be  to  nullify  the  protecting  statute.  The  recourse  of  the  holder  is 
against  the  payee  and  endorser,  who  is  more  likely  by  far  to  be 
able  to  respond  than  the  maker. 

The  statute  makes  the  "taking,  receiving,  reserving  or  charging 
usury,  'when  knowingly  done,'  i.  e.,  intentionally  done,  and  not  by 
a  mere  error  of  calculation,  a  forfeiture  (not  merely  forfeitable) 
of  the  entire  interest  which  the  note  carries  with  it,  'or  which  has 
been  agreed  to  be  paid  thereon.'  '  The  note  in  this  case  falls  ex- 
actly within  the  evil  denounced  in  the  last  clause.  It  is  a  written 
promise  to  pay  the  usury  reserved  or  charged  on  the  note,  and 
such  charging  or  reserving  is  ipso  facto  a  forfeiture  which  attaches 
either  by  the  taking,  receiving,  reserving  or  charging,  as  the  law- 
makers evidently  intended  to  prevent  and  head  off  all  casuistry 
for  which  this  class  of  law-breakers  have,  in  all  times,  been  spe- 
cially noted,  and  to  carry  out  the  legislative  intent  of  bona  fide 
protecting  the  public,  not  nominally,  but  in  fact,  from  evasions  of 
this  law.  But  if  in  truth  the  forfeiture  was  limited  to  the  "know- 
ingly receiving,"  the  holder  of  this  note  certainly  knows  now,  and 
doubtless  did  before  suit  brought,  that  this  note  was  given  for 
usury  "agreed  to  be  paid,"  and  his  receiving  it  would,  eo  instanti, 
work  a  forfeiture.  Besides,  if  the  maker  should  have  voluntarily 
paid  this  note,  the  receiver  of  such  payment  knowing  it  was  for 
usury,  the  statute  gives  the  person,  "by  whom  it  was  paid,  or  his 
legal  representatives,"  an  action  to  recover  back  twice  the  amount. 
Cut  bono,  then,  shall  the  debtor  be  compelled  by  law  to  pay  the 
usurious  note,  when,  instantly,  he  can  recover  back  double  the  sum 
of  the  party  to  whom  he  pays  it,  as  a  punishment  for  knowingly 


ILLEGAL    CONTRACTS.  379 

receiving  it?  Such  multiplicity  of  actions  was  not  tolerated  under 
the  old  practice,  and  certainly  will  not  be  under  the  present  simpler 
and  more  practical  system  of  procedure. 

Bank  v.  Lutterloh,  81  N.  C,  — ,  was  decided  under  the  Act  of 
1866,  and,  to  cure  the  defect  in  that  act,  the  wording  of  the  pres- 
ent statute  is  made  explicit  and  gives  the  action  to  recover  back. 
Under  the  Act  of  1866  there  was  no  forfeiture,  as  now,  but  sim- 
ply interest  could  not  be  collected.  While  the  charging,  reserving, 
etc.,  is  now  a  forfeiture  of  the  contract  as  to  all  interest  ab  initio, 
the  recovery  of  double  the  sum  paid  is  necessarily  from  the  party 
to  whom  it  is  paid,  for  the  language  is  "may  recover  back"  double 
the  sum  paid,  which  can  only  be  from  the  party  receiving  the 
money. 

With  the  policy  of  the  law-making  power  the  courts  have  noth- 
ing to  do  further  than  as  it  may  throw  light  upon  the  meaning  of 
the  statute  by  considering  the  evil  to  be  remedied.  That  is  thus 
considered  by  Taylor,  C.  J.,  in  Ruffin  v.  Armstrong,  9  N.  C,  411, 
416:  "It  is  not  less  important  now  than  it  was  then  to  restrain  the 
power  of  amassing  wealth  without  industry,  and  to  prevent  those 
who  possess  money  from  sitting  idle  and  fattening  on  the  toil  of 
others.  It  is  not  less  important  to  prevent  those  who  desire  profit 
from  their  money  without  hazard  from  receiving  larger  gains  than 
those  who  employ  it  in  undertakings  attended  with  risk,  calculated 
to  encourage  industry  and  to  multiply  the  sources  of  public  pros- 
perity. Nor  is  it  less  important  to  facilitate  the  means  of  pro- 
curing money  on  reasonable  terms,  and  thereby  to  render  the  lend- 
ing of  it  more  extensively  beneficial." 

In  a  matter  so  capable  of  oppression  as  the  lending  of  money, 
the  Legislature  has  deemed  it  wise  to  regulate  the  limit  of  what  is 
a  reasonable  exaction  for  its  use,  since  all  interest  is  the  creation 
of  statute.  Beaman  v.  Moore,  supra.  As  to  lenders  upon  a  law- 
ful rate  of  interest,  the  Legislature  has  looked  upon  them  with  a 
favorable  eye  and  of  late  years  has  raised  the  limit  from  six  to 
eight  percent.  But  there  is  nothing  in  the  action  of  the  Legisla- 
ture, nor  in  the  circumstances  of  the  day,  which  indicates  that  this 
is  a  propitious  time  to  relax  the  restrictions  placed  heretofore  upon 
the  illegal  exactions  of  those  who  would  use  their  money  contrary 
to  law,  and  yet  call  upon  the  law  to  aid  them,  directly  or  indi- 
rectly, to  secure  their  unlawful  gains. 

Bunnell,  J.,  files  a  dissenting  opinion  as  to  the  validity  in  the 
hands  of  an  innocent  purchaser. 

The  present  law  is  Revisal,  1951. 

What  is  usury? — Any  contrivance  or  device  to  get  more  interest  than 
the  law  allows.  Ehringhaus  v.  Ford,  25—522;  Massey  v.  McDowell,  20— 
252;  Arrington  v.  Goodrich,  95—462;  Burwell  v.  Burgwyn,  100—389;  Webb 
V.   Bishop,    101—99.      The    fact   of   getting   more   than   the   legal   rate   is   not 


380  FORMATION    OF    CONTRACT. 

usury,  unless  there  is  device  or  intent  to  evade  the  law.  Elliott  v.  Sugg, 
115—236;  Yarborough  v.  Hughes,  139—199;  Bennett  v.  Best,  142—168; 
Riley  v.  Sears,  154—509;  Doster  v.  English,  152—339;  MacRackan  v.  Bank, 
164—24.  Where  a  note  is  endorsed  to  another  merely  for  the  purpose  of 
raising  money  and  not  for  a  bona  fide  sale  of  the  note,  it  is  a  loan,  and 
more  than  the  legal  rate  is  usury.  Ruffin  v.  Armstrong,  9 — 411;  McElwee 
v.  Collins,  20—350;  Long  v.  Gantley,  20—457;  Sedbury  v.  Duft'ey,  58—432; 
People's  Bank  &  Tr.  Co.  v.  Fenw.  Sanitarium,  130  La.,  723,  58  So.,  523, 
43  L.  R.  A.  (N.  S.),  211;  so  when  this  is  done  through  an  agent.  Wilkes 
v.  Coffield,  10 — 28.  If  A  makes  a  valid  note  to  B,  and  B  endorses  it  to 
C  for  usurious  consideration,  this  does  not  affect  A's  liability  to  C;  if 
usurious  in  the  beginning,  it  is  void ;  a  mistake  in  the  amount  is  not 
usury.  Collier  v.  Nevill,  14 — 30;  but  the  creditor  must  show  the  mistake. 
Dawson  v.  Taylor,  28 — 225.  The  obligation  to  pay  more  than  the  legal 
rate  must  be  absolute  and  not  by  way  of  penalty.  Moore  v.  Hylton,  16 — 
433.  A  corporation  may  sell  its  bonds  bona  fide,  but  not  as  a  device  to 
borrow  money  at  more  than  the  legal  rate.  Comrs.  v.  R.  R.,  77 — 289. 
Compound  interest  is  not  allowed  except  in  certain  contracts,  as  in  notes 
to  guardians.  Cox  v.  Brookshire,  76 — 314;  Scott  v.  Fisher,  110 — 311.  In- 
terest payable  annually  or  semi-annually  is  not  usurv.  Bledsoe  v.  Nixon, 
69—89;  Knight  v.  Braswell,  70—709;  King  v.  Phillips,  95—245.  Taking 
interest  in  advance  may  be  usury,  but  this  may  be  done  by  law,  as  in 
case  of  banks.  Bank  v.  Hunter,  12—100;  29  Am.  &  Eng.  Encyc,  491.  The 
U.  S.  usury  law  is  substantially  as  the  N.  C.  statute,  see  Brown  v.  Marion 
Nat.  Bk.,  169  U.  S.,  416;  Cit.  Nat.  Bk.  v.  Gentrv,  111  Ky.,  206,  63  S.  W., 
454,  56  L.  R.  A.,  673. 

Building  and  loan  association  contracts. — These  have  been  examined  by 
the  court  in  numerous  cases  in  regard  to  interest,  Mills  v.  B.  L.  A.,  75 — 
292;  Latham  v.  B.  L.  A,  77—145;  Rowland  v.  B.  L.  A.,  115—825,  116—877; 
Meroney  v.  B.  L.  A.,  116—882;  Miller  v.  B.  L.  A.,  118—612;  Hollowell  v. 
B.  L.  A.,  120—286;  Carter  v.  Life  Ins.  Co.,  122—338;  Cheek  v.  B.  L.  A., 
126—242 ;  B.  &  L.  A.  v.  Blalock,  160—490. 

Effect  of  usury. — Charging  more  than  the  legal  rate  works  a  forfeiture 
of  all  interest,  and  accepting  more  than  the  legal  rate  gives  the  debtor  the 
right  to  recover  twice  the  amount  so  paid.  Smith  v.  B.  L.  A.,  119 — 249; 
not  merely  twice  the  excess  over  the  legal  rate.  Tavloe  v.  Parker,  137 — 418; 
Ervin  v.  Bank,  161—42;  Bexar  B.  &  L  A.  v.  Robinson,  78  Tex.,  163,  14 
S.  W.,  27,  9  L.  R.  A.,  292;  Banks  v.  Flint,  54  Ark.,  40,  14  S.  W.,  769,  10 
L.  R.  A.  (N.  S.),  459.  Under  the  act  of  1866  the  debtor  was  not  entitled 
to  a  set-off  or  counterclaim  for  usury,  but  he  is  under  the  present  law. 
Bank  v.  Lutterloh,  81 — 153.  The  act  of  1875  made  usurious  contracts  void 
and  authorized  the  recovery  of  double  the  amount  paid ;  but  if  the  note 
was  valid  in  the  beginning  but  a  usurious  contract  was  made  for  its  ex- 
tension, the  latter  only  was  void.  Cobb  v.  Morgan,  83 — 213 ;  Wharton  v. 
Eborn.  88 — 344.  In  a  building  and  loan  contract  it  was  held  in  77 — 145 
and  89 — 37  that  a  member  who  had  paid,  could  not  recover  for  usury,  but 
a  borrowing  member  may  now  recover.  120 — 286,  126 — 242.  Usury  must 
be  paid  in  monev  or  money's  worth ;  a  renewal  of  the  note  is  not  paving 
it.  Stedman  v.  Bland,  26—296;  Godfrey  v.  Leigh,  28—390;  Pritchard  v. 
Meekins,  98—244;  Rashly  v.  Bivens,  132—273.  What  amounts  to  "charg- 
ing'' interest  is  discussed  in  Grant  v.  Morris,  81 — 160,  and  Churchill  v. 
Turnage,  122 — 426 ;  "something  more  must  be  done  to  the  loss  or  detri- 
ment of  the  debtor  than  the  mere  presentation  of  an  illegal  claim,  which 
is  neither  recognized  nor  paid."  A  security  for  a  loan  is  affected  by 
usury.  Shober  v.  Hauser,  20—222 ;  Thorpe"  v.  Ricks,  21—613 ;  and  the 
debtor  may  plead  usury  as  a  defense  in  claim  and  delivery  for  the  prop- 
erty. Moore  v.  Woodard,  83 — 531 ;  but  whether  the  grantee  of  the  mort- 
gagor would  have  the  same  right  is  doubtful.  Ervin  v.  Morris,  137 — 48. 
The  right  is  said  to  be  personal.  1  Page  Cont.,  sees.  499,  504;  54  L.  R. 
A.,  731.  See  also  Faison  v.  Grandy,  128— p.  443;  Stuckey  v.  M.  S.  L.  B. 
&   Constr.   Co.,   61    W.   Va.,   74,   55    S.   E.,   996,   8  L.   R.   A.    (N.    S.),   814. 


ILLEGAL,    CONTRACTS. 


381 


Where  a  debt  extended  over  several  years  and  usury  had  been  paid^  on  it 
before  the  defendant  became  liable,  this  does  not  affect  defendant's  lia- 
bility A  judgment  rendered  on  a  debt  including  usury  is  valid.  Burwell 
v.  Burgwvn,  105—498;  Heggie  v.  B.  L.  A.,  107—581;  Best  v.  Mortgage 
Co.,  133—20.  A  surety  is  discharged  by  indulgence  to  the  principal,  but 
this  must  be  by  a  valid  contract;  if  tainted  with  usury  it  would  not  dis- 
charge. Bank  "v.  Lineberger,  83^54.  It  is  held  that  forbearance,  based 
upon  a  usurious  consideration  paid,  will  discharge  a  surety,  while  a  mere 
agreement  to  pav  will  not  discharge.  Fleming  v.  Borden,  127—214,  53 
L.  R.  A.,  316.  It  was  held  in  Coor  v.  Spicer,  65—401,  that  a  mortgage 
given  to  secure  a  usurious  debt  was  valid  in  the  hands  of  an  innocent 
purchaser;  but  it  is  not  so  held  now.  Faison  v.  Grandy,  126—827.  Action 
must  be  brought  within  two  years;  formerly  it  was  two  years  after  in- 
terest paid.  Pritchard  v.  Meekins,  98—244;  Roberts  v.  Ins.  Co.,  118— 
429 ;  but  now  it  is  two  years  from  the  payment  of  the  debt,  Smith  v.  B. 
L.  A.,  119—257,  or  from  time  summons  can  be  served.  \\  llhams  v.  B. 
L.  A.,  131—267.  Repeal  of  the  statute  does  not  make  the  debt  valid. 
Pond  v.   Home,  65—84;    Hughes  v.   Boone,  103—137. 

If  the  debtor  sues  in  equity  to  avoid  the  debt  on  the  ground  of  usury, 
he  must  tender  the  amount  due  with  legal  interest.  Taylor  v.  Smith, 
9_46S;  Mauney  v.  Elliott,  92—48;  Cook  v.  Patterson,  103—127;  but  not 
so  at  law,  Parnell  v.  Vaughan,  82—134;  Gore  v.  Lewis,  109—539;  Cheek  v. 
B.  L.  A.,  127—121;  Moore  v.  Beaman,  111—328;  and  in  the  same  case, 
112— 558, 'it  is  intimated  that  it  would  not  now  be  so  in  equity,  but  this 
view  has  not  been  adopted.  Churchill  v.  Turnage,  122— p.  430,  citing 
39_449  and  100—389;  Owens  v.  Wright,  161—127.  . 

In  Oldham  v.  Bank,  85—240,  it  was  held  that  in  a  suit  by  a  national 
bank,  usury  could  not  be  pleaded  as  a  set-off,  but  there  might  be  a  sepa- 
rate action  for  double  the  interest  paid;  but  by  change  of  law  this  may 
now  be  done  by  a  counterclaim  in  a  State  court.  Morgan  v.  Bank,  93—352; 
Bank  v.    Ireland,    122—571.  . 

Conflict  of  laws.— If  no  place  is  fixed  for  payment,  lex  loci  contractus 
governs;  but  if  the  place  is  stipulated,  lex  loci  solutionis  controls.  Mc- 
Queen v.  Burns,  8 — 176;  Arrington  v.  Gee,  27—590;  Davis  v.  Coleman, 
29—429,  33—303;  Comrs.  v.  R.  R.,  77—289;  Morris  v.  Hockaday,  94—286; 
Copeland  v.  Collins,  122—619;  unless  it  is  so  made  to  evade  the  usury 
law  of  this  State.  Meronev  v.  B.  L.  A.,  112—842;  116—882;  Rowland  v. 
B.  L.  A.,   115—825. 

For  general  discussion  of  usury,  see  Clark  Cont,  270;  29  Am.  &  Lng. 
Encyc,  453;   1   Page  Cont.,  sees.  461-505;  39  Cyc,  891. 

5.  Gambling   contracts. 
1.    WAGERS. 

(151)   GOOCH  v.  FAUCETT, 

122  N.  C,  270,  29  S.  E.,  362,  39  L.  R.  A.,  835-1898. 

Civil  action  on  a  note.  Verdict  and  judgment  for  the  defend- 
ant, and  plaintiff  appealed. 

Fairctoth,  C.  J.  C.  H.  Morton  and  defendant  agreed  to  have 
a  horse  race,  and  it  was  also  agreed  that  the  winner  should  have 
the  other's  horse.  The  race  was  run  and  Morton  was  the  winner, 
and  they  valued  defendant's  horse  at  $100,  and  instead  of  deliv- 
ering the  horse  he  gave  his  note  to  Morton  for  $100.  All  this  oc- 
curred in  the  State  of  Virginia.     Subsequently  the  defendant  re- 


382  FORMATION    OB1    CONTRACT. 

newed  said  note  for  principal  and  interest  and  gave  the  note  sued 
on,  which  was  assigned  to  plaintiff  after  maturity.  The  renewal 
took  place  in  North  Carolina.  Without  deciding  whether  the  re- 
newal was  a  North  Carolina  contract,  we  will  treat  it  as  a  Vir- 
ginia contract,  according  to  plaintiff's  contention. 

The  defendant  pleads  and  relies  on  The  Code,  sees.  2841,  2842. 
These  sections  declare  that  all  wagers,  bets  or  stakes,  depending 
upon  any  race,  lot  or  chance,  etc.,  shall  be  unlawful,  and  all  con- 
tracts, etc.,  on  account  of  money  or  property,  so  wagered,  bet  or 
staked,  shall  be  void. 

It  does  not  appear  whether  there  is  any  statute  in  Virginia  de- 
nouncing betting  on  races  as  illegal.  The  statute  law  of  another 
State  is  a  question  of  fact  to  be  proved  like  any  other  fact.  In  the 
absence  of  such  proof,  in  those  States,  once  under  the  jurisdiction 
of  England,  from  which  they  severed  their  connection,  it  is  pre- 
sumed that  the  common  law  prevails.  Griffin  v.  Carter,  40  N.  C, 
413;  Cade  v.  Davis,  96  N.  C,  139.  This  presumption  arises  from 
the  rules  of  comity  among  the  States.  This  is  not  a  right  of  either 
State,  but  is  permitted  and  accepted  by  the  States  from  mutual  in- 
terest and  convenience,  from  a  sense  of  the  inconveniences  which 
would  otherwise  result,  and  from  a  moral  necessity  to  do  justice 
in  order  that  justice  may  be  done  in  return.  Without  this  rule 
the  law  of  one  State  can  have  no  force  in  another.  But  there  is 
no  comity  among  the  courts  of  different  States.  They  administer 
the  law  in  the  same  way  and  by  the  same  reasoning  by  which  all 
other  principles  of  the  municipal  law  are  ascertained  and  guided. 
It  is  the  duty  of  every  State  to  look  to  the  interest  of  its  own 
subjects.  Comity,  being  voluntary  and  not  obligatory,  can  not  su- 
persede all  discretion  on  the  subject.  Vattel,  at  p.  61,  says:  "It 
belongs  exclusively  to  each  nation  (State)  to  form  its  own  judg- 
ment of  what  it  prescribes  to  it — what  is  proper  or  improper  for 
it  to  do,  and  it  will  examine  and  determine  what  it  can  do  for 
another  without  neglecting  the  duty  which  it  owes  to  itself.'  No 
State  can  demand  the  recognition  of  its  laws  in  another,  if  they 
are  deemed  by  the  latter  to  be  impolitic  or  unjust,  of  bad  morals, 
or  injurious  to  the  rights  and  interests  of  its  citizens,  or  against 
its  public  policy. 

In  Bank  of  Augusta  v.  Earle,  13  Pet.,  519,  589,  Chief  Justice 
Taney  said:  "The  courts  of  justice  have  always  expounded  and 
executed  them  [contracts]  according  to  the  laws  of  the  place  in 
which  they  were  made,  provided  that  law  was  not  repugnant  to  the 
laws  or  policy  of  their  own  country.  The  comity  thus  extended  to 
other  nations  is  no  impeachment  of  sovereignty.  It  is  the  volun- 
tary act  of  the  nation  by  which  it  is  offered,  and  is  inadmissible 
when  contrary  to  its  policy  or  prejudicial  to  its  interests." 


ILLEGAL,    CONTRACTS.  383 

Story  on  Conflict  of  Laws,  p.  35,  sec.  38,  says :  "In  the  silence 
of  any  positive  rule  .  .  .  courts  of  justice  presume  the  tacit  adop- 
tion of  them  (foreign  laws)  by  their  own  government,  unless  they 
are  repugnant  to  its  policy  or  prejudicial  to  its  own  interests." 

Many  other  authorities  to  the  same  effect  might  be  cited. 
Thrasher  v.  Everhart,  3  Gill  Johnson  (Md.),  244;  Pope  v.  Horke, 
155  111.,  617. 

There  is  a  difference  between  the  right  and  the  remedy.  The 
courts  will  look  to  the  lex  loci  contractus,  tp  construe  the  contract, 
but  will  not  look  there  for  the  remedy.  Bishop  on  Cont.,  sec.  1471 
(Enlarged  Ed.). 

We  are  now  to  the  question  whether  gaming,  betting  on  horse 
races,  etc.,  are  contrary  to  public  policy  and  injurious  to  the  in- 
terests of  the  citizens  of  the  State.     If  so,  as  we  have  said  above, 
it  is  not  obligatory  on  the  State  to  recognize,  nor  the  duty  of  the 
courts  to  enforce  such   forbidden  contracts.     The  statute    (Code, 
sec.  2841),  having  existed  in  force  nearly  a  century,  affords  preg- 
nant proof  that  our  Legislature  and  people  have  considered  that 
the  acts  prohibited  would  be  dangerous  to  the  public  policy  and 
interest  of  the  State.     "The  vice  aimed  at  is  not  only  injurious  to 
the  person  who  games,  but  wastes  his  property  to  the  injury  of 
those  dependent  on  him,  or  who  are  to  succeed  him.     It  has  its 
more  public  aspect,  for  if  it  be  announced  that  a  trustee  has  been 
false  to  his  trust,  or  a  public  officer  has  embezzled  public  funds, 
by  common  consent  the  first  inquiry  is  whether  the  defaulter  has 
been  wasting  his  property  in  gambling."     Flagg  v.  Baldwin,  38  N. 
J.  Eq.,  219.     The  habit  of  gaming  and  betting  is  very  seductive, 
and  when  indulged  in  seems  to  seriously  disturb  the  reason  and 
prudence  of  the  actors.  We  know  as  public  information  that  many 
dealers   in    speculative    stocks    depending   on    future    contingencies 
have  found  rest  in  insane  asylums,  leaving  helpless  families  behind 
to  be  cared  for  by  the  State.     In  the  case  before  us  the  charm  for 
betting  induced  the  defendant  to  give  his  note  expressly  "without 
offset,"  and  without  the  "benefit  of  exemptions."     We  do  not  feel 
it  to  be  our  duty  to  enforce  contracts   fraught  with  such  conse- 
quences and  expressly  forbidden  by  our  own  State  law  and  policy, 
in  deference  to  the  presumed  law  of  the  lex  loci,  recognizing  such 
contracts  as  valid.     By  the  common  law  contracts  of  wager  were 
not  considered  objectionable.     When,  however,  the  subject  tended 
to  encourage  acts  contrary  to  sound  morals,  the  courts  refused  to 
enforce  such  contract.     Gilber  v.  Sykes,  16  East,  150.     And  when 
the  act  was  against  public  policy  or  public  duty  the  court  withheld 
its  hand.     Atherford  v.  Beard/ 2  T.  R.,  610. 

The  case  of  Flagg  v.  Baldwin,  supra,  is  one  in  point.     The  con- 
tract for  speculation  in  stocks  upon  margins  was  executed  in  the 


384  FORMATION    OF    CONTRACT. 

State  of  New  York,  where  it  was  presumed  to  be  lawful  and  en- 
forceable, and  it  was  sought  to  be  enforced  in  the  courts  of  the 
State  of  New  Jersey.  The  statute  in  the  latter  State  is  in  sub- 
stance and  almost  verbatim  the  same  as  ours.  The  subject  is  thor- 
oughly and  ably  considered  in  the  opinion,  and  it  was  held  that 
such  contracts  could  not  be  enforced  in  New  Jersey,  because  it 
would  violate  the  plain  public  policy  of  the  State  on  the  subject  of 
gambling  and  betting,  and  the  court  said:  "In  this  respect,  such 
contracts  are  excepted  from  the  rule  of  comity  which  requires  the 
enforcement  by  the  courts  of  one  State  of  contracts  made  in  an- 
other, if  valid  by  the  lex  loci  contractus."  Such  contracts  as  we 
have  before  us  are  unlawful  and  void,  and  are  beyond  the  protec- 
tion of  the  law  or  the  right  of  appeal  to  courts  of  justice.  This 
court  respects  the  usury  laws  of  other  States,  but  there  is  no  like- 
ness between  our  statutes  forbidding  usury  and  gaming,  betting, 
etc.  The  former  only  affects  the  individual,  for  his  benefit  and 
protection,  and  the  statute  does  not  avoid  the  contract,  but  only 
forfeits  the  interest. 

We  have  examined  the  case  of  Scott  v.  Duffy,  14  Pa.  St.  Rep., 
18,  and  find  it  does  not  apply  here.  The  defendant  in  error  loaned 
the  plaintiff  money  in  Jersey  to  bet  on  an  election  and  he  recovered 
it  in  a  Pennsylvania  court.  The  court  said  the  loan  did  not  arise 
out  of  the  bet  or  any  bet,  nor  to  carry  any  specific  bet  into  execu- 
tion. The  loan  was  independent  of  and  before  any  bet  was  made. 
The  lender  neither  played  nor  bet.  Honor  and  good  faith  re- 
quired that  it  should  be  repaid,  and  it  did  not  appear  that  any 
statute  in  either  State  prevented  it.  Affirmed. 

See  Revisal,  1687.  In  the  early  reports  are  several  cases  in  which  such 
contracts  were  held  to  be  valid,  as  in  1 — 29,  521,  545,  553;  2—502;  3 — 
161,  171,  178,  354.  362,  403;  4—107,  250;  5—22,  33,  37,  137;  6—26,  117.  In 
accord  with  the  principal  case,  Warden  v.  Plummer,  40—524:  Teague  v. 
Perrv,  64—39;  Calvert  v.  Williams,  64—168.  What  is  a  game  of  chance 
is  discussed  by  Ruffin,  C.  J.,  in  State  v.  Gupton,  30—271,  in  which  it  is 
held  that  "tenpins"  is  not  a  game  of  chance  so  as  to  be  indictable,  but  a 
contract  based  upon  such  gaming  would  be  void.  See  also  State  v.  King, 
113—631.  "Raffling"  a  turkey  is  a  game  of  chance,  but  "shooting"  for 
one  is  not.  neither  is  "progressive  euchre."  State  v.  Deboy,  117 — 702. 
Betting  on  such  games  would  probably  be  within  the  statute.  See  Re- 
visal, 3715. 

"Bohemian  oats"  contracts,  in  which  the  seller  agreed  to  sell  a  certain 
number  of  bushels  for  the  purchaser  at  an  exorbitant  price,  was  held  to 
be  void  as  a  gambling  contract,  or  as  tending  to  defraud  some  one.  15 
Am.  &  Eng.  Encvc,  944,  and  note;  14  Ibid.,  615;  McNamara  v.  Gargett, 
68  Mich.,  454,  36  N.  W.,  218,  13  A.  S.  R.,  355;  Schmueckle  v.  Waters,  125 
Ind.,  265,  25  N.  E.,  281. 

On  gambling  contracts  generally,  see  14  Am.  &  Eng.  Encyc,  581  et  seq.; 
Clark  Cont.,  275 ;  1  Page  Cont.,  sees.  448-454 ;  Da  Costa  v.  Jones,  Cowper.  729. 
12  E.  R.  C,  377;  Bernard  v.  Tavlor,  23  Ore..  416.  37  A.  S.  R..  701.  18  L.  R. 
A.,  861 ;  20  Cyc,  921 ;  6  R.  C.  L.,  775. 


ILLEGAL    CONTRACTS.  385 


2.    INSURANCE    CONTRACTS. 


(152)  BURBAGE  v.  WINDLEY, 

108  N.  C,  357,  12  S.  E.,  839,  12  L.  R.  A.,  409-1891. 

Civil  action  to  recover  the  sum  of  $500  on  an  insurance  con- 
tract. The  defendant  appealed  from  a  judgment  in  the  court  be- 
low, and  in  this  court  moved  to  dismiss  the  action  on  the  ground 
that  the  complaint  does  not  state  a  cause  of  action. 

Merrimon,  C.  J.  In  this  and  like  actions  where  the  contract 
or  promise  sued  upon  is  by  parol,  a  sufficient  consideration  should 
be  alleged  in  the  complaint  to  support  the  contract  or  promise. 
This  is  essential,  because  otherwise  no  cause  of  action  is  alleged  or 
appears  in  the  pleadings.  In  some  cases — such  as  where  the  cause 
of  action  is  a  bill  of  exchange  or  a  promissory  note,  and  some 
other  legal  liabilities — the  mere  statement  of  the  liability  which 
constitutes  the  consideration  is  sufficient.  In  these  cases  the  nature 
of  the  liability  itself  sued  upon  implies  the  consideration  ;  but  in 
all  other  cases  of  simple  contract  it  is  necessary  that  the  complaint 
should  disclose  a  sufficient  valuable  consideration,  whatever  that 
may  be.  Moreover,  the  consideration  alleged  must  be  lawful  and 
not  in  its  nature,  because  of  some  tainting  or  vitiating  quality  in 
it,  void.  Moore  v.  Hobbs,  79  N.  C,  535;  Burnett  v.  Besso,  4 
John.,  235  ;  1  Chitty  PL,  294. 

There  are  cases  where  a  cause  of  action  is  imperfectly  alleged 
in  the  complaint;  this  pleading  may  be  helped  by  admissions  in 
the  answer,  but  this  is  not  one  of  them.  Indeed,  there  is  no  ad- 
mission in  the  answer  that,  in  any  view  of  the  allegations  of  the 
complaint,  would  help  them  at  all.  Hence,  it  appears  from  the 
complaint  itself — the  allegations  of  the  supposed  cause  of  action — 
that  the  only  consideration  alleged  or  relied  upon  is,  as  we  shall 
presently  see,  unlawful  and  void  as  such.  In  other  words,  it  ap- 
pears from  the  complaint  that  there  is  no  consideration  to  support 
the  promise  to  pay  the  sum  of  money  for  which  the  plaintiffs  de- 
manded judgment. 

The  complaint  itself  discloses  the  material  facts  that  R.  C. 
Windley,  the  testator  of  defendants,  in  his  lifetime,  procured  three 
policies  of  insurance,  each  purporting  to  insure  the  life  of  John 
W.  Hammond,  the  former  husband  of  the  feme  plaintiff,  for  a 
sum  of  money  specified  therein,  the  three  sums  aggregating  $10,000 
— Windley,  in  consideration  of  permission  given  him  by  Hammond 
to  so  insure  the  latter's  life,  agreeing  to  pay  of  the  money  he 
might  realize  from  such  insurance  $500  to  the  feme  plaintiff.  It 
is  not  alleged  that  Windley  had  any  insurable  interest  in  the  life 


386  FORMATION    OF    CONTRACT. 

of  Hammond.  On  the  contrary,  it  appears  by  implication,  if  this 
is  not  expressly  alleged,  that  he  had  none.  It  is  alleged  "that  the 
consideration,  and  the  only  consideration,  which  induced  and 
moved  the  said  John  W.  Hammond  to  permit  Mr.  Windley  to 
have  his  life  insured,  was  that  the  said  Windley  contracted  and 
agreed  with  said  John  W.  Hammond  and  his  wife,  Sarah  E. 
Hammond  that  out  of  the  money  which  the  said  Windley  would 
collect  on  these  policies  and  certificates  of  insurance  upon  the  life 
of  said  Hammond  after  his,  the  said  Hammond's  death,  he,  Wind- 
ley,  would  pay  to  Sarah  E.  Hammond  Burbage,  the  sum  of  $500." 

It  thus  clearly  appears  that  the  purpose  of  Windley,  with  the 
knowledge,  consent  and  cooperation  of  Hammond,  was  to  insure 
the  latter's  life,  in  which  he  had  no  insurable  interest,  for  his  own 
benefit.  He  simply  promised  to  pay  the  feme  plaintiff  of  the 
money  he  might  realize  after  the  death  of  her  husband  $500,  ex- 
pecting to  realize  $9,500  for  himself,  less  such  premiums  on  the 
insurance  as  he  might  pay. 

As  the  assured  had  no  insurable  interest  in  the  life  of  the  cestui 
que  vie,  the  contract  was  simply  a  wager — it  was  not  founded 
upon  any  just  and  lawful  consideration — it  was  a  mere  gambling 
speculation.  The  assured  was  not  to  be  indemnified  against  loss, 
injury  or  disadvantage  in  any  respect  growing  out  of  the  life  he 
insured ;  the  insurance  was  not  intended  to  serve  any  legitimate 
business  purpose  or  end — it  was  purely  a  matter  of  speculation 
founded  upon  nothing  but  hazard. 

Such  contracts  and  speculations  are  wholly  unnecessary;  they 
can  not  serve  or  promote  any  useful  and  wholesome  purposes  of 
individuals,  society  or  government.  They  do  not  stimulate,  pro- 
mote or  encourage  industry,  enterprise,  legitimate  business,  sound 
morality,  or  increase  the  wealth  of  the  people  or  the  strength  and 
power  of  the  State.  On  the  contrary,  their  nature  and  uniform 
experience  go  to  show  that  they  represent  nothing  substantial  or 
valuable,  or  of  practical  advantage  to  persons  or  communities. 
They  strongly  tend  to  demoralize  society  and  embarrass  industries 
and  general  business.  In  their  very  nature  they  stimulate,  afford 
incentives  to,  and  encourage  those  who  become  parties  to  them  to 
resort  to  sinister,  oftentimes  criminal,  means  to  turn  or  end  the 
hazard  in  their  favor,  and  thus  gain  unjust  and  dishonest  advan- 
tage. They  encourage  men  to  engage  in  the  business  of  specula- 
tion in  hazards  not  necessary  nor  useful  in  the  general  purposes 
and  business  of  life,  but  which  is  positively  and  seriously  injurious 
to  them.  Such  contracts  and  speculations  contravene  the  justice 
and  policy  of  the  law — they  are  contra  bonos  mores,  and  are  there- 
fore void. 

While  there  is  no  decision  of  this  court  directly  in  point  here,  it 


ILLEGAL,    CONTRACTS.  387 

is  well  settled  by  a  multitude  of  uniform  decisions  that  all  con- 
tracts against  the  policy  of  the  law,  and  such  as  contravene  sound 
morality,  are  on  such  account  void.  We  cite  a  few  of  many  cases. 
Sharp  v.  Farmer,  20  N.  C,  255 ;  Blythe  v.  Lovinggood,  24  N.  C, 
20;  Ingram  v.  Ingram,  49  N.  C,  188;  King  v.  Winants,  71  N.  C. 
469;  Williams  v.  Carr,  80  N.  C,  295;  Griffin  v.  Hasty,  94  N.  C, 
438. 

In  Shepherd  v.  Sawyer,  6  N.  C,  26,  the  court  held  that  when 
"A  agrees  with  B  for  2l/z  percent  premium  paid  down  to  insure  a 
negro  slave  reported  to  be  lost  in  Pasquotank  River;  B  has  no  in- 
terest in  the  negro,  yet  his  loss  being  proved,  B  is  entitled  to  re- 
cover his  value."  This  decision  is  placed  upon  the  ground  that  it 
was  an  "innocent  wager,"  and  that  such  wagers  were  sanctioned 
by  the  common  law.  The  opinion  of  the  court  is  very  brief,  and 
no  authority  is  cited  to  show  that  it  was  "innocent,"  nor  is  any 
reason  stated  why  it  was  such  wager.  If  the  court  intended  that 
the  case  should  have  general  application  to  wagers  in  insurance, 
embracing  cases  like  the  present  one,  we  can  not  hesitate  to  say, 
in  the  absence  of  reasons  stated  in  support  of  it,  that,  in  our  judg- 
ment, it  is  not  sustained  by  the  greater  weight  of  reason  or  the 
greater  weight  of  authority,  certainly  at  the  present  day.  Ruse  v. 
Ins.  Co.,  23  N.  Y.,  516;  Lord  v.  Dall,  12  Mass.,  115;  Ins.  Co.  v. 
Hazzard,  41  Ind.,  116;  Cormack  v.  Lewis,  15  Wall.,  643;  Ins. 
Co.  v.  France,  14  U.  S.,  561  ;  Womack  v.  Davis,  104  U.  S.,  775 ; 
Bliss  on  Ins.,  sec.  9. 

The  consideration  of  the  contract  or  promise  sued  upon  here,  as 
expressly  alleged,  was  the  permission  granted  to  the  testator  of  the 
defendant  by  the  former  husband  of  the  feme  plaintiff,  Hammond, 
to  insure  the  latter's  life.  If  such  permission,  in  any  case  or  con- 
nection, be  a  valuable  privilege  or  advantage,  in  this  case,  it  was 
granted  with  the  view  and  for  the  purpose  of  enabling  and  helping 
Windley  to  make  an  unlawful  contract — a  wager — on  the  life  of 
Hammond.  Thus  the  latter  became  connected  with  and  intended 
to  share  in  the  wagering  transaction.  The  promise  to  pay  $500 
to  the  feme  plaintiff  was  expressly  based  upon  and  grew  out  of  it ; 
it  was,  as  to  Hammond  and  his  wife,  part  of  it.  It  partook  of  the 
wager — the  vicious  nature  of  the  contract  of  insurance.  Such 
consideration  was,  therefore,  void.  Hence,  the  promise  founded 
upon  it  was  without  legal  sanction  and  of  no  binding  effect  in 
contemplation  of  law.  Ex  turpi  causa  non  oritur  actio.  Duke  v. 
Asbee,  33  N.  C.  112;  Bettis  v.  Reynolds,  34  N.  C,  344;  Coving- 
ton v.  Threadgill,  88  N.  C,  186;  Griffin  v.  Hasty,  94  N.  C,  438. 

If,  in  good  faith,  the  purpose  had  been  to  insure  the  life  of 
Hammond  for  the  benefit  of  his  wife,  the  case,  as  to  her,  might 
have  been  very  different.     But,  as  we  have  seen,  this  was  not  the 


388  FORMATION    OF    CONTRACT. 

purpose  or  any  part  of  it.  The  insurance  was  for  the  benefit  of 
Windley ;  the  policies  were  granted  to  and  made  payable  to  him ; 
he  promised  to  pay  the  small  sum  mentioned  to  the  feme  plaintiff 
for  permission  to  insure  the  life. 

As,  therefore,  it  appears  from  the  complaint  that  no  cause  of 
action  is  alleged,  the  motion  to  dismiss  the  action  must  be  allowed. 

Dismissed. 

Such  a  contract  will  not  be  sustained,  though  made  for  a  benevolent 
object.  College  v.  Ins.  Co.,  113—245.  "Insurable  interest"  is  where  there 
are  ties  of  blood  or  marriage,  or  the  existence  of  some  contract  relation, 
the  fulfillment  of  which  death  would  prevent.  Ibid.  Hinton  v.  Ins.  Co., 
135—314.  In  Albert  v.  Ins.  Co.,  122—92,  the  beneficiary  had  no  insurable 
interest,  but  the  insured  paid  the  premiums ;  Pollock  v.  Household  of  Ruth, 
150 — -211  :  Hardy  v.  Insurance  Co.,  152—286;  a  creditor  may  insure  the 
life  of  his  debtor,  Maynard  v.  Ins.  Co.,  132—711;  a  corporation  may  in- 
sure the  life  of  its  president,  Victor  v.  Mills,  148—107;  Victor  v.  Alanfg. 
Co.,  148—119;  Revisal,  1128,  amended  1909,  ch.  507;  in  Powell  v.  Dewey, 
123—103,  a  simple  partnership,  with  no  capital  invested  and  no  indebted- 
ness, did  not  give  one  an  insurable  interest  in  the  life  of  the  other.  An 
equitable  title  to  property  is  an  insurable  interest.  Grabbs  v.  Ins.  Co., 
125—389;  Clapp  v.  Ins.  Co.,  126—388;  Strause  v.  Ins.  Co.,  128—64;  Ger- 
ringer  v.   Ins.   Co.,   133 — 407. 

See  3  Am.  &  Eng.  Encvc,  929  et  scq.;  1  Page  Cont.,  sees.  383-394: 
Clark  Cont.,  277;  25  Cyc,  703;  6  R.  C  L.,  779. 

3.   DEALING   IN    FUTURES. 

(153)   GARSEED  v.  STERNBERGER, 

135  N.  C,  501,  47  S.  E.,  603—1904. 

Clark,  C.  J.  The  defendant,  desiring  to  engage  in  buying  cot- 
ton ''futures"  without  being  known,  requested  the  plaintiff  to  buy 
them  for  him  through  the  plaintiff's  own  brokers  in  New  York. 
Both  plaintiff  and  defendant  lived  in  Greensboro,  N.  C.  The  de- 
fendant agreed  to  furnish  all  the  money  necessary  for  these  trans- 
actions and  to  guarantee  the  plaintiff  against  loss.  Several  of 
these  transactions  occurred,  the  defendant  using  the  plaintiff's 
name  with  his  consent  and  the  orders  being  sent  direct  by  the  de- 
fendant to  the  plaintiff's  brokers.  After  several  such  transac- 
tions, in  this  particular  one  the  defendant  gave  the  plaintiff  a 
check  for  $500,  and  told  him  he  was  going  to  buy  500  bales  "June 
cotton."  The  defendant  sent  his  instruction  direct  to  the  plain- 
tiff's brokers.  There  was  a  loss  of  $626.28  on  this  contract  being 
closed  out,  which  the  New  York  brokers  charged  up  to  the  plain- 
tiff. The  plaintiff  thereupon  called  upon  the  defendant  to  reim- 
burse him  the  amount  ($126.28)  in  excess  of  the  sum  of  $500, 
which  had  been  handed  him  by  the  defendant.  The  defendant  did 
not,  after  the  loss,  request  the  plaintiff  to  pay  the  $126.28,  nor 
promise  after  such  loss  to  reimburse  the  plaintiff,  but,  on  the  con- 


ILLEGAL    CONTRACTS.  380 

trary,  denied  liability,  alleging  that  the  loss  was  caused  by  the 
failure  of  the  plaintiff's  brokers  to  obey  instructions.  The  plaintiff 
began  this  action  before  a  Justice  of  the  Peace  to  recover  the  said 
sum  of  $126.28  as  money  paid  to  defendant's  use.  The  defendant 
pleaded  that,  the  transaction  being  illegal,  the  plaintiff  could  not 
recover.  Upon  the  plaintiff's  testimony  as  above  the  defendant 
demurred  to  the  evidence.  The  court  sustained  the  demurrer  and 
dismissed  the  action.     In  this  there  was  no  error. 

In  Clark  on  Contracts,  501,  it  is  said:  "If  a  broker  or  other 
agent  is  employed  to  carry  out  an  illegal  transaction,  and  is  privy 
to  the  unlawful  design,  and  by  virtue  of  his  employment  performs 
services,  makes  disbursements,  suffers  losses,  or  incurs  liabilities, 
he  has  no  remedy  against  his  principal, — citing  Greenhood  Pub. 
Pol,  110  (where  the  cases  are  collected)  ;  Harvey  v.  Merrill,  150 
Mass.,  1,  5  L.  R.  A.,  200;  15  Am.  St.  Rep.,  159;  Gibbs  v.  Gas 
Co.,  130  U.  S.,  396,  and  numerous  other  cases;  saying  further: 
"Not  only  is  this  true,  but  it  has  been  held  that  any  express  prom- 
ise made  by  the  principal  to  reimburse  him  is  void,"  citing  Embrey 
v.  Jemison,  131  U.  S.,  336;  Kahn  v.  Walton,  46  Ohio  St.,  195; 
Everingham  v.  Meignan,  55  Wis.,  354,  which  sustain  the  text. 
But  if  there  could  be  any  doubt  on  this  proposition,  our  chapter 
221,  Laws  1889,  "to  suppress  and  prevent  certain  kinds  of  vicious 
contracts,"  puts  the  matter  beyond  controversy.  Section  1  is  very 
elaborate  and  forbids  all  classes  and  kinds  of  dealings  in  "future" 
contracts,  in  which,  as  in  this  case,  the  transaction  is  not  a  bona 
fide  purchase  of  commodities  for  actual  future  delivery,  but  con- 
templates a  payment  or  receipt  of  the  difference  in  the  price  at  the 
time  of  delivery  from  that  named  in  the  contract,  and  provides 
that  no  party  "or  agent  of  such  party,  directly  or  remotely  con- 
nected with  such  contract  in  any  way  whatever,  shall  have  or 
maintain  any  cause  of  action  on  account  of  any  money  or  other 
thing  of  value  paid,  advanced  or  hypothecated  by  him,  in  connec- 
tion with  or  on  account  of  such  contract  or  agency." 

Section  3  provides  that  every  person,  who  is  a  party  to  any  such 
contract,  "and  every  person  who  shall  be  the  agent,  directly  or  in- 
directly, of  any  such  person  in  making,  or  furthering,  or  effectuat- 
ing the  same  .  .  .  shall  be  deemed  guilty  of  a  misdemeanor,  and 
on  conviction  in  the  Superior  Court  shall  be  fined  not  less  than 
$100  nor  more  than  $500,  and  may  be  imprisoned,  in  the  discre- 
tion of  the  court."  And  section  4  visits  with  like  punishment 
every  person  who  in  this  State  shall  "do  any  act  or  aid  in  any 
way  in  this  State  in  the  making  or  furthering  such  a  contract  so 
made  in  another  State."  No  error. 

Revisal,  1689-1691,  3823-3826.  Where  A  lends  money  to  B  to  pay  losses 
incurred  by  speculating  in  futures,  he  can  not  recover  if  he  is  directly  or 
indirectly  connected   with   the   speculation.      Ballard   v.   Green,    118 — 390.      If 


390  FORMATION    OF    CONTRACT. 

the  real  meaning  of  the  contract  is  a  bet  on  the  price,  and  no  actual  sale 
or  purchase  is  intended,  the  contract  is  illegal ;  but  the  intent  must  be 
common  to  both  buyer  and  seller.  Williams  v.  Carr,  80—294;  Cantwell 
v.  Boykin,  127—64;  Rankin  v.  Mitchem,  141—282;  Burns  v.  Tomlinson, 
147 — 634,  645;  Edgerton  v.  Edgerton,  153—167;  Harvey  v.  Pettaway,  156— 
375;  Rodgers  v.  Bell,  156—378;  Sprunt  v.  May,  156—388;  Holt  v.  Wellons, 
163—124;   Burns  v.   Whitcover,   158—384;   Carpenter  v.   Hanes,   167—551. 

"Dealing  in  futures"  is  merely  speculation  on  the  rise  and  fall  of  prices. 
A  "bucket-shop"  is  an  establishment,  nominally  for  the  transaction  of 
stock  exchange  business,  or  business  of  similar  character,  but  really  for 
the  registration  of  bets  or  wagers,  usually  for  small  amounts,  on  the  rise 
and  fall  of  prices,  no  transfer  or  delivery  being  intended.  State  v.  Mc- 
Ginnas,   138—724;    State  v.   Clayton,   138—732. 

See  generally,  14  Am.  &  Eng.  Encyc,  604  et  seq.;  Clark  Cont.,  278; 
1  Page  Cont,  sees.  448-454;  Preston  v.  Cm.,  Col.  &  H.  V.  R.  R.,  36  Fed. 
54  1  L.  R.  A.,  140;  Duchemin  v.  Kendall,  149  Mass.,  171,  21  N.  E.,  242, 
3  L.  R.  A.,  784;  Crawford  v.  Spencer,  92  Mo.,  498,  1  A.  S.  R.,  753;  20 
Cyc,  926:  6  R.  C.  L.,  780. 

Lotteries  and  gift  enterprises.— Revisal,  3725,  3726,  3727.  A  lottery  is 
a  species  of  gambling  and  is  indictable.  State  v.  Bryant,  74—207;  defined 
in  State  v.  Lumsden,  89—572,  and  State  v.  Deboy,  117—702.  Gift  enter- 
prise, Winston  v.  Beeson,  135— p.  279.  14  Am.  &  Eng.  Encyc,  600-603, 
1005;  State  v.  Perry,  154—616;  State  v.  Lipkin,  —  N.  C,  — ,  84  S.  E., 
34Q/;  Minton  v.  Smith  Piano  Co.,  36  App.  D.  C,  137,  33  L.  R.  A.  (X.  S.), 
305;  6  R.  C.  L.,  779. 

Sec.  3.     Agreements  contrary  to  public  policy. 

1.  As  to  public  offices. 

(154)    BASKET  v.   MOSS, 

115  N.  C,  448,  20  S.  E.,  733,  44  A.  S.  R.,  463,  48  L.  R.  A.,  842-1894. 

Application  for  an  injunction  to  restrain  a  sale  under  a  mort- 
gage. The  defendant  was  postmaster  at  Henderson,  in  1893,  and 
■>  rm  would  expire  in  March,  1894.  The  plaintiff,  wanting  the 
office,  agreed  to  pay  the  defendant  the  sum  of  $972.50  to  resign  in 
his  favor  for  the  unexpired  term  and  to  go  to  Washington  and  in- 
duce the  President  to  appoint  the  plaintiff  to  this  office.  The  said 
sum  included  the  estimated  salary  and  clerk  hire  for  the  unex- 
pired term,  $160  for  expenses  to  Washington,  and  a  debt  of 
$37.50.  The  whole  was  evidenced  by  bond  secured  by  mortgage 
on  land.  The  plaintiff  did  not  get  the  office,  and  the  defendant  is 
preparing  to  sell  under  the  mortgage  to  pay  the  amount  for  ex- 
penses and  the  $37.50.  Jos.  B.,  a  coplaintiff,  also  claimed  an 
interest  in  the  land.  The  Judge  continued  the  restraining  order 
until  the  hearing,  and  the  defendant  appealed. 

Clark,  J.  The  public  has  a  right  to  some  better  test  of  the 
capacity  of  their  servants  than  the  fact  that  they  possess  the  means 
of  purchasing  their  offices.  The  Code,  sec.  1871,  provides,  "All 
bargains,  bonds  and  assurances  made  or  given  for  the  purchase  or 
sale  of  any  office  whatsoever,  the  sale  of  which  is  contrarv  to  law, 


ILLEGAL    CONTRACTS.  391 

shall  be  void."     Notwithstanding  the  office  is  an  office  under  the 
United  States  government,  if  an  action  were  brought  in  our  courts 
to  recover  upon  a  bond  or  mortgage  given  for  such  consideration, 
our  courts  would  hold  it  void.     Such  agreements  are  void  at  com- 
mon law,  as  well  as  by  statute.     So  also  contracts  to  procure  ap- 
pointments to  office  are  void  (Mechem  on  Public  Offices,  sec.  351)  ; 
or  to  resign  office  in  another's  favor.     Ibid.,  sec.  357;  Meachem  v. 
Dow,  32  Vt.,  721;  Gracone  v.  Wroughton,   11  Exch.,   146.     Pub- 
lic offices  are  public  trusts,  and  should  be  conferred  solely  upon 
considerations  of  ability,  integrity,  fidelity  and  fitness  for  the  posi- 
tion.    Agreements  for  compensation  to  procure  these  tend  directly 
and  necessarily  to  lower  the  character  of  the  appointments,  to  the 
great  detriment  of  the  public.     Hence,  such  agreements,  of  what- 
ever nature,  have  always  been  held  void  as  being  against  public 
policy.     Maguire  v.  Confine,  101   U.  S.,   108;  Tool  Co.  v.  Norris, 
2  Wall.,  45;  Gray  v.  Hook,  4  N.  Y.,  449;  Gaston  v.  Drake,  33  Am. 
Rep.,  548;  Filson  v.  Himes,  47  Am.  Dec,  422;  Faurie  v.  Morin, 
4  Martin   (La.),  39;  Uness  v.  Hessing,  92  Am.  Dec,  153.     Says 
Ames,  C.  J.,  in  Eddy  v.  Capron,  67  Am.  Dec,  541,  "By  the  theory 
of    our   government,    appointments   to    office   are   presumed    to   be 
made   solely   upon   the  principle   detur  digniori,  and  any   practice 
whereby  the  bare  consideration  of  money  is  brought  to  bear  in  any 
form  upon  such  appointments  to  or  resignation  of  office,  conflicts 
with  and  degrades  this  great   principle.     The  services   performed 
under  such  appointments  are  paid  for  by  salary  or  fees,  presumed 
to  be  adjusted  at  the  point  of  adequate  remuneration  only.     Any 
premium  paid  to  obtain  office  interferes  with  this  adjustment  and 
tempts  to  peculation,  overcharges  and  frauds  in  the  effort  to  restore 
the  balance  thus  disturbed."     Besides,  the  moral  sense  revolts  at 
traffic  to  any  extent  in  the  bestowal  of  public  office.     It  is  against 
good  morals  as  well  as  against  the  soundest  principles  of  public 
policy.     If  public  offices  can  be  sold  or  procured  for  money,  the 
purchasers  will  be  sure  to  reimburse  themselves  by  dispensing  the 
functions   of   their   offices    for   pecuniary   consideration.      The   law 
wisely  guards   against   the  first   step   in  that   direction.      For  that 
reason,  not  only  the  sum  agreed  to  be  paid  directly  to  the  holder 
of  this  office  to  resign,  but  the  amounts  advanced  for  expenses  and 
compensation  of  persons  to  go  to  Washington  to  procure  the  au- 
thorities there  to  accept  the  resignation  of  the  one  party  and  the 
appointment  of  the  other,  are  not  recoverable.     For  the  same  rea- 
son that  agreements  to  pay  for  lobbying  the  passage  of  bills  before 
a  legislative  body  are  void    ( Lawson  on  Contracts,  sec.  309,  and 
Mechem  on  Offices,  sec  360,  and  cases  cited),  all  agreements  for 
expenses  and  compensation  of  persons  seeking  to  influence  or  pro- 
cure  appointments   to   office   are   void.      Lawson,   supra,   sec   310: 


392  FORMATION    OF    CONTRACT. 

"The  courts  condemn  the  very  appearance  of  evil,  and  it  matters 
not  that  in  a  particular  case  nothing  improper  was  done  or  ex- 
pected to  be  done.  It  is  enough  that  the  employment  tends  di- 
rectly to  such  results."  Clippinger  v.  Hebaugh,  40  Am.  Dec,  519; 
Wood  v.  McCann,  6  Dana  (Ky.),  366;  Mills  v.  Mills,  100  Am. 
Dec,  535,  and  numerous  other  cases  cited  in  notes  to  Mechem  on 
Officers,  sec.  360;  Lawson,  supra,  sec.  311  and  cases  cited. 

If  an  action  had  been  brought  to  recover  these  sums  or  to  fore- 
close a  mortgage  given  to  secure  payment  thereof,  the  court  would 
dismiss  the  action.  The  defendant  contends,  however,  that  as  he 
was  careful  to  take  a  mortgage  with  a  power  of  sale,  the  courts 
will  not  interfere  by  injunction,  but  will  let  him  proceed  to  collect 
his  ill-gotten  gains.  This  would  simply  legalize  the  practice  which 
is  denounced  both  by  statute  and  common  law.  Reasons  of  public 
policy  forbidding  this  species  of  corruption  are  too  profound  and 
too  important  to  the  public  welfare  to  be  evaded  and  nullified  by 
so  simple  a  device.  A  mortgage  given  to  secure  a  sum  of  money 
upon  an  agreement  against  public  policy  is  void.  The  Code,  sec. 
1871;  Teal  v.  Walker,  111  U.  S.,  252;  Wildey  v.  Collier,  7  Md., 
275;  Crowder  v.  Reed,  80  Ind.,  1.  The  sale  under  a  void  mort- 
gage would  be  a  cloud  on  the  title,  and  an  injunction  lies,  espe- 
cially when  the  invalidity  does  not  appear  upon  the  face  of  the 
mortgage,  but  requires  extrinsic  evidence  to  prove  it.  1  High  on 
Injunc,  sec.  469 ;  Yager  v.  Murkle,  26  Minn.,  429.  In  cases  where 
the  consideration  is  immoral,  the  deed  will  be  set  aside.  2  Ad- 
dison Cont.,  716. 

Pomeroy  Eq.  Jur.,  sees.  939,  940,  941,  942,  calls  attention  to 
the  fact  that  the  rule  in  pari  delicto  is  often  misunderstood,  and 
its  application  is  properly  and  correctly  that  in  such  cases  "potior 
est  conditio  possidentis" — that  is,  that  the  court  will  permit  noth- 
ing to  be  done  which  will  enable  a  party  to  collect  from  the  other 
the  fruits  of  his  wrong.  When  he  sues  to  recover,  the  law  will  not 
give  him  judgment.  When  he  has  shrewdly  attempted  to  evade 
this  by  taking  a  mortgage  with  a  power  of  sale,  the  court  will  by 
injunction  prevent  his  collecting  on  a  mortgage  denounced  as  void 
by  reasons  of  public  policy.  In  sec.  941  he  says:  "Whenever 
public  policy  is  considered  as  advanced  by  allowing  either  party 
to  sue  for  relief  against  the  transaction,  then,  relief  is  given  to 
him.  In  pursuance  of  this  high  principle,  and  in  compliance  with 
the  demands  of  a  high  public  policy,  equity  may  aid  a  party 
equally  guilty  with  his  opponent,  not  only  by  canceling  and  order- 
ing the  surrender  of  an  executory  agreement,  but  even  by  setting 
aside  an  executed  contract,  conveyance  or  transfer,  and  decree  the 
recovery  back  of  money  paid  or  property  delivered  in  performance 
of  the  agreement."     Also,  in   section  940,  he  says  that  whenever 


ILLEGAL    CONTRACTS. 


393 


the  defensive  remedy  at  law  will  not  be  equally  certain,  perfect 
and  adequate,  the  equitable  remedy  will  be  granted  by  injunction 
and  the  like.  "The  equitable  relief  so  conferred  does  not  violate 
the  general  maxim  concerning  parties  in  pari  delicto;  on  the  con- 
trary, it  carries  that  maxim  into  effect."  So  in  the  present  case, 
the  injunction  against  sale  under  the  void  mortgage  taken  against 
public  policy,  enforces  that  maxim  by  prosecuting  [preventing] 
either  party  recovering  anything  from  the  other.  This  is  also  the 
well-settled  rule  in  England.  In  Lloyd  v.  Gordon,  2  Swan,  181, 
Lord  Eldon  granted  an  injunction  to  restrain  the  negotiation  of 
bills  of  exchange  which  were  made  void  by  statute,  9  Anne,  c.  14, 
which  is  in  the  very  tenor  of  sec.  1871  of  The  Code,  applicable  to 
the  present  transaction.  Lord  Hardwicke  granted  the  injunctive 
relief  in  a  similar  case,  Smith  v.  Aykwell,  3  Atkins,  566,  and  the 
Vice-Chancellor  in  Earl  of  Milltown  v.  Stewart,  3  Simons,  371, 
which  was  affirmed  by  Lord  Cottenham,  3  M.  and  C,   18. 

In  such  case,  before  the  Master  of  the  Rolls,  Sir  John  Romilly, 
where  part  of  the  consideration  was  for  money  loaned,  and  part 
was  for  an  immoral  consideration,  the  whole  mortgage  was  ordered 
to  be  canceled,  the  court  declining  to  pass  upon  the  question 
whether  the  mortgagee  could  recover  at  law  for  the  valid  part  of 
the  consideration — i.  e.,  the  money  loaned.  Willyams  v.  Bullmore, 
33  L.  J.  R.  (Eq.),  N.  S.,  461.  In  the  present  case,  upon  the 
defendant's  own  showing,  $37.50  is  the  only  valid  part  of  the  sum 
attempted  to  be  secured.  Whether  the  mortgage  can  be  upheld 
to  that  extent  is  not  before  us,  as  the  plaintiff  in  his  reply  ex- 
presses his  willingness  to  pay  said  sum.  The  plaintiff  recovering 
judgment  for  the  cancellation  of  the  mortgage,  the  defendant 
should  be  taxed  with  the  costs.  The  injunction  was  properly  con- 
tinued to  the  hearing.  Affirmed. 

Shepherd,  C.  J.,  files  a  concurring  opinion  in  the  result,  but 
holds  that  the  plaintiff,  mortgagor,  is  in  pari  delicto. 

A  sheriff  or  clerk  may  appoint  a  deputy,  but  can  not  "farm  out"  his 
office  or  any  portion  of  it.  Cansler  v.  Penland,  125—578,  126—793;  Haral- 
son v.  Dickens,  4—163.  Revisal,  2366,  3571:  15  Am.  &  Eng.  Encyc.. 
964-968:  1  Page  Cont.,  sees.  410,  411,  412:  9  Cyc,  495:  Clark  Cont.,  282 
et  scq. :  16  A.  D.,  506,  note ;  6  R.  C.  L..  736. 

Pensions.— An  agreement  by  a  widow,  entitled  to  a  pension,  to  pay  an 
agent  part  of  it  for  trouble  in  getting  it,  is  void,  being  prohibited  by 
statute  1848.  Powell  v.  Jennings,  48—547:  Mosby  v.  Hunter,  31 — 119;  ?o 
an  assignment  of  a  pension  before  due  is  void.  Gill  v.  Dixon,  131  87. 
See  also  22  Am.  &  Eng.  Encyc,  664,  669. 


394  FORMATION    OF    CONTRACT. 

(155)    KING  v.  RAILROAD, 

147   N.   C,  263,  60   S.   E.,    1133—1908. 

The  plaintiff  was  the  editor  of  a  newspaper,  and  the  defendant 
company  was  trying  to  secure  aid  in  building  a  line  of  railroad ; 
an  agreement  was  made  between  the  plaintiff  and  the  defendant 
that  the  plaintiff  should  use  the  columns  of  his  paper  to  promote 
the  carrying  of  elections  along  the  proposed  route,  and  that  he 
should  be  "taken  care  of,"  and  well  paid  for  his  service;  the  plain- 
tiff performed  his  part  of  the  contract  by  publishing  advertise- 
ments, editorials,  etc.,  and  by  personal  services  at  elections ;  the 
defendant  refused  to  pay,  and  plaintiff  brought  suit.  The  action 
was  dismissed,  and  plaintiff  appealed.  Affirmed. 

Clark,  C.  J.  .  .  .  When  an  advertisement  is  inserted  the  public 
knows  that  it  is  paid  for,  that  it  speaks  for  the  advertiser  and 
that  the  representations  are  made  by  him  and  not  by  the  editor. 
But  an  editorial  is  understood  to  express  the  true  and  unbought 
views  of  the  editor.  It  is  because  of  that  fact  that  they  carry 
any  weight  with  the  public.  It  was  precisely  because  of  such 
weight  that  the  defendant  thought  it  worth  money  to  buy  the  use 
of  plaintiff's  editorial  columns.  Had  the  plaintiff  informed  the 
public  that  he  had  sold  his  editorial  columns  to  the  railroad  com- 
pany, his  editorials  would  have  had  no  weight  whatever  in  induc- 
ing the  citizens  to  vote  a  bond  issue  on  themselves  in  favor  of  the 
railroad.  Both  parties  knew  this.  Both  are  at  fault.  Public  pol- 
icy will  not  permit  the  courts  to  enforce  a  contract  based  upon  an 
immoral  consideration,  but  will  leave  the  parties  to  their  own  de- 
vices. Basket  v.  Moss,  115  N.  C,  448,  44  A.  S.  R.,  463,  48  L. 
R.  A.,  842;  Burbage  v.  Windley,  108  N.  C,  357,  12  L.  R.  A., 
409,  and  many  other  cases  cited,  135  N.  C,  at  pp.  733,  734. 
Neither  the  sale  of  editorial  columns  nor  services  for  carrying  an 
election  are  recognizable  in  a  court  of  justice  as  ground  of  action 
for  a  recovery  of  compensation. 

Contracts,  for  money  or  personal  profit,  to  use  efforts  and  influ- 
ence to  "carry  an  election,"  especially  an  election  of  this  character, 
are  contra  bonos  mores.  9  Cyc,  500;  Wilson  v.  Puryear,  12  Ky., 
556;  15  A.  &  K.,  984;  Dean  v.  Clark,  80  Hun,  80.  In  Trist  v. 
Child,  88  U.  S.,  449,  there  is  citation  of  numerous  authorities 
which  have  refused  to  uphold  contracts  alleged  in  the  complaint, 
because  they  are  held  to  be  against  the  policy  of  the  law  and  the 
theory  upon  which  the  government  of  this  republic  is  founded. 

The  plaintiff  in  this  case  was  the  editor  of  a  paper  and  is  seek- 
ing to  recover  for  sale  of  his  editorial  influence  and  for  other  al- 
leged  services    in   carrying  an    election   to   issue   bonds.      Certainly 


ILLEGAL    CONTRACTS.  395 

this  was  as  much  against  public  policy  as  an  agreement  for  a  con- 
sideration not  to  bid  on  articles  to  be  sold  by  the  government,  or 
an  agreement  to  pay  for  a  contract  to  carry  the  mail,  or  an  agree- 
ment to  pay  for  procuring  signatures  to  a  pardon  to  be  presented 
to  the  Governor,  or  an  agreement  not  to  bid  at  a  sale  made  under 
the  judicial  order,  or  an  agreement  to  pay  for  promoting  a  mar- 
riage; because  in  each  of  the  several  instances  mentioned,  which 
have  all  been  held  to  be  invalid  by  reason  of  public  policy,  the 
interests  affected  are  private  and  largely  bear  upon  individuals 
rather  than  upon  a  community,  while  in  this  case  the  interests 
affected  are  public  and  bear,  if  the  burden  should  be  placed,  upon 
the  whole  community. 

There  are  other  services  mentioned  in  the  complaint,  but  they 
are  all  stated  in  the  same  cause  of  action  and  so  mixed  up  with 
it  as  to  poison  the  whole.  Trist  v.  Child,  88  U.  S.,  441.  It  is 
probable  that  the  whole  employment  was  based  upon  the  influence 
of  the  newspaper  and  its  editorials.  Certainly  the  defendant's 
demurrer  ore  touts  to  the  action  should  have  been  sustained  be- 
low, and  it  must  be  sustained  here. 

Lobbying  contracts. — -All  contracts  for  legitimate  professional  services 
for  a  fixed  compensation  are  enforced,  while  those  for  a  contingent  fee 
or  which  require  personal  influence,  personal  solicitation,  or  any  trickery 
or  underhand  means  to  secure  legislation,  are  void.  30  L.  R.  A.,  737 ; 
33  L.  R.  A..  166;  42  L.  R.  A.,  347;  48  L.  R.  A.,  294;  62  L.  R.  A..  362;  Clark- 
Cont.  285;  15  Am.  &  Eng.  Encvc,  969;  9  Cyc,  486;  1  Page  Cont.,  sees. 
327-334;  6  R.  C.  L.,  730. 

Elections. — A  person  who  before  or  on  the  day  of  election  furnished 
liquor,  with  the  belief  that  it  was  to  be  used  to  influence  the  electors,  can 
not  recover  for  the  price.  Duke  v.  Asbee,  33 — 112.  See  Revisal,  3386, 
3387,  3389.  A  note  given  for  money  lost  on  an  election  bet  is  void,  even 
though  neither  partv  was  a  voter.  Bettis  v.  Revnolds,  34 — 344.  Revisal, 
3384. 

See  generallv,  1  Page  Cont.,  sees.  409,  413,  414:  15  Am.  &  Eng.  Encyc, 
983. 

2.  Municipal  and  other  corporations   owing  a  duty  to  the  public. 

(156)   EDWARDS  v.  GOLDSBORO, 

141  N.  C.  60.  53  S.  E.,  652,  4  L.  R.  A.   (N.  S.),  589,  8  Ann.  Cas.,  479-1906. 

Civil  action  for  money  paid.  The  city  of  Goldsboro  was  au- 
thorized to  build  a  city  hall  and  a  markethouse,  and  the  plaintiff 
paid  the  sum  of  $600  for  the  purpose  of  having  the  said  buildings 
located  near  his  property,  to  enhance  the  value  of  the  same ;  the 
defendant  built  the  city  hall  as  agreed,  but  refused  to  erect  the 
markethouse,  and  plaintiff  brought  this  action  to  recover  the 
money  paid.  It  appeared  that  the  plaintiff's  property  was  en- 
hanced to  the  amount  paid.  There  was  a  judgment  for  the  de- 
fendant, and  plaintiff  appealed. 


396  FORMATION    OF    CONTRACT. 

Walker,  J.  (After  discussing  the  preliminary  questions  as  to 
issues  submitted)  : 

The  case  naturally  resolves  itself  into  two  questions,  which  re- 
quire discussion :  First,  was  the  contract  against  public  policy,  or 
based  upon  an  illegal  consideration,  and  therefore  void?  Second, 
the  plaintiff  being  a  party  to  the  illegal  transaction,  if  it  was  il- 
legal, is  he  in  a  position  to  ask  for  a  return  of  the  money,  or  is 
he  debarred  of  a  recovery,  being  in  pari  delicto ? 

The  statute  provides  that  the  authorities  of  a  town,  whether 
commissioners  or  aldermen,  shall  make  such  orders  for  the  dispo- 
sition or  use  of  its  property  as  the  interest  of  the  town  may  re- 
quire. Revisal,  sec.  2916.  Judge  Dillon,  referring  to  the  general 
duty  of  municipal  officers,  with  respect  to  the  affairs  which  they 
have  in  charge,  says:  "Powers  are  conferred  upon  municipal  cor- 
porations for  public  purposes  ;  and  as  their  legislative  powers  can 
not,  as  we  have  just  seen,  be  delegated,  so  they  can  not  without 
legislative  authority,  express  or  implied,  be  bargained  or  bartered 
away.  Such  corporations  may  make  authorized  contracts,  but 
they  have  no  power,  as  a  party,  to  make  contracts  or  pass  bylaws 
which  shall  cede  away,  control,  or  embarrass  their  legislative  or 
governmental  powers,  or  which  shall  disable  them  from  perform- 
ing their  public  duties.  The  cases  cited  mark  the  scope  and  illus- 
trate the  application  of  this  salutary  principle  in  a  great  variety 
of  circumstances,  and,  for  the  protection  of  the  citizen,  it  is  of  the 
first  importance  that  it  shall  be  maintained  by  the  courts  in  its 
full  extent  and  vigor."  I  Dillon  Mun.  Corp.  (4  Ed.),  sec.  97. 
It  will  be  seen,  therefore,  that  public  office  in  a  city  is  a  public 
trust  to  be  administered  for  the  equal  benefit  and  advantage  of 
all  the  citizens  of  the  municipality,  and  the  governing  body  will 
not  be  permitted  to  contract  at  any  time  so  as  to  deprive  itself  of 
the  free  exercise  of  its  judgment  and  discretion  in  providing  for 
what  may  afterwards  turn  out  to  be  the  best  interest  of  all  citi- 
zens alike,  and  especially  will  it  not  be  allowed  by  an  obligatory 
agreement  to  discriminate  in  favor  of  one  citizen  or  class  of  citi- 
zens as  against  another  entitled  to  equality  of  privilege  and  benefit, 
even  for  a  valuable  consideration.  It  must  at  all  times  retain 
freedom  of  judgment,  so  that  its  decisions  will  be  influenced  only 
by  a  regard  for  the  public  welfare.  We  take  it  that  any  contract 
by  which  it  should  be  attempted  to  prevent  the  city  authorities 
from  deciding  impartially  on  a  matter  affecting  the  general  wel- 
fare would  be  unenforceable.  If  public  trustees  or  officers  may  by 
contract  divest  themselves  of  any  portion  of  the  essential  powers 
entrusted  to  them,  they  may  just  as  well  alienate  all  of  them, 
though  by  degrees,  and  thus  eventually  abdicate  the  exercise  of 
every  governmental  function.     Such  agreements  are  therefore  con- 


ILLEGAL    CONTRACTS.  397 

trary   to   the  true  principles   upon   which   society   is    founded   and 
subversive  of   all  well-regulated  government.     These  propositions 
would   seem   to   be   self-evident.      "All   agreements    for   pecuniary 
considerations,   to  control  the  business  operations  of   the  govern- 
ment, or  the  regular  administration  of  justice,  or  the  appointment 
to  public  offices,  or  the  ordinary  course  of  legislation,  are  void  as 
against   public   policy,   without   reference   to  the  question   whether 
improper  means  are  contemplated  or  used  in  their  execution.     The 
law  looks  to  the  general  tendency  of  such  agreements,  and  it  closes 
the  door  to  temptation  by  refusing  them  recognition  in  any  of  the 
courts  of  the  country."     Tool  Co.  v.  Norris,  2  Wall.,  45 ;  Cameron 
v.   McFarland,  4  N.  C,  299;  Wharton  on  Cont.,  sec.  403.     The 
leading  case  of  Martin  v.  Mayor,  1   Hill   (N.  Y.),  546,  is  one  in 
which  the  principle  was  applied  and  where  it  appeared  that  for  a 
consideration,  public  trustees  agreed  with  a  lot  owner  to  make  cer- 
tain improvements  which  they  refused  to  do.     The  court  held  that 
they  might   decline  to  go   forward   with   the  improvement   on   the 
ground  that  it  was  injurious  or  unprofitable  to  the  public,  and  that 
in  this  respect  they  enjoyed  a  discretion  which  individuals  have  no 
power  to  control  and  the  trustees  no  power  to  part  with.     It  was 
further  said:     "To  allow  that  commissioners  of  streets  and  high- 
ways may  bind  themselves   by  contract  to   subserve  the   interests 
of  individuals,  would  be  a  clear  violation  of  public  policy.     They 
are  officers  of  municipal  corporations  or  quasi  corporations,  and  in 
respect  to  the  laying  out   of   streets   and   highways   are  primarily 
bound  to  consult  the  interests  of  the  community  at  large."    The  doc- 
trine there  enforced  was  that  a  contract  will  not  be  sustained  which 
tends  to  restrain  or  control  the  judgment  of  public  officers,  which 
must  always  be  impartial.     But  all  promises  of  individuals  to  pay 
a  portion  of  the  expenses  of  public  improvements  do  not  neces- 
sarily fall  within  the  principle  and  may  not  be  void.     The  validity 
of  the  particular  contract  will  depend,  of  course,  upon  whether  it 
has  the  evil  tendency  to  influence  the  officer  in  the  discharge  of 
his  public  duty  by  trammeling  his  judgment  in  matters  about  which 
he  should  be  left  free  to  act  as  the  public  interest  alone  may  dic- 
tate or  require.     This   is  the  vitiating  element,  and  if  the  agree- 
ment has  that  tendency  in  the  eye  of  the  law,  it  makes  no  differ- 
ence what  is  the  actual  motive  in  the  particular  instance  or  how 
pure  it  may  be.     (The  decision  here  cites  and  quotes  from  W.  S. 
E.  Society  v.  Philadelphia,  31  Pa.  St.,  175;  Gale  v.  Kalamazoo,  23 
Mich.,  344.  Cooley,  C.   L ;  Fuller  v.  Dame,  35  Mass.,  372;  Inger- 
soll  on  Pub.  Corp.,  310;  2  Dillon  Mun.  Corp.    (4  Ed.),  sec.  685; 
Louisville   Citv  Railway   v.   Louisville,   71    Ky.,   417;   Gas    Co.    v. 
Cohimbus.  5  Ohio  St..  65 :  New  Haven  v.  R.  R.,  62  Conn.,  257: 
Indianapolis   v.   Gas   Co..  66   Ind.,   404:   McKeesport   v.   R.   R.,   2 


398  FORMATION    OF    CONTRACT. 

Penn.  Sup.,  242;  Milhau  v.  Sharp,  27  N.  Y.,  611;  Matthews  v. 
Alexander,  68  Mo.,  119;  Mayor  v.  Bowman,  39  Miss.,  682.)  The 
question  has  frequently  arisen  in  the  establishment  of  railroad 
depots.  Railway  companies  are  quasi  public  corporations,  and  it 
has  been  said  that  the  public  have  an  interest  in  the  location  of 
their  depots,  the  public  convenience  and  accommodation  being  in- 
volved. "It  is  in  recognition  of  the  paramount  duty  of  railway 
companies  to  establish  and  maintain  their  depots  at  such  points 
and  in  such  manner  as  to  subserve  the  public  necessities  and  con- 
venience, that  it  has  been  held  by  all  the  courts,  with  very  few  ex- 
ceptions, that  contracts  materially  limiting  their  power  to  locate 
and  relocate  their  depots  are  against  public  policy,  and  therefore 
void."  People  v.  Railway,  130  111.,  175.  "It  seems  to  be  uni- 
versally well  settled  that  contracts  undertaking  to  obligate  a  rail- 
road company  to  establish  its  depot  exclusively  at  a  particular 
point,  are  void  as  against  public  policy."  Railroad  v.  State,  31 
Fla.,  508.  Cases  and  text-books  to  the  same  effect  can  be  cited 
numerously.  We  give  only  a  few  of  them.  R.  R.  v.  Ryan,  11 
Kans.,  602 ;  R.  R.  v.  Seely,  45  Mo.,  212 ;  R.  R.  v.  People,  132  111., 
559;  R.  R.  v.  Marshall,  136  U.  S.,  393;  Holladay  v.  Patterson,  5 
Ore.,  177;  Greenhood  on  Pub.  Pol.,  319;  2  Beach  Mod.  Law  of 
Cont.,  sec.  1517. 

(That  the  contract  is  illegal,  the  decision  further  cites  Wood- 
man v.  Innes,  27  Am.  St.  Rep.,  274;  Elkhart  Co.  Lodge  v.  Crary, 
49  Am.  Rep.,  746;  Glenn  v.  Commrs.,  139  N.  C,  412;  Bridge  Co. 
v.  Comrs.,  81  N.  C.  491.) 

This  brings  us  to  the  consideration  of  the  next  question,  whether 
the  contract  being  void  as  founded  upon  an  illegal  consideration, 
the  plaintiff  can  recover  the  money  he  has  paid  in  part  execution 
of  the  same.  With  reference  to  this  subject  certain  rules  may  be 
taken  as  settled.  The  law  gives  no  action  to  a  party  upon  an  ille- 
gal contract,  either  to  enforce  it  directly  or  to  recover  back  money 
paid  on  it  after  it  has  been  executed.  Webb  v.  Fulchire,  25  N.  C, 
485;  Warden  v.  Plummer,  49  N.  C,  524;  15  Am.  &  Eng.  Enc. 
(2  Ed.),  997.  The  rule  rests  upon  the  broad  ground  that  no  court 
will  allow  itself  to  be  used  when  its  judgment  will  consummate  an 
act  forbidden  by  law.  The  maxim  is  ex  dolo  nialo  (or  ex  turpi 
causa)  non  oritur  actio,  and  the  kindred  one  is  in  pari  delicto 
potior  est  conditio  defcndcntis.  In  such  cases  the  law  leaves  the 
parties  where  it  finds  them.  When  parties  are  in  pari  delicto  in 
respect  to  an  illegal  contract,  and  one  obtains  advantage  over  the 
other,  a  court  will  not  grant  relief  (Wright  v.  Cain,  93  N.  C, 
296),  and  when  they  have  united  in  an  unlawful  transaction  to 
injure  another  or  others  or  the  public,  or  to  defeat  the  due  admin- 
istration of  the  law,  or  when  the  contract  is  against  public  policy, 


ILLEGAL,    CONTRACTS.  399 

or  contra  bonos  mures,  the  courts  will  not  enforce  it  in  favor  of 
either  party.     York  v.   Merritt,  77  N.   C,  213;  Ibid.,  80  N.   C, 
285;  King  v.  Winants,  71    N.   C,  469;   Pinckston  v.  Brown,   56 
N.  C,  494;  Sparks  v.  Sparks,  94  N.  C,  532.     Chief  Justice  Smith 
said  for  the  court  in  the  last  case:     "But  the  principle  is  that  such 
an  agreement  will  not  be  enforced  at  the  instance  of  either  party, 
not  that   what   may   have  been   done   in  carrying  out   its  purpose 
will  be  undone  by  the  court.     It  will  not  assist  when  its  aid  is 
asked,  or  in  other  words,  its  provisions  'will  not  be  enforced  in 
this  court' — a  court  exercising  equitable  functions.     The  rule  that 
refuses   to  compel   the   execution   of   such   a  contract,   for   similar 
reasons,  refuses  to  relieve  from  the  consequences  of  what  the  par- 
ties have  done  under  it,  in  giving  it  full  effect."     The  rule  is  de- 
parted from  when  there  is  inequality  of  condition  as  between  the 
parties,   or   one   of    them    has   come   under   the   subjection    of    the 
other,  or  has  been  induced  by  oppression,  imposition,  undue  influ- 
ence or  improper  means,  to  make  the  contract,  in  which  case  he 
is  not  equally  at  fault  with  the  other  party.     While  in  delicto,  he 
is  not  in  pari  delicto,  but  stands,  as  it  were,  in  vinculis.     Pincks- 
ton v.  Brown,  supra;  15  A.  &  Eng.  Enc,  1004.     When  the  con- 
tract is  executory,  the  court  will  not  enforce  it,  and  when  executed, 
will  not  set  it  aside  as  against  one  party  at  the  instance  of   the 
other.     We  need  not  decide  nor  inquire  whether,  when  money  is 
paid  on  an  illegal  contract,  the  aid  of  the  court  can  be  successfully 
invoked   for  its  recovery,  though  the  other  party  refuses  to  per- 
form any  part  of  the  agreement,  so  that  it  is  wholly  executory  on 
his    side.      There    is    a    conflict    of    authority    upon    this    question. 
Ibid.,  1001;  1  Page  on  Cont,  sec.  526;  Greenhood  on  Pub.  Pol., 
80;  Spring  Co.  v.  Knowlton,  103  U.  S.,  49;  Knowlton  v.   Spring 
Co.,  57  N.  Y.,  518;  Kearley  v.  Thompson,  L.  R.,  1   Q.  B.  Div., 
742;  White  v.  Bank,  22  Pick.,  181;  Wald's  Pollock  on  Cont.    (3 
Am.  Ed.),  502.     We  have  seen  that  he  may  recover  where  there 
has    been    any    unfair    advantage    taken    or    imposition    practiced. 
Webb  v.  Fulchire,  supra. 

But  it  must  not  be  supposed  from  what  has  been  said,  that  in 
order  to  deprive  a  party  of  the  right  to  repudiate  an  illegal  contract 
and  to  recover  money  already  paid  thereon,  it  is  necessary  that  the 
illegal  transaction  should  have  been  fully  executed,  as  it  is  quite 
sufficient  for  that  purpose  that  there  has  been  a  partial  fulfillment 
of  the  illegal  undertaking  by  the  party  against  whom  the  action  is 
brought  for  the  recovery  of  the  amount  so  paid  to  him.  15  Am.  & 
Eng.  Enc,  1007.  We  believe  that  the  law  writers  and  the  courts 
are  fairly  well  agreed  upon  that  proposition.  Kearley  v.  Thomp- 
son, supra;  Knowlton  v.  Spring  Co..  supra;  Ullman  v.  Fair  Asso., 
167  Mo.,  273;  Wald's  Pollock  on  Cont.    (3  Am.  Ed.),  502,  507; 


400  FORMATION    OF    CONTRACT. 

Hooker  v.  DePallos,  28  Ohio  St.,  251.  Especially  should  this  be 
the  law  where  the  party  who  has  thus  partially  performed  the  con- 
tract in  return  for  the  money  received  by  him  from  the  plaintiff 
can  not  be  put  in  statu  quo,  which  is  the  case  here.  Lord  Justice 
Fry,  in  Kearley  v.  Thompson,  supra,  for  the  court,  said :  "We  hold, 
therefore,  that  where  there  has  been  a  partial  carrying  into  effect 
of  an  illegal  purpose  in  a  substantial  manner,  it  is  impossible, 
though  there  remains  something  not  performed,  that  the  money 
paid  under  the  illegal  contract  can  be  recovered  back."  Chief  Jus- 
tice Coleridge,  Lords  Esher,  Bowen  and  the  other  eminent  Judges 
who  sat  with  them,  fully  concurred  in  this  view.  This  has  been 
generally  accepted  as  the  correct  rule,  even  by  the  courts  which 
hold  that  money  paid  on  an  illegal  contract  may  be  recovered  back 
where  the  contract  is  wholly  executory  on  the  other  side  or  as  to 
the  defendant.  The  principle  should  certainly  apply  to  our  case, 
in  which  it  appears  that  the  defendant  has  substantially  performed 
the  contract  in  part  and  can  not  be  restored  to  its  original  posi- 
tion, and  that  the  plaintiff  has  received  a  benefit  which  is  not  only 
substantial,  but  fully  commensurate  with  the  amount  he  has  paid 
on  the  contract.  While  he  loses  the  right  to  have  the  unexecuted 
portion  of  the  contract  performed,  he  does  not  by  any  means  de- 
part from  the  court  empty  handed.  Having  received  an  equiva- 
lent for  his  money  in  the  increased  value  of  his  property  by  the 
placing  of  the  city  hall  where  it  is,  he  has  no  just  ground  to  com- 
plain. We  find  no  error  in  the  conclusion  and  judgment  of  the 
court  upon  the  verdict.  No  error. 

A  public  corporation,  or  a  private  one  owing  the  duty  to  serve  the 
public,  charging  reasonable  and  equal  rates,  can  not  contract  away  its  power 
to  discharge  such  duty.  Soloman  v.  Sewerage  Co.,  141— p.  449 ;  Griffin 
v.  Water  Co.,  122—206;  Leavell  v.  Telegraph  Co.,  116—211;  Logan  v.  R. 
r  116—940:  Parrott  v.  R.  R.,  165—295;  Kansas  City  Paper  House  v. 
Foley  Rwv  Printing  Co..  85  Kan.,  678,  118  Pac,  1056,  39  L.  R.  A.  (X.  S.), 
747.  Ann.  Cas.,   1913A,  294. 

Dicrimination,  free  passes,  rebates,  etc. — The  statute  against  discrimi- 
nation in  rates  is  intended  to  secure  to  the  public  equal  and  impartial 
participation  in  the  use  of  the  facilities  which  the  company  is  capable  of 
affording,  and  which  it  is  its  dutv  to  provide.  Lumber  Co.  v.  R.  R.,  141— 
171:  //>.,  136 — 479;  Freight  Discrimination  Cases,  95—428,  434,  96—1.  A 
common  carrier  must  serve  the  public  without  discrimination,  and  must 
sell  its  tickets  and  accommodations  in  the  order  of  application.  Patter- 
son v.  Steamship  Co.,  140—412;  Basnight  v.  R.  R.,  147—169;  but  the  charge 
of  an  additional  sum  if  a  ticket  is  not  procured  is  valid,  provided  reason- 
able opportunity  is  given  to  get  a  ticket.  Amnion  v.  R.  R.,  138—555. 
Discrimination  by  rebates  is  prohibited.  Wilcox  v.  R.  R.,  154 — 582. 
The  same  rule  applies  to  other  corporations;  insurance,  Smathers  v.  Ins. 
Co,  151—98.  Revisal.  4775;  electric  companv,  Horner  v.  Electric  Co., 
153—535:  telephone  company,  Tel.  Co.  v.  Tel.  Co.,  159—9,  and  Woodley 
v.  Tel.  Co.,  163—284;  but  such  company  will  not  be  compelled  to  place  a 
phone   in   a   bawdy  house.     Godwin   v.  Tel.   Co.,   136 — 258. 

The  Corporation  Commission  has  power  to  prevent  discrimination,  etc. 
Revisal,  1094,  1095,  3749.  Free  passes  prohibited,  Revisal.  1105;  and  rail- 
road  companv   is   liable   to   indictment.    122—1052.    125—666:   but   the   holder 


ILLEGAL    CONTRACTS.  401 

of  the  pass  is  a  passenger  so  as  to  he  protected  from  injury  from  negli- 
gence.    McNeill  y.  R.   R.,    135—  082. 

County  authorities. — The  power  of  the  commissioners  is  to  he  used  for 
the  benefit  of  the  public  alone,  and  they  can  not  contract  to  maintain  a 
public  road  or  bridge  so  as  to  he  liable  to  an  individual  for  the  breach  of 
such  contract.  Glenn  v.  Comrs.,  139— p.  417;  Greenleaf  v.  Comrs.,  123 — 
30;  Stratford  v.  Greensboro,  124 — 127;  Trustees  v.  Realty  Co.,  134 — 41; 
in  the  latter  case  a  contract  to  help  in  the  building  of  a  bridge  was  held 
valid. 

See  generally,  Clark  Cont.,  288;  1  Page  Cont.,  sees.  415,  416:  15  Am.  & 
Eng.   Encyc.  963;  9  Cyc,  458;  6  R.  C.   L..  743. 

3.  Agreements   affecting   the    government. 

(157)   LANCE  v.  HUNTER, 

72  X.   C,   178,  25   A.  R.,  454—1875. 

This  was  an  action  to  recover  land.  There  was  a  judgment  for 
the  plaintiff,  and  defendant  appealed.  Affirmed. 

Bynum,  J.  The  facts  of  the  case  are:  Joseph  Lance,  one  of 
the  plaintiffs,  in  1863  contracted  to  sell  the  land  in  controversy  to 
J.  H.  Hunter,  the  father  of  the  defendant,  and  gave  him  a  bond 
to  make  title  upon  consideration  that  he  would  enter  the  military 
service  of  the  Confederate  States  and  serve  out  the  term  of  the 
war  as  a  substitute  for  his  son.  Hunter  did  enter  the  Confederate 
army  as  a  soldier;  served  during  the  war,  and  in  all  things  per- 
formed his  part  of  the  contract.  Hunter  has  since  died,  leaving 
the  defendant  as  his  assignee  of  the  contract,  and  also  as  one  of 
his  heirs  at  law,  in  possession  of  the  land  to  recover  which  this 
action  is  brought. 

The  parties  have  submitted  the  case  upon  the  following  agree- 
ment:  "It  is  agreed  that  the  whole  case  shall  turn  upon  the  valid- 
ity in  law  of  the  said  contract;  if  it  is  valid,  they  (the  plaintiffs) 
shall  not  recover;  if  it  is  not  valid,  they  shall  recover."  We  are 
relieved  from  any  discussion  of  the  single  question  thus  presented 
by  the  numerous  decisions  of  this  court,  all  to  the  same  effect ; 
that  is,  that  all  contracts  such  as  this  were  in  aid  of  the  rebellion. 
and,  as  such,  were  against  public  policy  and  are  void.  Smither- 
man  v.  Sanders,  64  N.  C,  522;  Critcher  v.  Holloway,  lb.,  526; 
Clemmons  v.  Hampton,  lb.,  264;  Leake  v.  Comrs.,  lb.,  134;  Logan 
v.   Plummer,  70  N.  C.  388.  and  Davis  v.  Comrs..  72  N.  C,  441. 

The  difficulty  I  had  was  whether,  both  parties  bein?  in  pari 
delicto,  this  court  could  lend  its  aid  in  restoring  the  plaintiffs  to 
that  possession  which  they  gave  the  defendant  in  part  perform- 
ance of  the  illegal  contract.  As,  however,  the  contract  was  void 
ah  initio,  and  as  though  it  had  never  been,  and  the  plaintiffs  have 
the  legal  title,  it  would  seem  that,  upon  principle,  they  are  entitled 
to  recover.     But  there  is  little  in  the  conduct  of  the  plaintiff  Lance 


402  FORMATION    OF    CONTRACT. 

that  commends  it  to  a  just  or  generous  mind.  Both  the  father 
and  the  very  son  whose  life  was  saved,  perhaps,  by  the  perform- 
ance of  the  contract  by  Hunter,  after  the  war  and  danger  are 
over,  now  seek  to  deprive  him  of  a  possession  acquired  at  such 
peril  and  in  such  good  faith.  Most  persons  of  sound  morals 
would  rather  be  the  defendant  without  than  the  plaintiffs  with  the 
land.     There  is  no  error. 

The  following  were  valid :  A  note  given  for  rent  of  land,  and  the  land 
was  to  be  used  to  raise  food  for  laborers  employed  by  the  government, 
McKesson  v.  Jones,  66 — 257;  a  county  contracted  a  debt  for  equipping 
soldiers,  and  afterwards  borrowed  monev  to  pay  it.  Poindexter  v.  Davis, 
67—112.     See  6  R.    C.   L.,   713. 

4.  Agreements  tending  to  interfere  with  public  justice. 
1.    COMPOUNDING   A    CRIME. 

(158)   LINDSAY  v.  SMITH, 

78   X.   C,   328,   24   A.   R..   463—1878. 

Civil  action  for  breach  of  covenant.  The  defendant  demurred, 
the  court  sustained  the   demurrer,  and  the  plaintiff  appealed. 

Bynum,  J.  This  is  an  action  for  breach  of  covenant.  The  de- 
fendants demur  to  the  complaint,  and  the  facts  are  these:  On  the 
17th  of  February,  1874,  an  indictment  was  pending  in  the  Supe- 
rior Court  of  Guilford  County,  against  the  plaintiff,  Lindsay,  for 
erecting  and  maintaining  a  public  nuisance,  by  constructing  a  dam 
across  a  certain  creek,  and  ponding  back  the  water,  which  thereby 
became  stagnant,  fetid  and  unwholesome,  to  the  common  nuisance 
of  the  citizens.  At  that  date  the  covenant  sued  on  was  entered 
into,  whereby  the  defendants  covenanted  under  the  penalty  sued 
for,  to  cut,  maintain  and  keep  in  repair,  a  certain  ditch  through 
the  lands  of  the  plaintiff;  and  the  plaintiff  covenanted  that  when 
the  work  was  done,  he  would  pay  the  defendants  $50;  and  it  was 
further  covenanted  as  follows :  "And  it  is  further  agreed  by  all 
the  parties  hereto,  in  consideration  of  the  premises,  that  the  in- 
dictment now  pending  in  the  Superior  Court  of  Guilford  County, 
against  the  said  Lindsay,  .  .  .  shall  be  discontinued  and  not  pro- 
ceed, and  the  prosecution  thereof  stopped  without  cost  to  the  said 

Lindsay \nd  it  is   further  agreed  and  understood  by  all 

the  parties  hereto,  that  this  agreement  is  to  be  of  no  binding  force 
on  any  of  said  parties,  until  and  unless  the  indictment  hereinbe- 
fore spoken  of  shall  be  discontinued  without  cost  to  said  Lindsay." 
And  this  covenant  is  signed  by  the  plaintiff  and  defendants. 

Assuming  this  covenant  to  have  been  broken  by  the  defendants, 
do  these   facts  constitute  a  cause  of  action? 


ILLEGAL    CONTRACTS.  403 

The   general    doctrine    was    admitted    by    the    plaintiff's    counsel, 
that   no   executory  contract,   the  consideration   of   which   is   contra 
bonos  mores  or  against  the  public  policy  of  the  laws  of  the  State, 
can  be  enforced  in  a  court   of   justice.      It   was   further  admitted 
that  when  the  consideration  of  a  contract  is  compounding  a  felony, 
or  the  suppressing  a  prosecution  of  an  offense  strictly  public  in  its 
character,  such  a  contract  can  not  be  enforced.     But  it  was  con- 
tended that  this   doctrine  applied  only  to   felonies,  or  at  most,  to 
public   misdemeanors,   and  that   it   had   no   application   to   offenses, 
though  indictable,  yet  private  in  their  nature,  as  affecting  an   in- 
dividual or  a  community,  as  in  this  case.     In  our  State  it  has  been 
decided  directly  otherwise.     Vanover  v.  Thompson,  49  N.  C,  485. 
There,  Thompson  executed  his  promissory  note  to  Vanover  "to  be 
valid  and  legal,  provided  the  said  Vanover  shall  not  appear  as  a 
prosecutor  or  witness   against   James   Thompson,   with    whom   the 
said  Vanover  has  a   controversy;   now   if   the  said  Vanover  shall 
thus  appear  this  note  to  be  null  and  void."      It   does  not  appear 
what  was  the  offense  of  Thompson,  but  a  State's  warrant  had  been 
issued  against  him  by  a  justice  of  the  peace,  for  some  offense  per- 
sonal to  Vanover,  who  failing  to  appear  as  a  witness,  the  proceed- 
ings were  dismissed.     The  plaintiff  was  nonsuited,  and  it  was  then 
pronounced  as  a  well-settled  principle  that  all  contracts   founded 
upon  agreements  to  compound  felonies,  or  to  stifle  prosecutions  of 
any  kind  are  void  and  can  not  be  enforced.     And  in   Garner  v. 
Quails,  49  N.   C,  223,  the  consideration  of  the  contract  was  the 
suppressing  the  prosecution   for  an  alleged  forgery.     The  obligee 
procured  the  bond  to  be  executed  by  representing  that  a  kinsman 
of  the  obligor  had  committed  an  indictable  offense,  and  by  agree- 
ing not  to  prosecute.     It  was  held  that  the  bond  was  void,  whether 
any  such  offense  had  been  committed  or  not.     This  case  is,  there- 
fore, a  conclusive  answer  to  the  objection  taken  in  our  case,  that 
the  supposed  indictment  did  not  charge  an  indictable  offense.     In 
Garner's  case,  the  obligor  believed  an  offense  had  been  committed, 
and  the  consideration  of  the  note  was  to  suppress  inquiry  about  it. 
It  is  a  matter  of  the  gravest  public  concern,  that  all  infractions  of 
the  criminal  law  should  be  detected  and  punished.     A  party  can 
not  take  care  of  his  private  interest  by  depriving  the  State  of  a 
witness  or  an  active  prosecutor,  which  is  the  means  relied  on  for 
the   conviction   of   offenders ;   much   less   can   he   pollute   the   very 
fountains    of    criminal    justice,    by    suppressing   an    indictment    al- 
ready instituted   against   him.     Thompson   v.   Chitman,   49   N.   C, 
47;  Ingram  v.  Ingram.  49  N.  C,   188;  Blythe  v.   Lovinggood,  24 
N.  C.,  20. 

So  in  civil  cases,  all  contracts  prohibiting  parties  from  bringing 
an  action  and  all  agreements  purporting  to  oust  the  courts  of  their 


404  FORMATION    OF    CONTRACT. 

jurisdiction;  all  agreements  to  pay  money  to  stifle  or  suppress  evi- 
dence or  to  give  evidence  in  favor  of  one  side  only,  or  not  to  ap- 
pear as  a  witness  in  a  civil  suit ;  all  contracts,  bonds,  indemnities 
and  undertakings,  tending  to  induce  sheriffs,  clerks,  jailers,  and 
other  public  officers  to  violate  or  neglect  their  duty  or  made  to 
protect  them  from  the  consequences  of  their  misconduct,  are  ab- 
solutely null  and  void,  as  contracts  obstructing  or  interfering  with 
the  administration  of  public  justice,  and  as  being  contrary  to  the 
public  policy  of  the  law.     1   Add.  on  Cont.,  sec.  258. 

But  the  defendant's  counsel  contends  with  great  ingenuity  that 
there  are  two  covenants  in  this  sealed  instrument,  and  that  they 
are  divisible,  part  being  good,  and  part  bad ;  that  the  contract  of 
the  defendants  is  to  do  two  things ;  first,  to  dismiss  the  indictment, 
which  is  illegal  and  void ;  but  second,  to  cut  and  keep  up  the  ditch, 
which  is  legal  and  valid,  and  is  the  contract  for  the  breach  of 
which  the  action  is  brought.  In  regard  to  this  proposition  the  gen- 
eral rule  is  that  if  there  are  several  considerations  for  separate 
and  distinct  contracts,  and  one  is  good  and  the  other  bad,  the  one 
may  stand  and  be  enforced,  although  the  other  fails,  under  the 
maxim  "utile  per  inutile  non  vitiatitr."  But  where  there  is  but 
one  entire  consideration  for  two  several  contracts,  and  one  of  these 
contracts  is  for  the  performance  of  an  illegal  act,  the  whole  is 
void,  as  where  one  sum  is  to  be  paid  for  the  doing  of  a  legal  and 
an  illegal  act.  Thus,  where  upon  a  contract  for  the  hiring  and 
service  of  a  housekeeper  at  certain  agreed  wages  it  appears  to  have 
been  a  part  of  the  contract  that  the  housekeeper  should  cohabit 
with  her  master,  the  whole  will  be  void  and  the  wages  irrecover- 
able by  her.  Rex  v.  Northingfield,  1  B.  &  Ad.,  912;  Willyams  v. 
Bullmore,  32  Beav.,  574;  1  Add.  on  Cont.,  sec.  300.  In  Alexan- 
der v.  Owen,  1  T.  R.,  227,  the  case  was  this:  Upon  a  contract  of 
sale  of  tobacco,  it  was  agreed  that  counterfeit  money  should  be 
taken  in  payment,  and  the  tobacco  having  been  delivered  and  the 
counterfeit  money  sent,  the  vendor  refused  to  receive  it  and 
brought  an  action  to  recover  the  price  of  the  tobacco,  but  the  court 
said  that  the  sale  could  not  be  held  to  be  good  and  the  payment 
bad;  if  it  was  an  illegal  contract,  it  was  equally  bad  for  the  whole, 
and  tbe  parties  being  in  pari  delicto,  mclior  est  conditio  defend- 
entis.  Apply  these  principles  to  our  case.  There  was  but  one  in- 
divisible consideration  moving  from  the  plaintiff,  to  wit,  the  sum 
of  fifty  dollars,  and  for  that  consideration,  the  defendants  cove- 
nant to  do  two  things, — the  one  legal  and  the  other  illegal.  The 
consideration  can  not  be  divided  and  enough  of  it  assigned  to  sup- 
port the  contract  to  cut  and  maintain  the  ditch,  but  it,  as  it  were, 
per  my  et  tout,  enters  into  and  supports  both  promises. 

But  there  is  another  view  equally  fatal  to  this  action.     A  part  of 


ILLEGAL    CONTRACTS.  405 

the  covenant  is  in  these  words :  "And  it  is  further  agreed  and 
understood  by  all  the  parties  hereto,  that  this  agreement  is  to  be 
of  no  binding  force  on  any  of  said  parties  whose  names  are  signed 
hereto,  until  and  unless  the  indictment  hereinbefore  spoken  of, 
shall  be  discontinued  without  cost  to  the  said  Lindsay."  So  the 
validity  of  the  contract  is  expressly  made  to  depend  upon  the  per- 
formance of  the  very  act  which  makes  it  invalid,  to  wit,  the  dis- 
missal of  the  indictment.  The  covenants  were  not  to  be  binding 
until  the  prosecution  had  been  discontinued,  and  the  contract  to 
dismiss  it  was  immoral  and  void.  In  such  cases  the  law  will  leave 
the  parties  where  it  finds  them.  Kimbrough  v.  Lane,  11  Bush., 
556;  Setter  v.  Alvey,  15  Kans.,  157;  1  Smith  Lead.  Cas.  Marg., 
pp.  153-165,  and  notes:  King  v.  Winants,  71  N.  C,  469,  and  73 
N.  C,  563.  No  error. 

To  the  same  effect,  Cameron  v.  McFarland,  4—299;  Comrs.  v.  March, 
89 — 268;  Corbett  v.  Clute,  137 — 546.  An  attempt  to  secure  the  nonattend- 
ance  of  a  witness  was  held  contempt,  In  re  Young,  139 — 552;  but  an 
agreement  to  furnish  evidence  was  held  valid,  48 — 363.  Compounding  a 
felony  is  indictable,  State  v.  Hodge,  142 — 665 ;  but  one  may  compromise 
the  private  injury.  Self  v.  Clark,  55 — 309;  Smith  v.  Hartsell,  150—71; 
Alston  v.  Hill,  165—255;  Jones  v.  Dannenburg,  112  Ga.,  426,  37  S.  E.,  729, 
52  L.  R.  A.,  271;  Wood  v.  Casserleigh.  30  Colo.,  287,  71  Pac,  360,  97 
A.  S.  R.,   148. 

See  generally,  Clark  Cont,  292:  15  Am.  &  Eng.  Encyc,  977;  1  Page 
Cont.,  417-422;  9  Cyc,  505;  6  R.  C.  L.,  755. 

x  2.    ARBITRATION    AGREEMENTS. 

(159)   BRADDY  v.  INSURANCE  CO., 

115  N.  C,  354,  20  S.  E..  477—1894. 

Civil  action,  in  which  there  was  a  verdict  and  judgment  for  the 
defendant,  and  the  plaintiff  appealed. 

Avery,  J.  While  it  is  well  settled  that  an  agreement  in  a  policy 
of  insurance  to  submit  to  arbitrators  the  single  question  of  the 
amount  of  loss  by  fire  sustained  by  the  person  injured  is  not  in- 
valid (Manufacturing  Co.  v.  Ins.  Co.,  106  N.  C,  28;  Carroll  v. 
Ins.  Co.,  72  Cal.,  297),  it  is  equally  well  understood  that  a  con- 
tract which  would  oust  the  jurisdiction  of  the  courts  by  leaving 
all  of  the  matters  involved  in  any  controversy  that  might  arise 
between  insurer  and  insured  to  such  arbitrament  is  void  as  against 
public  policy.  Angel  on  Insurance,  431  ;  Scott  v.  Avery,  Ex.  S. 
C,  20,  En.  L.  &  E.  Rep.,  327 ;  Sancilito  v.  C.  U.  A.  Co.',  66  Cal., 
256;  2  Biddell  on  Ins.,  sec.  1154.  If  a  stipulation  in  the  policy 
to  submit  all  controverted  questions  that  may  arise  in  case  of  loss 
to  arbitrators  can  not  be  enforced,  will  the  courts  allow  a  contract 
making  the  submission  of  the  single  question  of  the  amount  of  loss 


406  FORMATION    OF    CONTRACT. 

sustained,  to  deprive  a  plaintiff  of  the  opportunity  to  try  the  issues 
of  fact  involved,  of  his  right  to  recover  before  a  jury  by  reason  of 
the  misconduct  of  the  parties  or  of  the  arbitrators?  If  either 
party  acts  in  bad  faith  in  order  to  defeat  the  real  object  of  the 
arbitration,  the  other  is  absolved  from  duty  in  regard  to  it,  and 
from  any  obligation  to  enter  into  a  new  agreement  for  arbitration. 
2  May  on  Ins.,  sec.  496b;  Uhrig  v.  Ins.  Co.,  101  N.  Y.,  362; 
Wood  on  Ins.,  sec.  230.  "A  claimant  under  such  a  policy,"  said 
the  court  in  Uhrig's  case,  supra,  "can  not  be  tied  up  forever  with- 
out his  fault  and  against  his  will."  Citing  that  case  to  sustain  the 
proposition,  Biddell,  in  his  work  on  Insurance,  sec.  1162,  says: 
"Where  each  party  duly  selects  an  arbitrator,  but  the  umpire  fails 
of  selection,  it  is  said  there  need  not  be  a  new  arbitration."  The 
Supreme  Court  of  Pennsylvania,  in  Com.,  etc.,  Ins.  Co.  v.  Hoik- 
ing, 115  Pa.  St.,  416,  held  that  where  two  arbitrators,  appointed 
under  an  agreement  like  that  in  the  policy  sued  on,  failed  to  agree, 
then  a  suit  brought  by  the  plaintiff  should  be  deemed  a  revocation 
of  such  agreement.  The  parties  can  contract  that,  at  the  written 
request  of  either  of  them,  they  will  each  select  an  arbitrator  and 
empower  them  to  choose  an  umpire ;  but  if  the  courts  should  give 
their  sanction  to  any  course  of  conduct  on  the  part  of  the  insurer 
or  of  the  arbitrator  selected  by  the  defendant,  that  might  be  re- 
peated in  any  case  which  might  arise  and  operate  to  indefinitely 
delay  the  precedent  arbitration  and  prevent  the  bringing  of  an 
action,  it  would  manifestly  enable  the  insurer  by  appointing  an 
interested  and  corrupt  appraiser  to  accomplish  indirectly  what  the 
law  declares  shall  not  be  done  directly  by  virtue  of  a  stipulation  or 
agreement. 

By  the  terms  of  the  contract  to  submit  to  the  appraisers,  they 
were,  when  appointed,  to  meet  in  the  town  of  Winston  on  the  1st 
day  of  December,  1892,  and  the  parties  were  to  waive  all  further 
notice  of  the  meeting  on  that  day,  or  their  subsequent  meetings. 
The  plaintiffs  named  one  L.  G.  Cherry,  of  Winston,  and  the  de- 
fendant selected  one  Westbrook,  of  Atlanta,  Georgia.  When  the 
two  met,  we  must  assume  that  the  defendant,  having  waived  all 
claim  to  further  notice,  was  cognizant  of  all  that  was  done  by  the 
arbitrators  selected.  The  first  proposition,  emanating  from  West- 
brook,  was  to  select  one  Wilson,  a  resident  of  Winston.  Cherry 
objected,  and  assigned  as  a  reason  that  Wilson  had  already  been 
suggested  by  another  insurance  company,  liable  for  the  same  loss, 
as  a  suitable  appraiser  to  act  for  it  in  estimating  the  very  same 
loss.  This  objection  was  not  an  unreasonable  one,  since,  supposing 
that  Cherry's  objection  was  to  secure  the  services  of  not  only 
honest,  hut  unprejudiced  men,  he  did  what  any  cautious  lawyer 
would   have  advised  his  client   to  do   in   reference  to  a   juror  when 


ILLEGAL    CONTRACTS.  407 

he  objected  to  having  the  rights  of  the  plaintiff  passed  upon  by 
a  man  who  might  be  biased  by  the  fact  of  his  selection  by  another 
company  which  was  antagonistic  to  the  plaintiff,  to  represent  it  in 
passing  upon  the  very  same  question.  The  next  move  was  also 
made  by  Westbrook,  when  he  proposed  that  each  appraiser  should 
nominate  three  men  for  umpire,  and  the  two  should  try  to  agree 
upon  one  of  the  six  so  selected.  Cherry  named  three  business  men 
of  the  town  of  Winston,  to  all  of  whom  Westbrook  objected,  but 
it  does  not  appear  that  he  assigned  any  cause.  Westbrook  named 
three  persons,  all  residents  of  the  State  of  Georgia.  Cherry  ob- 
jected, and  stated  as  a  reason  for  so  doing  that  they  all  lived  in 
the  State  of  Georgia,  and,  as  we  assume,  were  unknown  to  him. 
The  trial  of  the  question  of  the  amount  of  loss  was  to  be  left  for 
decision  to  appraisers  instead  of  a  jury,  to  whom  but  for  the 
agreement  the  plaintiff  might  have  demanded  that  it  be  submitted. 
We  do  not  think  it  unreasonable  for  an  appraiser,  acting  with  a 
view  to  secure  the  services  of  an  unprejudiced,  competent  and 
honest  associate,  to  insist  that  only  the  names  of  persons  living  in 
the  vicinity,  or  in  the  State,  or  in  some  way  known  to  him,  at 
least  by  reputation,  should  be  tendered  to  him  to  take  the  place 
and  discharge  the  functions  of  a  juror.  The  failure  of  the  arbi- 
tration was  evidently  due  to  the  unreasonable  conduct  of  the  ap- 
praiser selected  by  the  defendant,  and  they  had  notice  of  all  that 
was  done  by  him.  It  is  not  necessary  for  us  to  follow  the  ruling 
of  the  court  of  Pennsylvania  in  holding  that,  in  any  failure  of 
arbitrators  selected,  to  agree,  the  plaintiff  is  left  at  liberty  to  sue 
though  good  reasons  could  be  given  for  so  doing.  But  in  this  par- 
ticular case,  where  the  defendant  permitted  the  appraiser,  chosen 
by  it,  to  leave  for  Georgia,  giving  his  address  to  Cherry,  after 
acting  so  unreasonably,  and  held  its  peace  then  and  thereafter  till 
the  10th  of  February,  1893,  when  the  summons  was  issued,  it  is 
manifest  that  if  the  company  did  not  intend  or  consent,  by  dila- 
tory measures,  to  defeat  the  bringing  of  an  action  altogether,  the 
success  of  the  stratagem  adopted  by  Westbrook,  if  approved,  might 
point  out  the  way  for  an  unscrupulous  agent  in  the  future  de- 
signedly to  accomplish  what  the  law  would  declare  unlawful  if  it 
were  attempted  by  means  of  the  enforcement  of  a  contract. 

The  court  instructed  the  jury  that  if  they  believed  the  evidence, 
to  find  by  an  affirmative  response  to  the  first  issue  that  the  arbi- 
tration was  still  in  force.  In  this  ruling  we  think  that  there  was 
error.  As  another  trial  will  be  had,  and  other  additional  evidence 
may  be  brought  out  bearing  on  the  other  questions  involved,  we 
deem  it  unnecessary  to  advert  to  any  other  exceptions. 

New  trial. 

This   case    is    approved    in    116 — 491    and    123 — 164.      Such    provisions    may 


408  FORMATION    OF    CONTRACT. 

be  conditions  precedent.  106 — 28,  and  110—176.  An  agreement  restricting 
the  right  of  appeal  is  void.  Falkner  v.  Hunt,  68 — 475;  Runnion  v.  Ram- 
say 93_4i0;  Pendleton  v.  Electric  Light  Co.,  121—20.  Agreement  to 
arbitrate  may  he  a  separate  contract  for  breach  of  which  party  would  be 
liable.  Carpenter  v.  Tucker,  98— p.  319;  Kelly  v.  Tremont  Lodge,  154 — 
97;  Williams  v.  Manfg.  Co,,  154—205;  Kinney  v.  Employ.  Association,  35 
W.  Va.,  385,  14  S.  E.,  8,  15  L.  R.  A.,  142. 

See  also  2  Am.  &  Eng.  Encyc,  570  et  seq.;  Hamilton  v.  Ins.  Co.,  136 
U.  S.,  242;  Clark  Cont.,  294;  1  Page  Cont.,  sees.  347-353;  9  Cyc,  510; 
Pollock  Cont.,  445;   6  R.   C.   L.,  752. 

5.  Agreements  tending  to  encourage  litigation. 

(160)   MUNDAY  v.  WHISSENHUNT, 

90  N.   C,  458—1884. 

Civil  action  to  recover  for  services  rendered  under  a  written 
contract,  the  substance  of  which  is  stated  in  the  opinion.  There 
was  a  verdict  and  judgment  for  the  defendant,  and  plaintiff  ap- 
pealed. 

Merrimon,  J.  As  no  special  grounds  of  error  are  assigned  in 
the  record,  it  becomes  necessary  to  determine  whether  or  not,  in 
any  view  of  the  whole  record,  the  plaintiff  was  entitled  to  recover. 
His  counsel  insisted  in  the  argument  before  us,  that  the  allega- 
tions in  the  complaint  constituted  a  good  cause  of  action,  and  the 
defendants  having  denied  the  same,  the  evidence  introduced  on 
the  trial  fully  proved  them,  and,  therefore,  the  court  erred  in  hold- 
ing that  the  plaintiff  could  in  no  wise  recover. 

It  is  a  clear  principle  of  law,  that  an  engagement,  whether 
under  seal  or  by  parol,  to  do  an  immoral  act  or  service,  or  such 
acts  as  contravene  the  settled  policy  of  the  law,  can  not  be  upheld 
as  a  binding  contract,  nor  can  the  plaintiff  in  an  action  recover 
compensation  for  services  rendered  under  or  in  pursuance  of  such 
engagement.  The  sound  maxim  of  the  common  law  is,  ex  turpi 
contractu  non  oritur  actio.  Whatever  contravenes  sound  morality, 
or  the  policy  of  the  law,  vitiates  and  renders  void  any  contract 
or  engagement  into  which  it  may  enter. 

In  our  judgment  the  contract  sued  upon  in  this  case  is  illegal 
and  void,  because  it  stipulates  for  a  service  to  be  performed  by 
the  plaintiff  that  the  law  forbids,  upon  grounds  of  public  policy, 
and  denominates  maintenance  and  champerty. 

One  Jones  had  brought  his  action  in  the  Superior  Court  of  Al- 
exander County  against  the  testator  of  the  defendants,  to  recover 
a  tract  of  Land.  The  plaintiff  in  this  action  was  in  no  way  a  party 
to  or  interested  in  that  suit.  He  was  a  stranger  to  it,  and  not  re- 
lated to  the  defendant  therein.  He  was  not  a  lawyer,  but  a  lay- 
man, and  not  authorized  to  manage  or  defend  suits  for  other  peo- 
ple in  courts  of  justice.     Nevertheless,  he  entered  into  a  contract, 


ILLEGAL    CONTRACTS.  409 

the  substance  of  which  was  that  the  plaintiff  in  this  case  should 
aid  the  defendant  in  the  action  mentioned,  in  defending  and 
managing  his  case,  and  receive  as  compensation  for  his  services 
in  that  respect  one-half  of  the  land  in  controversy,  or  one-half  its 
value,  if  the  defendant  should  secure  it,  or  if  the  suit  should  be 
compromised,  then  one-half  of  whatever  might  be  realized  or 
saved  by  such  compromise;  and  if  the  defendant  should  entirely 
fail  of  success,  the  plaintiff  was  in  that  case  to  get  nothing  for 
his  services.  This  comes  clearly  within  the  meaning  of  main- 
tenance and  champerty. 

It  was  not  the  business  of  the  plaintiff  to  advise  about  and  man- 
age lawsuits,  and  he  had  no  authority  to  do  so.  He  interfered  in 
a  litigation  that  in  no  way  concerned  him,  and  engaged  to  help 
one  of  the  parties  to  it  (the  defendant),  exactly  how,  does  not 
appear,  but  in  some  effective  way,  and  to  receive  as  pay  for  his 
services  one-half  of  whatever  advantage  might  be  realized  by  his 
employer.  This  is  precisely  what  the  law  forbids.  It  does  not 
tolerate  or  permit  such  interference.  If  the  plaintiff  might  so  in- 
terfere in  the  case  referred  to,  he  may  do  so  in  any  case,  and  to 
any  extent.  If  he  may  do  so,  every  other  person  may  do  likewise; 
and  it  is  easy  to  see  that  the  result  would  be  that  all  manner  of 
combinations  and  conspiracies  would  be  brought  about  to  prevent 
and  stifle  justice,  sometimes  in  one  way  and  sometimes  in  another. 
It  is  a  wise,  wholesome  and  necessary  provision  of  the  law,  justi- 
fied by  the  experience  of  ages,  that  men  shall  not  interfere  in  law- 
suits in  which  they  have  no  interest,  to  help  one  party  or  the 
other  in  consideration  of  a  part  of  the  fruits  of  litigation.  Such 
contracts  are  not  only  invalid,  but  it  is  indictable  at  the  common 
law  to  so  interfere.  This  court  has  uniformly  recognized  and  up- 
held the  doctrine  of  the  common  law  on  this  subject.  In  Barnes 
v.  Strong,  54  N.  C,  100,  it  was  held  that  a  contract  between  a 
father  and  his  son,  made  during  the  pendency  of  a  suit  against  the 
father,  whereby  the  son  agreed  to  defend  the  suit  for  the  father, 
in  consideration  of  receiving  a  part  of  the  property  in  controversy, 
in  case  of  success,  is  void,  as  coming  within  the  prohibition  of  the 
common  law  against  champerty.  This  case  is  a  stronger  one  than 
that. 

It  was  insisted  on  the  argument  that  the  purpose  of  the  plain- 
tiff was  to  bring  about  a  compromise  of  a  lawsuit,  and  not  to 
foment  strife.  If  that  be  granted,  it  was  still  an  interference  and 
taking  sides  for  a  part  of  the  advantage  to  be  gained.  But  the 
contract  shows  very  clearly  it  was  contemplated  that  defense  was 
to  be  made,  and  an  effort  to  secure  the  whole  land  in  controversy, 
in  which  case  the  plaintiff  was  to  have  one-half  of  it,  or  half  its 
value  in  money.     This  was  champerty,  and  rendered  the  contract 


410  FORMATION    OF    CONTRACT. 

void.     Martin  v.  Amos,  35  N.  C,  201  ;  Barnes  v.   Strong,  supra; 
7  Wait's  A.  &  D.,  73  ;  2  Bacon  Abr.  Title,  Champerty. 

There  is  no  error,  and  the  judgment  must  he  Affirmed. 

"Maintenance"  is  properly  denned  as  an  "officious  intermeddling  in  a 
suit,  which  in  no  way  belongs  to  one.  by  maintaining  or  assisting  either 
party  with  money  or  otherwise  to  prosecute  or  defend  it.'  "Champerty" 
is  a  species  of  maintenance  whereby  a  stranger  makes  a  "bargain  with  plain- 
tiff or  defendant  to  divide  the  land  or  other  matter  sued  for  between  them  if 
they  prevail  at  law,  whereupon  the  champertor  is  to  carry  on  the  party's  suit 
at  his  own  expense."  The  harsher  application  of  the  doctrine  contained 
in  these  definitions,  as  it  formerly  obtained,  has  been  very  much  relaxed 
and  modified.  Under  the  more  recent  decisions  many  exceptions  have 
been  recognized,  and  it  has  been  very  generally  accepted  that  an  agree- 
ment will  not  lie  held  within  the  condemnation  of  this  principle  unless  the 
interference  is  clearly  officious  and  for  the  purpose  of  stirring  up  "strife 
and  continuing  litigation."  Smith  v.  Hartsell,  150 — p.  76,  citing  Oilman 
v.  Jones,  87  Ala.,  691;  Torrence  v.  Shedd.  112  111..  466:  Thalhimer  v. 
Brinkerhoff,  3  Cowen,  623,  15  A.  I)..  308.  See  also  Nichols  \  Bunting, 
10-86;  Slade  v.  Rhodes,  22 — 24.  A  bond  conditioned  "to  break  the  will 
or  pay  all  costs"  is  void  for  maintenance.  Martin  v.  Amos.  35 — 201.  A 
man  ma}'  maintain  the  suit  of  his  near  kinsman,  servant  or  poor  neighbor, 
out  of  charity  or  compassion,  but  not  for  a  part  of  the  results  of  litiga- 
tion. Barnes  v.  Strong,  54 — 100:  but  in  Wright  v.  Cain,  93 — 296,  the  par- 
ties were  not  in  pari  delicto,  on  account  of  the  difference  in  position.  An 
agreement  giving  the  right  to  bring  a  suit  for  breach  of  covenant  of  war- 
ranty, without  consideration,  is  champertous.  Ravenal  v.  Ingram,  131 — 
549.  The  doctrines  of  champerty  were  adopted  at  common  law  to  prevent 
the  transfer  of  rights  of  action.     5  Am.  &  Eng.  Encyc,  818. 

Attorneys'  contingent  fee. — In  some  States  such  a  contract  is  considered 
champertous  and  in  others  valid.  1  L.  R.  A..  516:  4  L.  R.  A.,  113:  9  L. 
R.  A..  90.  In  North  Carolina  it  seems  to  be  valid.  Allison  v.  R.  R.. 
129 — 336.  An  agreement  that  the  client  will  not  settle  the  suit  without 
the  consent  of  the  attornev  has  been  held  invalid.  Burho  v.  Carmichiel, 
117  Minn..  211.  135  X.  W.,  386:  In  re  Snvder.  190  X.  V.,  66,  82  X.  E., 
742,    123  A.   S.  R..533,   14  L.  R.   A.    (X.   S.j,   1101,    13   Ann.   Cas.,  441. 

Attorneys'  fee  in  a  note. — A  stipulation  that  "in  case  this  note  is  col- 
lected by  usual  process,  the  usual  collection  fee  shall  be  added  and  pay- 
able therewith."  is  void,  as  against  public  policy.  Tinsley  v.  Hoskins, 
111 — 340:  Brisco  v.  Xorris,  112 — 671:  so  also  in  a  mortgage,  Williams  v. 
Rich,  117—235:  Turner  v.  Boger.  126—300:  Bank  v.  Lumber  Co.,  128— 
193;  Staton  v.  Webb,  137 — 35;  Revisal,  2346.  In  some  States  such  a 
stipulation  is  valid.     See  generally,  4   Am.  &  Eng.   Encyc.  98  et  seq. 

Champerty  and  maintenance  generalb.  1  Page  Cont.,  sees.  338-346:  9 
Cyc,    500.    515:    Clark   Cont.,   296. 

6.  Agreements  of  immoral  tendency. 

i  lol  )   BROWN  v.  KINSEY, 

81  X.  C.  245—1879. 

DlLLARD,  J.  The  case  in  the  court  below  was  four  appeals 
from  a  justice's  court,  founded  on  four  honds  executed  by  the  tes- 
tator of  the  defendant  on  the  13th  day  of  September,  1872,  to 
Wine  Fred  Hill,  and  asigned  by  her  after  due  to  the  plaintiff. 
By  order  of  the  court,  the  actions  were  consolidated,  and  the  trial 
was  had  by  a  jury  on  the  issue  joined  on  the  plea  of  immoral  con- 


ILLEGAL    CONTRACTS.  411 

sideration,  and  the  evidence  relied  on  by  the  defendant  being  all 
in,  His  Honor  being  of  opinion  that  the  same  was  not  such  as  rea- 
sonably to  warrant  a  rinding  of  a  matter  of  avoidance  pleaded,  so 
held.  Thereupon  the  verdict  was  for  the  plaintiff,  and  the  defend- 
ant appealed. 

The  question  on  appeal  is  whether  the  evidence  advanced  was 
or  was  not  such  as  in  law  to  authorize  and  require  the  judge  to 
submit  it  to  the  jury  upon  which  to  find  the  fact  of  immoral  con- 
sideration alleged  by  the  defendant. 

The  evidence  was,  that  the  testator  of  defendant  died  in  Octo- 
ber, 1872.  and  that  about  five  years  before  his  death  Winefred 
Hill,  the  assignor  of  the  plaintiff,  gave  birth  to  a  bastard  child  be- 
gotten by  him  (said  testator),  and  afterwards,  in  the  course  of  the 
same  illicit  intercourse,  he  executed  to  her  a  bond  under  seal  for 
three  hundred  dollars.  Winefred,  on  her  death,  said  he  owed  her 
nothing,  and  that  when  the  bond  was  delivered  to  her,  testator 
made  no  declaration  as  to  his  reason  or  to  the  consideration  mov- 
ing him  thereto.  Upon  the  death  of  testator's  wife,  the  said  Wine- 
fred went  to  live  in  the  house  of  testator,  and  took  charge  of  his 
domestic  business  about  a  month  before  the  testator  died.  And 
whilst  there,  on  the  13th  of  September,  1872,  during  the  continu- 
ance of  the  immoral  connection,  the  testator  took  up  the  bond  for 
$300  and  destroyed  it,  and  then  and  there  executed  to  said  Wine- 
fred the  four  bonds  now  in  suit,  one  of  them  falling  due  on  each 
first  day  of  January  in  the  next  four  succeeding  years,  stating  at 
the  time  that  they  were  executed  in  place  of  the  bond  for  $300, 
and  he  made  no  declaration  as  to  the  motive  for  the  substitution 
or  the  consideration  on  which  they  were  founded. 

Upon  the  issue  joined,  the  bonds  under  which  the  plaintiff 
claims  being  under  seal,  the  execution  and  delivery  made  them 
effectual  at  law,  and  made  them  deeds,  things  done;  and  by  the 
common  law  they  had  the  force  and  effect  to  authorize  plaintiff 
to  recover  without  any  consideration,  with  power,  however,  in  the 
defendant  to  have  the  same  held  null  upon  proof  of  illegal  or  im- 
moral consideration,  not  from  any  motive  of  advantage  to  him  or 
his  testator,  but  from  consideration  of  public  interest  and  of 
morality.  Harrell  v.  Watson,  63  N.  C.  454;  2  Chitty  on  Cont., 
971;  Collins  v.  Blantern,  1   Smith's  Lead.  Cas.,  153. 

On  the  trial,  then,  we  are  to  take  it  that  plaintiff  was  absolutely 
entitled  to  recover,  unless  the  defendant  showed  the  immoral  con- 
sideration alleged,  by  evidence  full  and  complete,  or  by  proof  of 
such  facts  and  circumstances  as  would  reasonably  warrant  a  jury 
to  find  it  as  a  fact.  In  other  words,  the  onus  was  on  the  defend- 
ant, and  in  order  to  defeat  the  recovery  it  was  incumbent  on  him 
to  show  that  the  bonds  were  not  voluntary,  that  is.  not  executed 


412  FORMATION    OF    CONTRACT. 

as  a  mere  gift,  and  not  on  the  consideration  of  past  cohabitation, 
which  is  legal,  but  on  the  consideration,  in  whole  or  in  part,  for 
future  criminal  intercourse,  or  to  show  that  the  nature  of  the 
securities  was  such  as  to  hold  out  an  inducement  or  constitute  a 
temptation  to  Winefred  Hill  to  continue  the  connection. 

It  is  indisputable  that  the  bonds,  if  executed  as  a  gift  by  the 
testator  of  defendant  to  Winefred  Hill,  the  mother  of  his  bastard 
child,  would  be  legal  and  enforceable,  it  not  being  immoral  to  as- 
sist her  by  gift  to  raise  his  progeny  ;  and  it  is  equally  settled  that 
if  they  were  given  for  past  cohabitation,  they  would  be  binding  on 
the  ground  that  the  illicit  connection  was  an  evil  already  past  and 
done,  and  the  public  had  no  interest  to  defeat  them.  The  only 
restriction  put  on  the  contracts  of  the  parties  is,  that  they  shall 
not  stipulate  for  future  fornication,  or  in  such  manner  as  that  the 
security  given  shall  operate  as  an  inducement  or  motive  to  go  on 
in  the  vicious  course.  2  Chitty  on  Cont.,  979 ;  Trovenger  v.  Mc- 
Burney,  5  Cowen,  253 ;  Gray  v.  Mathias,  5  Vesey's  Ch.  Rep.,  286. 

In  these  cases  it  is  held  that  the  continuation  of  the  criminal 
intercourse  after  the  execution  of  the  bond  or  contract  impeached 
for  immorality,  does  not  invalidate  the  same;  but  that  it  is  to  be 
avoided  and  held  null  only  on  proof  that  it  was  executed  in  whole 
or  part  on  the  understanding  that  the  connection  was  to  continue. 
This  will  be  apparent  from  the  following  extracts  taken  there- 
from. In  the  case  of  Trovenger  v.  McBurney,  supra,  the  court 
say :  "A  bond  executed  for  the  cause  of  past  cohabitation,  al- 
though the  connection  is  continued,  is  not  invalidated  thereby." 
The  test  always  is,  does  it  appear  by  the  contract  itself,  or  was 
there  any  understanding  of  the  parties,  though  not  expressed,  that 
the  connection  was  to  continue.  In  the  case  of  Gray  v.  Mathias, 
supra,  a  bond  was  given  during  the  cohabitation,  and  in  the  course 
of  the  cohabitation  a  second  bond  was  given,  which,  upon  its  face, 
recited  the  existing  illegal  connection  and  stipulated  for  its  con- 
tinuance, with  an  annuity  for  the  woman  in  case  of  discontinu- 
ance ;  and  it  was  held  that  the  last  bond  was  void,  but  the  former 
was  good,  although  the  cohabitation  continued  after  its  execution. 

In  the  case  of  Hall  v.  Palmer,  3  Hare,  532,  the  bond  was  exe- 
cuted to  the  woman  conditioned  to  pay  an  annuity  from  and  after 
the  death  of  the  obligor,  and  the  parties  lived  together  at  the  time 
and  continued  so  to  live  afterwards  upon  a  declaration  of  the 
obligor  that  lie  did  not  intend  to  break  off  the  connection ;  and 
upon  a  reference  to  the  master,  it  being  found  as  a  fact  that  it 
was  given  for  past  cohabitation,  it  was  held  that  the  continuance 
of  the  connection  after  the  execution  of  the  obligation  had  no 
effect  to  invalidate  it. 

From  the  principle  decided  in  these  cases,  it  may  be  taken  as 


ILLEGAL,    CONTRACTS.  413 

settled  that  the  cohabitation  of  the  testator  of  defendant  with 
Winefred  Hill  after  the  execution  of  the  bond  to  her,  did  not  by 
any  legal  presumption  invalidate  the  same;  and  that  the  same 
could  only  be  held  void  on  proof  that  there  was  an  understanding, 
express  or  implied,  that  the  criminal  intercourse  was  to  be  con- 
tinued. Applying  these  principles  to  our  case,  we  have  this  state 
of  things:  At  the  time  the  first  bond  for  $300  was  given,  Wine- 
fred. testified  that  testator  of  defendant  owed  her  nothing,  and 
therefore  the  bond  was  voluntary ;  or  if  not  that,  then  it  may  have 
been  on  consideration  of  past  cohabitation,  and  if  so,  it  was  valid, 
or  it  may  have  been  partly  for  past  and  partly  for  future,  or  alto- 
gether for  future  intercourse,  and  if  the  latter,  then  the  onus  was 
on  the  defendant  to  prove  it  otherwise  than  by  mere  evidence  of  a 
continued  connection  after  the  bonds  were  executed. 

The  defendant,  on  the  trial  of  the  issue,  had  no  proof,  except  of 
the  execution  of  the  bonds  in  the  course  of  an  illegal  intimacy  be- 
tween the  parties  and  a  continuation  thereof  afterwards  up  to  the 
death  of  the  testator,  together  with  an  admission  by  Winefred  that 
they  were  not  executed  for  any  debt  due  to  her ;  and  obviously  in 
such  state  of  the  proof  the  jury  could  not  have  done  more  than 
have  a  suspicion  or  conjecture,  whether  the  bonds  were  executed 
as  a  gift,  or  for  past  cohabitation,  or  wholly  or  in  part  for  future 
cohabitation. 

The  rule  is  well  settled  that  if  there  be  no  evidence,  or  if  the 
evidence  be  so  slight  as  not  reasonably  to  warrant  the  inference 
of  the  fact  in  issue,  or  furnish  more  than  materials  for  a  mere 
conjecture,  the  court  will  not  leave  the  issue  to  be  passed  on  by 
the  jury,  but  rule  that  there  is  no  evidence  to  be  submitted  to  their 
consideration,  and  direct  a  verdict  against  that  party  on  whom  the 
burden  of  proof  is.  State  v.  Waller,  80  N.  C,  501,  State  v.  Pat- 
terson, 78  N.  C,  470;  Sutton  v.  Madre,  47  N.  C,  320;  Cobb  v. 
Fogalman,  23  N.  C,  440. 

In  our  opinion,  therefore,  the  judge  properly  held  that  there  was 
no  evidence  of  the  illegal  or  immoral  consideration  alleged,  and 
in  so  doino-  he  committed  no  error.  Affirmed. 


See  also  Burton  v.  Belvin,  142—151;  Clark  Cont.  300;  15  Am.  &  Eng. 
Encvc,  959-963.  and  notes:  1  Page  Cont.,  sec.  400;  9  Cyc,  516;  Chateau 
v.  Singla.  114  Cal.,  91.  45  Pac,  1015,  55  A.  S.  R.,  63.  33  L.  R.  A.,  750; 
Pollock  Cont.,  410;  6  R.  C.  L„  716. 


414  FORMATION    OF    CONTRACT. 

7.     Agreements  tending  to  fraud  or  breach  of  trust. 

(162)  CATON  v.  STEWART, 

76  N.   C,  357—1877. 

Civil  action  on  contract.  Plaintiff  was  the  owner  of  a  distillery 
and  the  defendant  was  the  government  storekeeper  at  the  same. 
Upon  the  plaintiff's  saying  that  he  could  not  run  the  distillery 
longer  because  he  was  not  making  any  profit,  the  defendant  prom- 
ised to  pay  him  $25  a  month  for  a  specified  time,  if  he  would  con- 
tinue to  run  so  that  he  could  retain  his  position  and  pay  as  an  offi- 
cer. There  was  no  intention  to  defraud  the  government,  nor  was 
the  government  defrauded.  The  defendant  failed  to  pay  part  of 
what  was  agreed.  There  was  judgment  for  the  plaintiff,  and  de- 
fendant appealed. 

Pearson,  C.  J.  Prisoner  feeds  the  watch  dog  and  the  dog  fon- 
dles upon  the  prisoner.  There  is  no  use  in  keeping  the  dog  on 
watch  longer.  So  in  our  case,  as  soon  as  the  distiller  became  a 
prisoner  of  the  storekeeper  and  the  storekeeper  agreed  "to  divide 
profits,"  there  was  no  use  in  having  such  a  storekeeper,  and  the 
policy  of  the  government  in  providing  "storekeepers"  at  high 
wages  was  thereby  completely   frustrated. 

Bv  this  agreement  the  storekeeper  was  "led  into  temptation," 
for  he  could  not  deal  hard,  that  is,  "watch  closely"  his  prisoner 
and  dependent,  because  their  mutual  interest  required  the  distillery 
should  be  kept  in  operation. 

The  distiller  was  led  into  temptation  to  defraud  the  government, 
for  he  had  an  assurance  that  his  operations  would  not  be  watched 
very  closely.  Had  this  arrangement  been  made  known  to  the 
revenue  officer  it  would  have  been  his  duty  instantly  to  discharge 
the  storekeeper. 

The  transaction  as  nearly  approaches  "bribery  and  corruption" 
as  can  well  be  imagined. 

If  the  storekeeper  had  agreed  to  receive  of  the  distiller  $25  a 
month  out  of  his  profits  it  would  have  been  a  case  of  bribery. 
Here  the  storekeeper  agrees  to  pay  the  distiller  $25  a  month  out 
of  bis  wages  in  order  to  induce  him  to  continue  his  operations, 
and  the  corruption  consists  in  the  fact  that  the  distiller  was  there- 
by assured  thai  he  would  not  be  closely  watched,  thus  defeating 
the  policy  of  the  Act  of  Congress  in  the  regulations  for  the  ap- 
pointment of  storekeepers  at  high  wages  and  detailed  instructions 
to  watch  the  operations  of  distillers. 

Whenever  parties  enter  into  an  arrangement  whereby  the  policy 
of  the  law  is  defeated,  they  are   in   pari  delicto,  and  the  law  will 


ILLEGAL    C()N TRACTS. 


415 


not  aid  either  party.     See  the  cases  cited  in  the  brief  of   Mr.   Mc- 
Corkle.  counsel  for  defendant. 

There  is  error.  Judgment  below  reversed  and  upon  the  facts 
agreed  judgment  that  defendant  go  without  day  and  recover  his 
costs. 

(163)  SNIPES  v.  WINST<  >\\ 

126  N.  G,  374.  35  S.  E.,  610,  78  A.  S.  R..  666—1900. 

Faircloth,  C.  J.  The  Board  of  Aldermen  of  the  city  of  Win- 
ston on  March  1,  1898,  elected  the  plaintiff  a  "street  boss,"  and 
contracted  to  pay  him  $50  per  month  for  six  months.  His  duties 
were  to  superintend,  construct  and  repair  the  streets,  and  to  keep 
in  order  the  sewerage  system  of  the  city.  At  the  time  of  said 
election  and  contract,  the  plaintiff  was  a  member  of  the  Board  of 
Aldermen,  and  participated  in  the  meeting  at  which  he  was  elected. 

A  new  Board  was  elected  and  inducted  into  office  on  May  1, 
1898,  when  the  plaintiff  was  discharged  and  paid  for  the  services 
then  rendered.  He  now  sues  for  the  balance  specified  in  the  con- 
tract for  the  next  succeeding  four  months.  His  Honor  held,  upon 
these  facts,  that  the  plaintiff  could  not  recover,  and  rendered  judg- 
ment for  the  defendant. 

The  Board  of  Aldermen,  of  which  the  plaintiff  was  a  member, 
was  the  agent  of  the  city,  and  its  duty  was  absolute  loyalty  to  the 
best  interests  of  its  principal.  The  plaintiff  was  interested  in  ob- 
taining the  best  possible  contract  from  himself  and  his  associates 
on  the  Board.  There  was  then  antagonism  between  his  duty  to  the 
city  and  his  personal  individual  interest  in  making  said  contract. 

it  is  against  public  policy  to  permit  such  contracts  to  be  en- 
forced. It  would  be  unsafe  for  the  plaintiff,  acting  as  employer, 
to  become  himself  by  the  same  bargain,  an  employee.  Smith  v. 
Albany,  61  N.  Y.,  444,  is  a  case  in  point.  The  plaintiff,  being  a 
member  of  the  common  council,  contracted  with  the  Board  to  fur- 
nish horses  and  carriages  for  the  procession  celebrating  4  July, 
which  the  council  had  in  charge.  It  was  held  that  he  could  not 
recover.  Story  on  Agency  well  states  the  principle:  "It  may  be 
correctly  said  with  reference  to  Christian  morals  that  no  man 
can  faithfully  serve  two  masters  whose  interests  are  in  conflict. 
If  then  the  seller  were  permitted  as  the  agent  of  another  to  be- 
come the  purchaser,  his  duty  to  his  principal  and  his  own  interest 
would  stand  in  direct  opposition  to  each  other  ;  and  thus  a  temp- 
tation, perhaps  in  many  cases  too  strong  for  resistance  by  men  of 
feeble  morals  or  hackneyed  in  the  common  devices  of  worldly 
business,  would  be  held  out  which  would  betray  them  into  gross 
misconduct,  and  even  into  crime.  It  is  to  interpose  a  preventive 
check  against  such  temptations  and  seductions  that  a  positive  pro- 


416  FORMATION    OF    CONTRACT. 

hibition  has  been  found  to  be  the  soundest  policy,  encouraged  by 
the  purest  principles  of  Christianity.  This  doctrine  is  well  settled 
at  law.  And  it  is  by  no  means  necessary  in  cases  of  this  sort 
that  the  agent  should  make  any  advantage  by  the  bargain. 
Whether  he  has  or  not,  the  bargain  is  without  any  obligation  to 
bind  the  principal." 

This  principle  can  not  be  questioned,  and  experience  has  shown 
its  wisdom.  Common  reasoning  declares  this  principle  to  be  sound, 
and  the  public  is  entitled  to  have  it  strictly  enforced  against  every 
public  official.  In  obedience  to  this  reasoning  and  upon  these  au- 
thorities we  hold  that  the  contract  under  consideration  is  void  and 
unenforceable. 

All  agreements,  the  necessary  effect  of  which  is  to  place  a  person  under 
influences  and  offer  him  a  temptation  which  may  injuriously  affect  the 
rights  of  third  persons,  are  opposed  to  puhlic  policy.  Clark  Cont.,  301. 
This  includes  all  the  relations  of  trust  and  confidence  referred  to  under 
Fraud  and  Undue  Influence,  supra.  An  agreement  between  certain  stock- 
holders of  a  corporation  to  "pool"  their  stock  for  the  purpose  of  voting. 
Harvey  v.  Improvement  Co.,  118—693;  an  agreement  between  two  admin- 
istrators that  one  shall  manage  the  business  and  be  responsible.  Wilson  v. 
Lineberger,  94 — 641  ;  inducing  servants  to  break  contracts.  Revisal.  3365, 
3374 ;  Morgan  v.  Smith,  77—37 ;  Haskins  v.  Royster,  70—601 ;  county,  city 
or  town  officers  can  not  speculate  in  claims  in  county  or  city  claims. 
Revisal,  3575;  State  v.  Garland,  134—749;  officers  of  corporation  can  not 
speculate  in  claims  against  the  company.  McDonald  v.  Haughton,  70—393: 
contract  of  officer  of  county,  city  or  town,  under  such  authority,  for  his 
own  benefit.  Revisal,  3572;  public  school  officers  furnishing  supplies.  Re- 
visal. 3833,  3835 ;  employing  tenants  in  violation  of  their  contracts.  Re- 
visal. 3366,  3367.  See  15  Am.  &  Eng.  Encyc,  945-949,  and  notes;  1  Page 
Cont.,  sees.  406-408;  Clark  Cont.,  301:  9  Cyc,  493:  6  R.  C.  L..  719.  739. 
Rridgers  v.  Staton,  150—216;  Sheppard  v.  Power  Co.,  150—776;  Davidson 
v.  Guilford.  152—436;  Bd.  of  Comrs.  Tippecanoe  v.  Mitchell,  131  Ind., 
370,  30  X.  E.,  409,  15  L.  R.  A.,  521  ;  Spearman  v.  Texarkana,  58  Ark.,  348, 
24  S.  \\\,  883,  22  L.  R.  A.,  855. 

8.  Agreements  in   derogation   of  marriage  relation. 

(164)    OVERMAN  v.  CLEMMONS, 

19   N.   C.   185—1836. 

Action  of  debt  upon  a  single  bond,  for  the  payment  of  the  sum 
of  $5,000.  The  defendant,  among  other  pleas,  pleaded  "non  est 
faction;"  that  the  bond  was  obtained  by  fraud;  and  specially, 
"that  the  bond  was  given  by  James  Clemmons,  the  defendant's 
testator,  to  the  plaintiff,  in  consideration  of  the  plaintiff's  using 
his  influence  with  Mrs.  Esther  Hargrave,  to  procure  a  marriage 
between  the  said  James  Clemmons  and  the  said  Esther  Har- 
grave." The  defendant  offered  evidence  to  show  that  the  bond 
was  a  marriage-brocage  contract,  and  plaintiff  objected,  on  the 
ground  that  the  defense  was  not  available  in  law,  but  could  only 
be  made  in  equity. 


ILLEGAL,    CONTRACTS.  417 

There  was  a  verdict  and  judgment  for  the  defendant,  and  plain- 
tiff appealed. 

Gaston,  J.   (after  discussing  the  practice  in  regard  to  the  gen- 
eral  issue   and   special   plea).      The   main   question   in   dispute   is, 
whether  the  consideration  on  which  this  instrument  was  executed, 
not  appearing  on  the   face   of   it,   but   alleged  by   plea   as   matter 
dehors  the  instrument,  and   found  to  be  true,   does  in  law  avoid 
the  instrument.     Contracts  promising  rewards  to  a  person,  in  order 
to  obtain  the  exertion  of  any  influence  which  he  may  possess  over 
one  of  the  parties  to  a  contemplated  marriage,  to  bring  about  the 
marriage,   and  bonds   entered  into   to   secure   the   performance   of 
such  contracts,  have,  for  more  than  a  century  back,  been  declared 
void   in   the   courts   of   equity;  and   under   the   name  of   marriage- 
brocage  agreements,  and  marriage-brocage  bonds,  constitute  a  well- 
known    subject   of   the   jurisdiction   of    such   courts.      It    was   not, 
however,  until  the  case  of  Potter  v.  Hale,  or  Potter  v.  Read   (as 
it  is  indifferently  called),  and  then  after  much  litigation  and  dif- 
ference  of   opinion,   that  this   doctrine   was   authoritatively   estab- 
lished.    In  that  case,  such  a  bond  was  ordered  to  be  delivered  and 
canceled,  by  the  Master  of  the  Rolls;  his  decree  was  reversed  on 
appeal,  by  Lord  Chancellor  Somers  ;  but  on  appeal  to  the  House 
of  Lords,'  the  decree  of  reversal  was  itself  reversed,  and  the  orig- 
inal  decree   affirmed.      It   is  not   strange,   as   the  jurisdiction   over 
such  bonds  was  first  effectually  asserted  in  a  court  of  equity,  that 
most  of  the  cases  subsequently  occurring  on  the  same  subject,  and 
to  be  found  in  the  books,  were  brought  in  a  court  of  equity.     But 
after  the  principle  of  these  adjudications  was  perfectly  settled,  it 
could  not  but  be  that  the  same  principle  would  be  asserted  in  a 
court  of  law,  wherever  the  forms  of  legal  proceedings  gave  occa- 
sion for  applying  it.     These  engagements  had  been  denounced,  not 
because  of  the  imposition  or  oppression  practiced  upon  one  of  the 
parties  to  them,  but  because  of  their  repugnancy  to  public  policy. 
They  were  condemned  as  mischievous  to  the  community,  inasmuch 
as   they   encouraged   hireling   matchmakers,   invaded   the   peace   of 
families,  controlled  the  freedom  of  choice,  and  produced  unequal 
and   unhappy  marriages.      So   unequivocally   had   their   condemna- 
tion rested  upon  the  ground  of  public  mischief,  that  it  was  held 
that  they  did  not  admit  of  subsequent  confirmation  by  the  party 
aggrieved;  he  could  not  give  them  validity,  for  the  common  weal 
forbids  them.     Shirley  v.  Martin,  3  P.  Wms.,  74,  n.  1.     It  can  not 
be  doubted,   therefore,   since  the  conclusive   establishment  of   this 
principle,  that  if  an  action  is  brought  at  law,  to  recover  damages 
for  the  breach  of  a  covenant  or  promise  to  exert  this   forbidden 
influence — or    an    action    to    recover    money    upon    an    assumpsit, 

founded   on   such   illegal   consideration — or   an   action   on   a   bond. 


418  FORMATION    OF    CONTRACT. 

with  condition  expressing  this  illegal  purpose — in  all  these  cases, 
the  court  of  law  must  pronounce  the  undertaking,  the  considera- 
tion, and  the  condition,  against  law,  and  turn  the  plaintiff  out  of 
court.  The  first  object  of  all  law  is  the  public  good;  and  no  court 
will  enforce  private  engagements,  which  it  judicially  sees  are  re- 
pugnant to  the  public  good.  Bx  turpi  causa  non  oritur  actio. 
These  positions  seem  to  be  clearly  laid  down  by  the  elementary 
writers,  and  are  sanctioned  by  the  decisions  to  which  they  refer. 
1  Chitty  Pleading,  511,  ct  seq.;  Com.  on  Cont,  Pt.  1,  chap.  3,  p. 
62;  2  Thomas  Coke,  24;  Mitchell  v.  Reynolds,  1  P.  Wms,  181; 
Lowe  v.  Peers,  4  Bur.,  2225.  They  are  recognized  by  Lord  Hard- 
wicke  in  Smith  v.  Aykewell,  3  Atkins,  566,  who  upon  a  motion  for 
injunction  to  restrain  the  defendant  from  bringing  an  action  on  a 
promissory  note,  given  by  the  plaintiff  for  £2000,  which  was 
charged  by  the  bill,  and  that  charge  supported  by  affidavit,  to  have 
been  given  on  an  undertaking  to  procure  him  a  marriage  with  a 
lady — or  to  restrain  the  defendant  from  endorsing  or  assigning 
the  note,  made  the  order  to  restrain  the  defendant  from  so  doing, 
but  would  not  make  the  order  to  prevent  him  from  proceeding  at 
law — evidently  because  by  endorsing  the  note,  the  plaintiff  might 
be  shut  out  from  his  defense ;  but  in  an  action  by  the  payee,  the 
defense  would  be  as  effectual  at  law  as  in  equity. 

But  it  might  well  have  been  questioned,  whether  on  a  bond  sim- 
ply for  the  payment  of  money,  it  was  competent  for  a  defendant 
to  allege  by  plea,  that  the  consideration  of  such  bond  was  illegal, 
because  of  repugnance  to  public  policy,  and  thereby  avoid  the 
bond.  This  was  at  one  time  a  much  vexed  question,  and  accounts 
for  the  observation  made  by  Lord  Talbot,  in  Law  v.  Law,  3  P. 
Wms.,  394,  that  marriage-brocage  bonds  were  good  at  law.  It 
must  not,  however,  be  regarded  as  one  completely  settled.  The 
leading  case  on  the  subject,  the  authority  of  which  has  never  been 
questioned  either  in  England  or  in  this  country,  is  that  of  Collins 
v.  Blantern,  2  Wilson,  347.  This  case  distinctly  holds,  that  a 
contract  to  tempt  a  man  to  transgress  the  law — to  do  that  which 
is  injurious  to  the  community,  is  void  by  the  common  law ;  and 
that  when  a  bond  is  for  the  payment  of  a  sum  of  money,  the 
obligor  may  show  by  plea,  that  the  payment  was  to  be  made  on  a 
vicious  consideration — vicious  either  on  common  law  principles,  or 
because  of  statutory  enactments  ;  and  that  this  shown,  the  writing- 
obligatory  is  to  be  adjudged  void.  The  authority  of  Collins  v. 
Blantern  was  acknowledged  in  the  strongest  terms,  by  the  former 
Supreme  Court  of  this  State,  in  Cameron  v.  McFarland,  4  N.  C, 
299,  who,  in  conformity  to  it,  held  that  the  common  law  does  not 
sanction  any  obligation,  founded  upon  a  consideration  which  con- 
travenes its  general   policy.     This   impresses  upon  the  transaction 


ILLEGAL    CONTRACTS.  419 

an  inherent  defect,  which  can  not  be  removed  by  the  most  delib- 
erate consent  of  the  parties,  or  the  utmost  solemnity  of  external 
form.  The  principle  has  been  invariably  since  acknowledged  in 
the  English  cases,  down  to  the  present  day.  [The  decision  here 
quotes  from  several  English  cases.]  On  full  consideration,  then, 
of  this  question,  we  feel  ourselves  warranted  and  bound  to  decide, 
that  the  matter  specially  pleaded  by  the  defendant  could  be  right- 
fully pleaded  to  this  action,  and  being  found  to  be  true,  the  plain- 
tiff's action  was  barred,  and  the  defendant  entitled  to  judgment. 

As  to  marriage-brocage  contracts,  see  generally,  Clark  Cont,  302;  15 
Am.  &  Eng.  Encvc,  954;  1  Page  Cont.,  sees.  424,  425;  9  Cvc.  518:  2  Par- 
sons Cont,  74;  6  R.  C.  L.,  769;  Duvall  v.  Wellman,  124  N.  Y.,  156;  Her- 
moun  v.  Charlesworth    (1905),  2  K.   B.,   123,  3  Br.  R.  C,  629. 

An  agreement  between  the  husband  and  one  who  had  enticed  his  wife 
away,  that  the  latter  should  keep  her  and  support  her,  is  void.  Barbee  v. 
Armstead,  32 — 530.  Conditions  in  restraint  of  marriage  are  invalid,  unless 
they  are  reasonable,  and  do  not  unduly  interfere  with  the  freedom  of 
choice ;  and  they  must  be  definite  and  certain.  Watts  v.  Griffin,  137 — 
p.  577  (that  one  should  not  marry  "a  common  woman").  In  re  Miller,  159 — 
126;  Lowe  v.  Doremus,  84  N.  J.'  L.,  658,  87  Atl.,  458,  49  L.  R.  A.  (N.  S.), 
633;  Crowder-Jones  v.  Sullivan.  9  Ont.  L.  R.,  27,  4  Br.  R.  C,  64;  Lowe  v. 
Peers,  4  Burr.,  2225,  6  E.  R.  C.  347.  A  promise  to  marry  made  by  one 
alreadv  married  is  void  if  known  to  the  other  partv.  Wilson  v.  Carnlev, 
1  Br.  R.   C,  901. 

(165)  PIERCE  v.  COBB,    . 

161   X.  C.  300,  77  S.  E,  350.  44  L.  R.  A.    (N.   S.),  379—1913. 

This  action  was  brought  on  two  notes,  one  for  $500,  and  the 
other  for  $1,000.  On  the  back  of  the  notes,  at  the  time  they  were 
executed,  was  the  following:  "It  is  fully  understood  and  agreed 
that  this  note  shall  not  become  due  nor  collectible  in  any  event 
until  Mrs.  Ruth  Cobb  shall  have  obtained  from  her  husband,  the 
said  B.  P.  Cobb,  in  a  court  of  competent  jurisdiction,  a  complete 
and  absolute  divorce  from  the  bonds  of  matrimony,  and  shall  pre- 
sent the  said  B.  P.  Cobb  a  duly  certified  copy  of  the  decree  grant- 
ing same ;  this  being  the  consideration  for  which  this  note  is  given. 
If  the  said  Ruth  Cobb  shall  fail  to  secure  said  divorce  within  at 
least  six  months  from  10  June,  1911,  then  this  note  shall  be  null 
and  void.  And  the  payees  herein,  in  accepting  this  note,  agree  to 
the  conditions  above  set  out."  There  was  a  judgment  of  nonsuit 
and  plaintiff  appealed. 

Walker,  T.  .  .  .  The  nonsuit  was  properly  entered.  No  contract 
which  is  against  good  morals  or  the  public  policy  of  the  State  will 
be  enforced  by  its  courts.  If  the  consideration  upon  which  it  is 
based  is  illegal,  the  courts  will  leave  the  parties  where  it  found 
them,  and  will  lend  their  aid  to  neither  of  the  parties.  The  law 
will  give  no  sanction  to  a  transaction  which  involves  the  violation 


420  FORMATION    OF    CONTRACT. 

of  its  principles,  nor  will  it  afford  a  remedy  to  compel  either  of 
the  parties  to  perform  its  obligation.  (The  court  here  quotes 
from  Edwards  v.  Goldsboro,  141  N.  C,  at  p.  72,  reported  ante, 
156,  and  cases  cited  therein.)  If  the  object  of  a  contract  is  to 
divorce  man  and  wife,  the  agreement  is  against  public  policy  and 
void.  The  reason  of  this  rule  is  that  the  law  views  with  repug- 
nance all  contracts,  the  purpose  or  direct  tendency  of  which,  as 
gathered  from  its  terms,  is  to  dissolve  the  marriage  tie,  because 
of  its  regard  for  virtue,  the  good  order  of  society,  the  welfare  of 
the  children  as  the  fruit  of  the  union,  and  the  peculiar  sanctity  of 
the  marital  relation.  The  husband  and  wife  can  not  do  by  their 
consent  what  the  law  forbids  to  be  done  except  by  the  legislative 
will,  and  then  only  in  the  way  and  by  the  method  authorized. 
"The  inducement  of  a  wife  to  sue  for  a  divorce  by  a  promise  on 
the  part  of  the  husband  to  remunerate  her  for  it,  or  for  a  hus- 
band and  wife  to  agree  that  one  of  them  shall  bring  a  suit  for  a 
divorce  and  the  other  shall  not  defend,  is  against  the  law,  which 
recognizes  and  upholds  the  sanctity  of  marriage,  and  is  void.  The 
same  is  true  of  an  agreement  after  a  divorce  has  been  granted, 
that  the  husband  will  pay  the  wife  money  if  she  will  not  move  for 
a  new  trial,  or,  where  the  divorce  has  been  wrongfully  granted, 
that  the  parties  will  not  disturb  it.  And  an  agreement  not  to  sue 
or  make  claim  for  alimony  has  been  held  void.  A  promise  to 
marry  made  by  a  man  already  married,  to  take  effect  when  he  has 
obtained  a  divorce  from  his  present  wife,  is  illegal  and^void."  9 
Cyc,  519-520.  All  this  will  be  found  fully  discussed  in  the  books, 
and  especially  in  the  one  just  cited.  It  is  such  familiar  learning 
that  we  need  not  make  further  comment  upon  it.  Archbell  v. 
Archbell,  158  N.  C,  408.  The  remaining  question  is,  whether  this 
contract  is  within  the  principle  and  the  denunciation  of  the  law. 
We  think  it  will  so  appear  by  an  examination  of  the  indorsement 
on  the  notes.     .     .     .  Affirmed. 

(166)   ARCHBELL  v.  ARCHBELL, 

158  X.   C,  408,  74   S.   E.,  327,   Ann.   Cas.,   1913  D,   261—1912. 

This  was  an  action  by  the  wife  for  divorce  and  alimony,  and 
the  defendant  set  up  a  deed  of  separation,  fixing  the  wife's  prop- 
erty rights  in  bar  of  any  claim  for  alimony.  The  court  held  that 
this  deed  was  void,  rendered  a  decree  for  alimony,  and  defendant 
apperded. 

HOKE,  J.  In  Collins  v.  Collins,  62  N.  C,  153,  the  court  made 
definite  decision  "that  articles  of  separation  between  husband  and 
wife,  whether  entered  into  before  or  after  separation,  were  against 
law   and    public   policy   and   therefore   void."      Since   that   decision 


ILLEGAL,    CONTRACTS.  421 

was  rendered  in  1867,  our  statutes  upon  "Marriage  and  .Marriage 
Settlements  and  Contracts  of  Married  Women,"  as  entitled  in  The 
Code  of  1883  and  contained  with  amendments  in  Revisal  1905,  ch. 
51,  have  made  such  distinct  recognition  of  deeds  of  this  character, 
more  especially  in  Revisal,  sees.  2116,  2108,  2107,  etc.,  that  we  are 
constrained  to  hold  that  public  policy  with  us  is  no  longer  peremp- 
tory on  this  question,  and  that  under  certain  conditions  these  deeds 
are  not  void  as  a  matter  of  law.  This  change  in  our  public  pol- 
icy, which  has  been  not  inaptly  termed  and  held  synonymous  with 
the  "manifested  will  of  the  State"  (25  Arkansas,  p.  634),  has 
been  already  recognized  in  several  of  our  decisions,  as  in  Ellett 
v.  Ellett,  157  N.  C,  161;  Smith  v.  King,  107  N.  C,  273;  Sparks 
v.  Sparks,  94  N.  C,  527.  And  while  there  are  some  differences 
in  the  matter  of  form  and  in  the  conditions  requisite  to  their 
validity  and  their  effect  when  executed,  the  general  proposition  as 
to  the  validity  of  these  deeds,  in  so  far  certainly  as  they  concern 
property  rights,  is  in  accord  with  that  long  established  in  England 
(Hill  v.  Hill,  I  H.  L.  Cases,  1847  and  48,  553,  and  notes  to  Sta- 
pleton  v.  Stapleton,  White  and  Tudor's  Leading  Cases  in  Equity, 
Part  II,  vol.  2,  pp.  1675,  1697,  1698),  and  which  has  generally 
prevailed  with  the  courts  in  this  country  (Walker  v.  Walker,  76 
U.  S.,  743;  Commonwealth  v.  Thomas  Richards,  131  Pa.  St.,  209; 
Cary  v.  Mackey,  82  Me.,  516;  Aspinwall  v.  Aspinwall,  49  N.  J. 
Equity),  all  of  them,  so  far  as  examined,  except  in  New  Hamp- 
shire, Hill  v.  Hill,  74  New  Hampshire,  288;  Foote  v.  Nickerson, 
70  New  Hampshire,  496.     .     .     . 

From  a  consideration  of  the  authorities,  we  take  it  as  established 
that  articles  or  deeds  of  separation  are  permissible  where  the  sep- 
aration has  already  taken  place  or  immediately  follows  ;  but  that 
agreements  looking  to  a  future  separation  of  husband  and  wife 
will  not  be  sustained,  and  from  the  apparent  weight  of  opinion  it 
seems  in  making  such  agreements,  under  the  circumstances  indi- 
cated, the  parties  must  be  moved  to  it  by  adequate  reasons,  and 
not  from  mere  "mutual  volition  or  caprice,"  under  circumstances 
of  such  character  as  to  "render  it  reasonably  necessary  to  the 
health  or  haopiness  of  the  one  or  the  other,"  a  position  well  stated 
in  a  case  from  Montana  as  follows :  "An  agreement  between  hus- 
band and  wife  providing  for  a  separation,  an  adjustment  of  their 
respective  interests  in  property  and  for  the  future  support  and 
maintenance  of  the  wife,  is  valid  only  when  it  is  to  take  effect  at 
once  and  is  immediately  complied  with,  and  when  the  marital  rela- 
tions are  of  such  a  character  as  to  render  a  separation  necessary 
for  the  health  or  happiness  of  one  or  the  other.  Mere  willingness 
to  live  apart  is  not  enough,  neither  will  the  agreement  be  enforced 
when   it   is  the  result   of   mutual  caprice  or  reckless   disregard  of 


422  FORMATION    OF    CONTRACT. 

marital  obligations;  neither  will  such  an  agreement  be  enforced 
when  it  is  to  be  used  as  a  means  to  facilitate  a  divorce."  "Held, 
accordingly,  a  demurrer  to  the  complaint  was  properly  sustained, 
where  the  complaint  alleges  the  agreement  to  live  apart,  the  mu- 
tual obligations  thereunder,  and  the  breach  of  the  contract  by  the 
husband,  but  neither  the  agreement  nor  the  complaint  contains  any 
statement  of  facts  showing  the  necessity  or  cause  for  such  separa- 
tion." 19  Montana,  115.  This  case  and  the  principle  it  sustains 
is  referred  to  with  approval  in  a  full  and  learned  note  to  Baum 
v.  Baum,  109  Wis.,  47,  and  reported  in  83  American  St.  Reports 
at  pages  854-866.  The  note  in  question,  however,  refers  to  an 
opinion  by  Sanbom,  ].,  in  Daniel  v.  Benedict,  97  Fed.  Rep.,  367 
and  369,  as  a  "well-considered  case,"  and  in  which  a  contrary  view 
is  taken,  the  case  holding,  among  other  things,  that  the  relations 
existing  between  husband  and  wife  as  justifying  a  deed  of  this 
kind  must  be  left  to  the  determination  of  the  parties  interested, 
and  that  the  "courts  can  not  inquire  into  the  sufficiency  of  the 
reasons  as  affecting  the  validity  of  the  agreement." 

It  may  be  that  our  statutes,  2107,  2108,  hereinafter  more  par- 
ticularly referred  to,  resolve  this  question  in  favor  of  the  Federal 
decision,  and  the  difference  appearing  in  these  cases  is  not  perhaps 
of  the  first  importance,  as  it  will  be  a  very  rare  occurrence  when 
a  deed  of  the  kind  is  made  without  adequate  reason  moving  the 
parties — a  condition  assuredly  present  in  the  case  before  us. 

It  is  further  established  that  if  the  parties  resume  the  conjugal 
relations  the  agreement  will  be  rescinded.  This  has  been  directly 
held  with  us  in  Smith  v.  King,  107  N.  C,  273,  and  is  in  accord 
with  the  weight  of  authority.  Zerminer  v.  Settle,  124  N.  Y.,  37; 
Tiffany  on  Persons  and  Domestic  Relations,  168.  Again  it  is  held, 
"That  such  an  agreement  must  be  reasonable,  just  and  fair  to  the 
wife,  having  due  regard  to  the  conditions  and  circumstances  of 
the  parties  at  the  time  when  made."  Garver  v.  Miller,  16  Ohio 
State,  528;  Hutton  v.  Hutton,  3  Pa.  St.,  100.  The  authorities  also 
hold  that  these  agreements,  even  when  valid,  do  not  affect  the 
right  of  the  parties  to  sue  for  a  divorce  for  causes  occurring  either 
before  or  after  they  are  entered.  Bailey  v.  Bailey,  127  N.  C 
474;  notes  to  Baum  v.  Baum,  83  Am.  St.,  873.  And  while  the 
American  courts  hold  that  deeds  of  separation  are  so  far  imper- 
fect obligations  that  they  will  not  be  specifically  enforced  in  that 
feature  which  contemplates  or  provides  for  the  separation  of  the 
parties  (Aspinwall  v.  Aspinwall,  49  N.  J.  Eq.,  supra),  when  a  suit 
for  divorce  is  entered  and  the  same  is  obtained,  the  agreement,  if 
otherwise  valid  and  in  so  far  as  it  affects  the  property  rights  in- 
volved, should  be  respected  by  the  decree.  Galusha  v.  Galusha, 
116  N.  Y.,  635.     On  the  record,  therefore,  we  could  not,  as   for- 


ILLEGAL    CONTRACTS.  423 

merly,  declare  the  deed  void  in  law  as  against  the  present  public 
policy  of  the  State,  and  if  the  matter  were  presented  only  in  that 
aspect,  we  would  feel  constrained  to  uphold  the  deed,  or  in  any 
event  remand  the  case  for  a  fuller  rinding  as  to  whether  the  in- 
strument in  question  was  a  fair  and  just  arrangement.  We  are  of 
opinion,  however,  that  the  judgment  of  the  lower  court  should  be 
sustained  for  the  reason  on  which  His  Honor,  no  doubt,  acted, 
that  the  deed  in  question  is  not  executed  in  the  form  and  manner 
required  by  our  law  to  make  it  a  binding  agreement.  (That  it 
was  not  in  compliance  with  Revisal  2107,  2108.)      .     .     . 

No  error. 

Agreements  in  regard  to  divorce  are  invalid.  Revisal,  1563;  6_  R.  C.  L., 
772;  9  Cyc,  519.  As  to  separation  agreements,  see  9  Cyc,  520;  Cart- 
wright  v.  Cartwright.  3  De  G.  M.  &  G.,  982.  6  E.  R.  C,  368;  6  R.  C.  L.  771. 

Agreements  in  derogation  of  parental  relation.  There  is  "an  ntter  want 
of  authority  on  the  part  of  a  parent,  whether  father  or  mother,  to  sell  a 
child,  and  for  a  selfish  consideration  commit  it  to  the  keeping  of  another." 
/;;  re  Lewis,  88—31  :  this  does  not  interfere  with  apprenticing  and  adop- 
tion under  the  statute.     See  also  1   Page  Cont.,  426-429. 

9.  Contracts  in   restraint   of  trade. 

(167)   COWAN  v.  FAIRBROTHER, 
118  X.  C,  406,  24  S.  E..  212,  33  L.  R.  A..  829,  54  A.  S.  R.,  733-1896. 

Civil  action  for  an  injunction  to  restrain  defendant  from  violat- 
ing contract.  The  defendant  sold  his  paper,  the  Durham  Globe, 
to  one  Jenkins  for  $3,500,  and  in  the  contract  agreed  that  neither 
he  nor  his  wife  should  edit,  print  or  conduct  a  newspaper  or  mag- 
azine nor  be  connected  with  one  published  anywhere  in  North 
Carolina  for  a  period  of  ten  years  from  January,  1894,  without 
the  consent  of  the  purchaser  or  his  assigns.  Jenkins  transferred 
the  contract  to  George  W.  Watts,  and  Watts  transferred  a  half 
interest  to  B.  N.  Duke,  and  the  plaintiff  holds  under  them. 

The  defendant  purchased  the  Durham  Recorder,  and  was  pre- 
paring to  edit  it  after  July,  1895,  and  this  application  was  made 
to  restrain  him  from  doing  so.  The  defendant  admitted  the  exe- 
cution of  the  agreement,  but  alleged  the  publication  of  the  other 
paper  had  been  abandoned ;  that  Jenkins  really  made  the  trade 
for  Watts,  who  was  hostile  to  the  defendant's  interests,  and  de- 
fendant would  not  have  sold  to  him  at  all ;  that  the  said  contract 
tended  to  restrict  the  freedom  of  the  press  ;  that  it  was  in  restraint 
of  trade  and  contrary  to  public  policy. 

The  judge  granted  a  restraining  order  until  the  hearing,  and 
defendant  appealed. 

Avery,  J.  Where  a  person  acquires  a  reputation  for  skill  and 
learning   in   his   profession   as   a   lawyer   or  a   physician,   he   often 


424  FORMATION    OF    CONTRACT. 

creates  an  intangible  but  valuable  property  by  winning  the  confi- 
dence of  his  patrons  and  securing  immunity  from  successful  com- 
petition for  their  business.     So,  where  an  editor,  by  reason  of  his 
style,   his   power,   his   pathos,   his   humor,   his   learning  or   of    any 
gift    or    attainment,    attracts    subscribers    solely   by    such    personal 
qualities,  he  imparts  a  peculiar  value  to  the  good  will  and  prop- 
erty of  a  newspaper  which  goes  with  him,  to  his  injury,  when  he 
leaves  it  and  lends  the  talents  and  accomplishments  that  have  given 
it  patronage  and  popularity  to  a  rival  journal  in  the  same  vicinity. 
Where  he   owns  the   press   and   plant   the   enhanced   value   so   im- 
parted by  him  becomes  an  element  of  his  property  with  the  same 
incidental  power  to  dispose  of  it  as  attaches  to  any  other  of  his 
acquisitions  which  has  a  market  value.     Beal  v.  Chase,  31   Mich., 
at  p.  529.     But  it  is  not  like  other  property  which  ordinarily  passes 
by   delivery   or   assignment   to  the   purchaser.      Neither   an   editor, 
a   lawyer  nor  a   physician   can   transfer   to   another   his    style,   his 
learning  or  his  manners.     Either,  however,  can  add  to  the  chances 
of  success  and  profit  of  another  who  embarks  in  the  same  busi- 
ness in  the  same  field  by  withdrawing  as  a  competitor.      So  that 
the  one  sells  and  the  other  buys  something  valuable,  and  the  policy 
of   the   law   limits  the   right   to   enter  into   such   contracts   of   sale 
only  to  the  extent  that  they  are  held  to  injure  the  public  by  re- 
straining trade.     The  one  sells  his  prospective  patronage  and  the 
other  buys  the  right  to  compete  with  all  others   for  it  and  to  be 
protected'  against  competition   from  his  vendor.     The  law  intends 
that  the  one  shall  have  the  lawful  authority  to  dispose  of  his  right 
to  compete,  but  restricts  his  power  of  disposition  territorially  so  as 
to  make  it  only  coextensive  with  the  right  to  protection  on  the  part 
of  the  purchaser.     To  the  extent  that  the  contract  covers  territory 
from  which  the  vendor  has  derived  and  will  probably  in  the  future 
derive  no  profit  or  patronage,  it  needlessly  deprives  the  public  of 
the  benefit  of  open  competition  in  useful  business  and  of  the  serv- 
ices of  him  who  sells  without  any  possible  advantage  to  his  suc- 
cessor.    When  the  reason  upon  which  a  law  is  founded  ceases,  the 
rule  itself  ceases  to  operate.     The  older  cases  in  which  the  courts 
attempted  to   fix   arbitrarily  geographical   bounds   beyond   which   a 
contract  to  forbear  from  competition  would  not  be  enforced,  have 
given  way  to  the  more  rational  idea  of  making  every  case  depend- 
ent upon  the  surrounding  circumstances,  showing  the  extent,  as  to 
time  and  territory,  of  the  protection  needed.     Nordenfelt   v.   The 
Maxim,   etc..  Co.,  appeal  cases,   1894    ( L.  R.),   535;  Hitchcock   v. 
Cocken,  6  Ad.  &  E.  (En.  C.  L.  R.),  at  p.  106;  Hernshoff  v.  Bon- 
tenean.  17  R.  I.  Rep..  3;  Benefit  Co.  v.  Hospital  Co.,  11  L.  R.  A., 
437;  Beal  v.  Chase,  31   Mich..  490:  Tallis  v.  Tallis,  1   El.  &  Bl., 
391    (18  E.  L.   &  E.,   151);  Pregon   Co.   v.   Minsor,  20  Wallace, 


ILLEGAL,    CONTRACTS.  425 

64;    10  Am.   &  Eng.   Enc,  947,   note;   3   Am.   &   Eng.    Enc,  885, 
note;  Gibbs  v.  Gas  Co.,  130  U.  S.,  396/ 

Where  the  nature  of  the  business  was  such  that  complete  protec- 
tion could  not  be  otherwise  afforded,  the  restraint  upon  the  right 
to  compete  has  been  held  good  in  one  or  more  instances  where  it 
extended  throughout  the  world,  and  in  other  cases  where  it  ap- 
plied to  a  State  or  to  a  boundary,  including  several  States. 

In  Nordenfelt  v.  Maxim,  etc.,  supra,  the  plaintiff  had  covenanted 
with  the  respondent  company  "not  to  engage,  except  on  behalf  of 
such  company,  either  directly  or  indirectly,  in  the  trade  or  busi- 
ness of  a  manufacturer  of  guns  or  ammunition,  or  in  any  business 
competing  or  liable  to  compete  in  any  way  with  that  carried  on 
by  such  company."  On  appeal  to  the  House  of  Lords  the  case  of 
Horner  v.  Graves,  7  Bing.,  743,  was  cited  and  the  validity  of  such 
contracts  was  declared  to  depend  upon  the  question  "whether  the 
restraint  is  such  only  as  to  afford  a  fair  protection  to  the  interest 
of  the  party  in  favor  of  whom  it  is  given,  and  not  so  large  as  to 
interfere  with  the  interests  of  the  public."  Lord  Herschell,  L.  C, 
said  further:  "Whatever  restraint  is  larger  than  the  necessary 
protection  of  the  party  can  be  of  no  benefit  to  either.  It  can  only 
be  oppressive,  and  if  oppressive  it  is  in  the  eye  of  the  law  unrea- 
sonable. The  tendency  in  later  cases  has  certainly  been  to  allow 
a  restriction  in  point  of  space,  which  formerly  would  have  been 
thought  unreasonable,  manifestly  because  of  the  improved  means 
of  communication.  A  radius  of  150  or  even  200  miles  has  not 
been  held  to  be  too  much  in  some  cases.  For  the  same  reason  I 
think  a  restriction  applying  to  the  entire  kingdom  may  in  some 
cases  be  required  and  justifiable." 

In  Beal  v.  Chase,  supra,  at  p.  530,  Judge  Campbell  quotes  with 
approval  the  language  of  Chief  Justice  Chapman  in  Morse  v. 
Morse,  103  Mass.,  77,  where  he  said:  "In  this  country  there  are 
periodical  publications  that  have  wide  circulation,  and  it  is  obvi- 
ous that  a  purchaser  of  the  proprietorship  can  not  afford  to  pay 
the  full  value  unless  he  can  have  from  the  vendor  a  valid  restric- 
tion against  competition,  which  restriction  shall  be  extensive  as  the 
interest  requires,  though  it  may  cover  the  whole  of  a  State  or  the 
whole  of  a  country.  The  same  would  be  true  as  to  some  books. 
For  example,  the  author  of  a  popular  school  book  could  not  sell 
its  proprietorship  for  its  full  value  unless  he  could  bind  himself 
not  to  prepare  another  book  which  should  be  used  in  competition 
with  it." 

The  rule  which  concedes  the  right  to  make  the  area  in  which 
the  vendor  is  to  be  restricted  from  competition  as  broad  as  is  nec- 
essary to  afford  ample  protection  to  the  purchaser,  is  subject  to 
the  qualification  that  no  agreement  will  be  upheld  which  is  injurious 


426  FORMATION    OF    CONTRACT. 

to  the  public  interest.  Nordenfelt  case,  supra,  at  p.  549.  There 
are  two  familiar  classes  of  contracts  that  will  in  no  event  be  en- 
forced because  contrary  to  public  policy,  and  these  constitute  ex- 
ceptions to  the  general  rule  governing  sales  of  the  right  of  compe- 
tition:  1.  A  quasi  public  corporation  can  not  disable  itself  by  con- 
tract from  performing  the  public  duties  which  it  has  undertaken 
to  discharge  in  consideration  of  the  privileges  granted  to  it.  Logan 
v.  R.  R.,  116  N.  C,  940;  Gibbs  v.  Gas  Co.,  130  U.  S.,  410. 
2.  Any  agreement  in  contravention  of  the  common  or  statute  law 
generally,  or  any  combination  "among  those  engaged  in  a  business 
impressed  with  a  public  or  quasi  public  character  which  is  mani- 
festly prejudicial  to  the  public  interest,  is  void  as  against  public 
policy,  and  upon  the  same  principle  no  agreement  tending  to  create 
a  monopoly  or  designed  to  utterly  destroy  fair  competition  amongst 
public  carriers  will  be  enforced."  State  v.  Oil  Co.,  34  Am.  St. 
Rep.,  541  (49  Ohio  St.,  137)  ;  Emery  v.  Candle  Co.,  21  Am.  St. 
Rep.,  819,  and  note  (47  Ohio  St.,  320)  ;  Hooker  v.  Vandewater, 
47  Am.  Dec,  258  (4  Denio,  349). 

But  the  contract  of  which  the  plaintiff  claims  the  benefit  as  as- 
signee through  John  Jenkins,  is  one  which  in  no  way  affects  the 
public,  unless  it  unreasonably  deprives  the  people  of  the  State  of 
the  benefit  of  the  industry  of  the  defendants,  or  unnecessarily  pre- 
cludes them  from  supporting  their  family  by  pursuing  their  oc- 
cupation. Oregon  Nav.  v.  Windsor,  20  Walk,  at  p.  68.  The  stip- 
ulation was  that  the  defendant  Fairbrother  "would  not  edit,  print 
or  conduct  a  newspaper,  nor  be  in  any  wise  connected  with  one 
printed  anywhere  in  the  State  of  North  Carolina,  and  that  for  a 
like  period  Mrs.  Fairbrother  shall  not  edit,  print  or  conduct  a 
newspaper  or  magazine,  nor  be  in  any  wise  connected  with  one 
anywhere  in  the  county  of  Durham,  said  State,  without  the  con- 
sent of  said  purchaser  or  his  assignees."  This  contract  was  as- 
signed to  Watts  and  Duke  by  Jenkins,  and  the  assignees  who  own 
the  property  have  leased  to  the  plaintiff  Cowan,  who  is  now  pub- 
lishing the  Globe  newspaper,  and  seeks  to  enjoin  the  defendant 
Al.  Fairbrother  and  the  other  defendant  from  publishing  another 
newspaper  in  Durham,  as  it  is  conceded  they  propose  to  do  if  the 
court  should  not  interfere.  Since  the  use  of  steam,  space  has  been 
in  a  measure  annihilated,  and  it  is  a  fact,  of  which  the  courts  may 
take  notice,  that  a  newspaper  may  be  carried  by  mail  to  the  most 
remote  parts  of  the  State  within  from  24  to  48  hours.  So  that,  if 
there  has  ever  been  a  time  in  the  history  of  the  State  when  an 
editor  could  not  acquire  a  reputation  for  excellence  in  some  par- 
ticular line  of  that  business,  which  would  enable  him  to  give  a 
paper,  with  which  he  might  be  connected,  popularity  throughout 
its  limits,  there  is  no  reason  to  doubt  now  that  one,  who  would  rid 


ILLEGAL,    CONTRACTS.  427 

himself  of  a  competitor  in  that  business,  is  not  describing  an  un- 
reasonable boundary  when  he  extends  the  restriction  against  com- 
petition to  the  State  lines.     No  better  proof  of  that  fact  could  be 
adduced  than  is  set   forth  in  the  uncontradicted  affidavits  of   the 
defendants    themselves,    that    they    injured    their    successor,    John 
Jenkins,  in  the  conduct  of  the  Durham  Globe,  after  the  contract 
was  entered  into,  by  publishing  a  paper  in  Lynchburg,  Va.     If  the 
right  to  compete  for  popularity  as  an  editor  may  become  valuable 
and  pass  by  a  contract  of  sale,  like  the  good  will  of  a  newspaper, 
it  follows  necessarily  as  a  logical  sequence  that  the  purchaser  may 
sell  and  transfer  to  a  third  party  the  right  to  occupy  a  field  va- 
cated by  a  dangerous  rival,  and  the  transaction  would  be  held  valid 
for  the  same  reason  that  renders  the  original  sale  enforceable.     3 
Am.  &  Eng.  Enc,  885,  and  note,  with  authorities  collected;  Beal 
v.  Chase,  supra;  Perkins  v.  Clay,  54  N.  H.,  518;  Hedge  v.  Lowe, 
47  Iowa,  13*7;  Campers  v.  Rochester,  56  Pa.  St.,  194.     It  is  set- 
tled law  that  such  contracts,  in  restraint  of   trade,   as   are  valid, 
may  be  enforced  in  equity,  like  other  contracts,  and  that  breaches 
of  them  will  be  restrained  by  injunction,  on  the  ground  that  no 
other  remedy  is  adequate.     3  Am.   &  Eng.   Enc,  885,   and  note; 
Thompson  v.  Andrus,  73  Mich.,  557.     A  covenant  on  the  part  of 
a  publisher  not  to  publish  a  paper  is  considered  in  the  same  light 
as  a  contract  to  sell  a  particular  business,  or  the  right  to  practice 
a  profession  in  a  given  area,  and  courts  of  equity  will  interpose  in 
order  to  prevent  a  violation  of  the  one  as  well  as  of  the  other. 
10  Am.  &  Eng.  Enc,  947,  and  note. 

The  plaintiff's  lessors  swear  that  they  had  never  abandoned  at 
any  time  the  purpose  to  continue  the  publication  of  the  newspaper, 
and  that  during  the  suspension  they  kept  up  continual  negotia- 
tions with  that  end  in  view.  They  say  further  that  the  suspension 
was  prolonged  by  giving  an  option  to  one  with  whom  they  had 
good  reason  to  expect  they  might  conclude  a  contract  to  again 
issue  it  regularly. 

A  review  of  all  the  cases,  where  -it  has  been  held  that  parties 
have  abandoned  rights,  will  furnish  no  analogy  to  support  the  con- 
tention that  the  benefit  of  a  contract,  like  that  which  is  the  sub- 
ject of  the  action,  must  be  deemed  in  law  abandoned  for  failure 
to  find  a  suitable  editor  for  so  short  a  time,  especially  where  it  ap- 
peared that  reasonably  diligent  efforts  were  being  made  to  have 
the  business  continued.  The  concealment  by  Jenkins  of  the  fact 
that  he  was  buying  for  another  was  not  per  se  a  fraudulent  act, 
and  there  is  no  allegation  on  the  part  of  the  defendants  that  he 
practiced  any  fraud  upon  them.  Fraud  can  not  be  inferred  from 
the  fact  of  buying  property  through  an  agent  who  is  instructed  to 
take  title  in  his  own  name.     If  the  defendants  had  set  up  a  state 


428  FORMATION    OF    CONTRACT. 

of  facts,  which  in  law  amounted  to  fraud,  and  had  asked  the  court 
to  rescind  the  contract  upon  the  principle  that  he  who  asks  equity 
must  do  equity,  they  would  have  been  required  to  offer  to  return 
the  money  received.  In  order  to  avail  themselves  of  that  remedy 
they  should  have  brought  suit  to  set  aside  the  agreement  upon  the 
discovery  of  the  fraud,  if  there  was  fraud,  and  should  have  of- 
fered to  place  the  purchaser  in  statu  quo.  Cal.,  etc.,  Co.  v.  Wright, 
8  Cal.,  585,  592. 

It  is  contended  for  defendants  that  the  contract  is  illegal  and 
void  because  it  is  in  contravention  of  the  provision  of  the  Consti- 
tution (Art.  I,  sec.  20),  which  guarantees  the  freedom  of  the  press. 
When  the  framers  of  our  Constitution  declared  that  the  freedom 
of  the  press  was  one  of  the  bulwarks  of  liberty,  and  therefore 
ought  never  to  be  restrained,  but  that  every  individual  should  be 
held  responsible  for  the  abuse  of  the  same,  they  entertained  no 
purpose  to  restrict  the  power  of  any  person  to  dispose  of  anything 
of  value,  which,  as  the  creature  of  his  own  mental  or  physical  ex- 
ertions, had  become  his  property.  This  right  is  as  much  a  funda- 
mental one  as  is  that  to  use  the  press  without  violation  of  reason- 
able laws  intended  to  protect  others  from  libel  and  slander.  In 
its  broadest  sense,  freedom  of  the  press  includes  not  only  the  ex- 
emption from  censorship,  but  security  against  laws  enacted  by  the 
legislative  department  of  the  government,  or  measures  resorted  to 
by  either  of  the  other  branches  for  the  purpose  of  stifling  just 
criticism  or  muzzling  public  opinion.  Black  Const.  Law,  pp.  472, 
473;  Cooley  Const.  Lim.,  pp.  517,  518;  Ordinaux  Const.  Leg.,  p. 
236,  et  seq.;  3  Story  Const.,  p.  731.  An  indefinite  number  of  au- 
thorities might  be  cited  to  show  the  universal  interpretation  placed 
upon  the  provision  in  the  Constitution  of  the  United  States  that 
the  freedom  of  the  press  shall  not  be  abridged,  and  upon  similar 
clauses  in  State  Constitutions.  It  has  never  been  held  anywhere 
that  these  provisions  could  be  made  engines  of  oppression  by  con- 
struing them  as  restrictions  upon  the  right  to  sell  anything  of 
value,  that  is  the  creature  of  one's  brain,  provided  society  would 
not  be  made  to  suffer  by  the  transaction.  Upon  a  review  of  all 
the  assignments  we  discover  no  error  in  the  rulings  below,  and  the 
judgment  is  therefore  Affirmed. 

The  same  rule  was  applied  to  stipulations  in  regard  to  time,  in  Kramer 
v.  Old,  119 — 1,  which  was  an  agreement  not  to  engage  in  the  milling  busi- 
ness  at  a  certain  place  after  a  certain  date ;  it  was  held  to  be  binding 
during  the  life  of  the  vendor,  and  his  taking  stock  in  another  milling 
company  was  a  violation.  Other  instances  of  similar  contracts :  Pho- 
tographer not  to  engage  in  business  for  ten  years.  Baumgarten  v.  Broad- 
away,  77 — 8;  druggist  not  to  engage  in  business  for  three  years,  and 
selling  his  stock  and  taking  a  mortgage  on  it  is  not  a  violation.  Reeves 
v.  Sprague,  114 — 647;  not  to  engage  in  livery  business  for  three  years, 
becoming  manager  of  the  business  for  the  wife  is  a  violation.  King  v. 
Fountain,   126 — 196:  or  to  manage  the  business   for  others.     Baker  v.   Cor- 


ILLEGAL    CONTRACTS.  429 

don,  86—116;  a  contract  not  to  practice  medicine  "in  the  town  of  Y  and 
the  surrounding  territory,''  was  enforced  as  to  the  town,  but  was  too  in- 
definite as  to  the  rest.  Hauser  v.  Harding,  126—295;  not  to  carry  on  a 
certain  business  "'in  any  territory  now  occupied  by  the  other  party,  or 
from  which  he  secures  his  patronage,"  is  void  for  uncertainty.  Shute  v. 
Heath,  131—281  ;  Faust  v.  Rohr,  166—187  (barber  shop)  ;  Diamond  Match 
Co.  v.  Roe'er,  106  X.  V.,  473,  60  A.  R.,  464:  Herreshoff  v.  Boutineau,  17 
R  I  3  33  A.  S.  R..  850,  8  L.  R.  A.,  469;  Xordenfelt  v.  Maxim-Xordenfelt 
Co.,  1894,  App.  Cas.,  535,  6  E.  R.  C,  393.  413  ;  Allen  Manfg.  Co.  v.  Murphy, 
22  Ont.  L.  R..  539.  20  Ann.  Cas.,  657. 

A  stipulation  on  the  face  of  a  check  that  it  will  not  be  paid  if  presented 
through  a  certain  bank,  is  valid  and  not  in  restraint  of  trade.  Bank  v. 
Bank,    118—783. 

An  instrument  in  which  the  grantor  has  '•given,  granted,  bargained  and 
sold  unto  X  and  his  executors  and  assigns  his  active  services,  as  a  servant, 
for  the  full  and  entire  term  of  five  year-,  and  the  full  and  entire  control 
of  his  person  and  labor  during  that  time,"  is  valid  as  a  contract  of  serv- 
ice, a  chose  in  action,  but  gives  no  property  in  the  person.  Phillips  v. 
Murphy.  49 — 45. 

For  contracts  in  restraint  of  trade  generally,  see  Clark  Cont..  305:  24 
Am  &  Eng.  Encvc,  842  et  seq.;  1  Page  Cont.,  sees.  373-382:  9  Cyc,  523: 
Pollock  Cont.,  467;  6  R.   C.  L.,  785. 

Restraint  upon  alienation. — Ever  since  the  statute  quia  emptores,  the 
right  of  alienation  has  been  considered  as  an  inseparable  incident  to  an 
estate  in  fee,  and  except  in  some  cases  where  the  restriction  is  only 
partial,  the  law  does  not  recognize  nor  enforce  any  condition  which  would 
directly  or  indirectly  limit  or  destroy  such  a  privilege— iniquum  est 
ingenuis  hominibus  non  esse  rerum  ahenationem.  Hardy  v.  Galloway, 
111— p.  523;  Pritchard  v.  Bailev,  113— p.  525:  Lattimer  v.  Waddell.  119— 
370;  Pardue  v.  Givens,  54—306:  Twitty  v.  Camp,  62—61:  Wool  v.  Fleet- 
wood, 136—460.  Parties  will  not  be  allowed  to  invent  new  modes  of 
holding  and  enjoying  property,  nor  to  impress  upon  land  a  peculiar  char- 
acter which  should  follow  it  into  all  hands  however  remote.  School  Com. 
v.  Kesler,  67— p.  447;  Blount  v.  Harvey,  51—186:  Dick  v.  Pitchford, 
21 — 480.  So  a  clause  in  a  deed  against  liability  for  debts  of  the 
grantee  is  void.  129— p.  55;  but  it  may  be  valid  in  compliance  with  the 
statute  for  spendthrift  trusts.  Revisal,  1588;  Mebane  v.  Mebane,  39 — 131; 
Vaughan  v.  Wise,  152—31  ;  Christmas  v.  W'inston,  152—48;  6  R.  C.  L.,  808. 
A  restraint  upon  alienation  was  imposed  in  giving  effect  to  separate  trust 
for  married  women.     Bisp.  Eq.,  sec.  104. 

Mortgages. — It  is  not  a  contravention  of  public  policy  for  a  vendee  or 
mortgagor,  where  no  improper  advantage  is  taken,  to  surrender  the  right 
to  the  title,  and  hold  as  tenant  of  the  vendor  or  mortgagee.  Taylor  v. 
Taylor,  112—27;  Crinkley  v.  Egerton,  113—454;  Jones  v.  Jones.  117—254. 
Mortgage  on  crops  is  restricted  to  the  crops  of  the  current  year;  to  extend 
it  further  is  against  public  policy.  "Political  economists  tell  us  that  even 
the  civilized  world  is  never  more  than  one  crop  ahead  of  starvation,  and 
countless  thousands  of  the  human  race  are  in  a  day's  march  of  it."  Clark, 
J.,  in  Loftin  v.  Hines,  107—360.  citing  Wooten  v.  Hill,  98—52;  Masten  v. 
Marlow.  65—595;  State  v.  Garris,  98—733;  Smith  v.  Coor,  104—139;  Tay- 
lor v.  Flodges.  105—344;  but  this  does  not  apply  to  other  future  interests. 
Brown   v.   bail.    117—41:   Williams   v.   Chapman,    118—943. 

Homestead. — Certain  contracts  have  been  declared  invalid,  as  against 
the  policy  of  the  law  as  to  homestead  and  personal  property  exemptions: 
as  a  provision  in  a  note  not  to  claim  such  exemptions.  Benson  v.  Speed. 
74_544:  Branch  v.  Tomlinson,  77—388.  So  as  to  conveyances  without  the 
joinder  of  the  wife ;  if  the  marriage  took  place  and  the  land  was  acquired 
before  1867,  the  husband  may  convey  it  without  the  joinder  of  the  wife, 
except  where  the  homestead  is  allotted.  Sutton  v.  Askew,  66—172;  Bruce 
v.  Strickland,  81—267:  Tenkins  v.  Jenkins.  82—208:  O'Kellv  v.  Williams. 
84—281;    Reeves    v.    Havnes.    88—310:    Gilmore    v.    Bright.    101— p.    386.      If 


430  FORMATION    OF    CONTRACT. 

the  marriage  has  taken  place  or  the  land  has  been  acquired  since  1867, 
the  husband  may  convey  subject  to  the  encumbrance  of  dower,  without 
the  joinder  of  the  wife,  unless  he  owes  debts  which  may  require  the 
allotment  of  the  homestead,  then  the  wife  must  join.  Hughes  v.  Hodges, 
102—236 ;  Canfield  v.  Owens,  130—641 ;  95—281 ;  but  see  Joyner  v.  Sugg, 
132 — 591,  and  Davenport  v.  Fleming,  154 — 291.  Mortgages  of  household 
and  kitchen  furniture  require  the  joinder  of  the  wife,  under  Revisal,  1041  ; 
Kelly  v.  Fleming.  116 — 133. 

10.    Combinations,   trusts   and   monopolies. 

(168)   CULP  v.  LOVE, 

127   X.   C,   457,   37   S.   E.,  476—1900. 

Fajrcloth,  C.  J.  The  plaintiff  demands  damages  for  breach 
of  contract.  The  defendants  deny  the  alleged  breach  of  contract, 
and  rely  upon  the  illegality  of  the  contract  as  their  defense.  It  is 
agreed  by  the  parties  that  at  the  time  the  contract  was  made  the 
plaintiff,  Culp,  was  the  agent  and  broker  of  the  Cumberland  Flour 
Mills  for  the  sale  of  their  flour,  and  the  defendants  were  agents 
and  brokers  for  the  Sweetwater  Flour  Mills  (located  in  Tennes- 
see), for  the  sale  of  their  flour,  and  that  the  flour  of  the  respective 
companies  were  competitive  brands  of  flour  in  the  territory  men- 
tioned in  the  contract.  In  the  contract,  the  plaintiff,  Culp,  for  a 
valuable  consideration,  agrees  with  Love  &  Son,  and  Love  &  Co., 
not  to  sell  meats,  lard,  and  oil  in  certain  territory,  including  sev- 
eral counties,  for  a  certain  number  of  months,  and  the  said  Love 
&  Son  and  Love  &  Co.  agreed  not  to  sell  flour  at  wholesale  in  the 
same  territory  and  for  the  same  period  of  time.  They  also  agree 
to  obtain  for  the  plaintiff,  Culp,  the  sale  of  the  Sweetwater  Mill 
Company's  flour  at  all  the  towns  on  several  railroad  lines  for  the 
full  term  of  this  contract.  It  was  further  agreed  that  the  plaintiff 
is  not  to  neglect  the  sale  of  Cumberland  Mills  flour  for  that  of 
Sweetwater  Mills,  nor  "to  push  sale  of  said  Sweetwater  Mills 
flour  further  than  it  may  be  his  interest  to  do."  The  plaintiff 
also  agreed  to  divide  with  the  other  contracting  parties  his  broker- 
age on  sale  of  the  Sweetwater  Mills  flour  for  the  same  term  and 
in  the  same  territory.  The  parties  then  agreed  severally  to  forfeit 
and  pay  »$500  if  either  failed  to  perform  his  part  of  this  contract. 
It  appears  from  the  evidence  that  defendants  notified  the  Sweet- 
water Company  that  they  had  transferred  their  agency  to  sell  flour 
to  the  plaintiff,  but  did  not  inform  the  Sweetwater  Company  of 
the  true  nature  of  said  contract.  The  Sweetwater  Company  rec- 
ognized  the  transferred  agency  on  condition  that  the  plaintiff  han- 
dle its  goods  exclusively.  In  a  few  months  the  Sweetwater  Com- 
pany withdrew  plaintiff's  agency  to  sell  its  flour,  and  plaintiff  sues 
for  the  penally  and   damage.     At  the  close  of  the  plaintiff's  evi- 


ILLEGAL    CONTRACTS.  431 

dence,  His  Honor  held  that  plaintiff  could  not  recover.     Plaintiff 
took  a  nonsuit  and  appealed. 

Concealing  the  true  nature  of  the  contract  under  consideration 
was  a  fraud  on  the  Sweetwater  Company,  and  contrary  to  good 
morals,  and  the  combination  between  the  plaintiff  and  defendants 
to  suppress  and  destroy  competition  in  trade  in  the  necessaries  of 
life  was  an  imposition  on  the  people  and  against  public  policy. 
The  agreement  was  therefore  illegal,  and  no  court  of  justice  will 
lend  its  aid  to  either  party  to  enforce  such  an  executory  contract. 

The  objection  of  a  party  to  an  illegal  contract  does  not  sound 
well  in  his  mouth.     It  is  not  for  his  sake  that  the  objection  is  al- 
lowed, but  it  is  founded  in  general  principles  of  policy,  of  which 
he  has  the  advantage  by  the  accident  of  being  sued  by  his  confed- 
erate in  wrongdoing.     "An  executory  contract,  the  consideration  of 
which  is  contra  bonos  mores,  or  against  the  public  policy,  or  laws 
of  the  State,  or  in  fraud  of  the  State,  or  of  any  third  person,  can 
not  be  enforced  in  a  court  of  justice."     Blythe  v.  Lovinggood,  24 
N.    C,   20.      In   Armstrong  v.   Toler,    11    Wheat.,   258,    the   court 
spoke  in  these  words :     "The  principle  of  the  rule  is,  that  no  man 
ought  to  be  heard  in  a  court  of  justice  who  seeks  to   enforce  a 
contract   founded   in,   or  arising  out   of,   moral   or  political   turpi- 
tude."    In  Story's  Ag.,  sec.  348,  this  clear  distinction  is  laid  down : 
"The  distinction  between  the  cases  where  a  recovery  can  be  had 
and  the  cases  where  a  recovery  can  not  be  had  of  money  connected 
with  illegal  transactions,  which  seems  now  best  supported,  is  this : 
That  wherever  the  party  seeking  to  recover  is  obliged  to  make  out 
his  case  by  showing  the  illegal  contract,  or  transaction,  or  where 
it   appears  that   he  was   privy  to  the  original   illegal   contract,   or 
transaction,  then  he  is  not  entitled  to  recover  any  advance  made 
by  him  connected  with  that  contract.     But  when  the  advances  have 
been  made  upon  a  new  contract  remotely  connected  with  the  orig- 
inal illegal  contract,  or  transaction,  but  the  title  of  the  party  to 
recover  is  not  dependent  upon  that  contract,  but  his  case  may  be 
proved  without  reference  to  it,  then  he  is  entitled  to  recover."     In 
the  case  before  us,  it  is  the  illegal  contract  itself  between  the  par- 
ties that  we  are  asked  to  enforce.     The  proof  shows  that  the  de- 
fendants agreed  not  to  compete  with  plaintiff  in  selling  flour,  leav- 
ing him  to  demand  of  the  public  his  own  price,  and  he  agreeing 
not  to  sell  meats,  lards,  and  oil  in  their  chosen  territory,  and  to 
divide  with  them  his  brokerage  on  sales  of  the  Sweetwater  flour, 
and  the  court  is  called  on  by  one  party  to  make  the  other  party 
pay  money  for  failing  to  perform  his  part  of  this  unlawful  trans- 
action.    A  and  B  agree  to  rob  C.     A  does  the  work ;  B  stands  off 
and  simply  looks  on,  and  then  B  calls  on  the  court  to  make  A  di- 
vide the  spoils;  or,  if  they  have  stipulated  that  either  one  failing 


432  FORMATION    OF    CONTRACT. 

to  do  his  part  of  the  nefarious  work,  shall  forfeit  and  pay  to  the 
other  $500.  Has  any  court  of  justice  ever  responded  favorably  to 
such  request  by  either  party?  We  do  not  mean  to  classify  these 
parties  with  robbers,  or  to  characterize  their  transaction  other  than 
according  to  the  facts  which  they  have  brought  out  in  their  case. 
The  intention  of  the  parties  is  immaterial.  They  may  have  thought 
it  permissible  to  make  a  sharp  bargain  at  the  expense  of  the  pub- 
lic and  injury  to  a  third  party,  but  we  can  not  agree  with,  or  help 
them,  to  do  so.    King  v.  Winants,  71  N.  C,  469.  Affirmed. 

Trusts  were  denned  and  forbidden  in  Acts  1889,  ch.  374;  1899,  ch.  666; 
1911  ch  167;.  1913,  ch.  41;  Smith  v.  Ice  Co.,  159—151;  Fashion  Co.  v.  Grant, 
165-1453;  State  v.  Craft,  --  N.  C,  -,  83  S.  E,  772.  As  to  trusts,  etc  affect- 
ing interstate  commerce,  see  Sherman  Act,  1890,  26  Stat.,  29;  U.  b.  v. 
Freight  Asso  166  U.  S.,  290;  Northern  Securities  Case,  193  U.  S.,  197; 
Standard  Oil  Case,  221  U.  S.,  1,  34  L.  R.  A.  (N.  S.),  834,  Ann.  Cas.,  1912  D, 
734;  American  Tobacco  Co.  Case,  221  U.  S.,  106;  20  Am.  &  Eng.  Encyc 
844;  64  L.  R.  A.,  689;  Clark  Cont.,  312;  Page  Cont.,  432;  8  Cyc,  634;  27 
Cyc,  819. 

"Perpetuities  and  monopolies  are  contrary  to  the  genius  of  a  tree  btate 
and  ought  not  to  be  allowed."  Const.,  Art.  1,  sec.  31,  construed  in  Thrift  v. 
Elizabeth  City,  122—31;  McRee  v.  R.  R.,  47—186;  Simonton  v.  Lanier,  71- 
498-  Toll  Bridge  v.  Comrs.,  81—491;  Toll  Bridge  v.  Flowers,  110—386; 
Robinson  v.  Lamb,  126—492;  Spease  Ferry,  138—219. 

Combinations    or    consolidation    of    railroads    may    be    allowed    by    statute. 
Spencer  v.  R.  R.,  137—107. 

Labor  unions,  etc.— Capital  either  in  the  form  of  money  or  skill  may 
combine  for  lawful  purposes;  where  it  seeks  to  effectuate  its  purpose  by 
means  of  violence  or  fraud,  or  by  such  means  conspires  to  prevent  any  per- 
son from  conducting  his  business  in  his  own  way,  or  from  employing  such 
persons  as  he  may  prefer,  or  by  preventing  any  persons  from  being  employed 
the  courts  will  interfere.  Van  Pelt's  Case,  136—633;  65  L.  R.  A.,  342;  69 
L.  R.  A.,  90. 

11.  Exemption   from  liability   for   negligence. 

(169)    CAPEHART  v.  R.  R., 

81  N.  C,  438—1879. 

Civil  action  for  damages  to  cotton  shipped  over  defendant's  road 
and  alleged  to  have  been  damaged  by  defendant's  negligence.  The 
defendant  denied  negligence  and  set  up  as  further  defense  a  spe- 
cial stipulation  in  the  bill  of  lading  "that  in  case  any  claim  should 
arise  from  any  damage  or  loss  of  articles  mentioned  in  this  receipt 
while  in  transitu,  or  before  delivery,  the  extent  of  such  damage  or 
loss  shall  be  adjusted  in  the  presence  of  an  officer  of  the  line  be- 
fore the  same  be  removed  from  the  station,  and  such  claim  must 
be  sent  within  thirty  days  after  the  damage  or  loss  occurred,  to 
James  McCarrick,  Trace  Agent,  Portsmouth,  Virginia,  who  has 
authority  to  settle  such  claims."  The  jury  found  that  the  cotton 
was  damaged  by  the  negligence  of  the  defendant  to  the  amount  of 
$1,225,  but  that  the  stipulation  above  mentioned  had  not  been  com- 


ILLEGAL    CONTRACTS.  433 

plied  with.     There  was  a  judgment  for  the  defendant,  and  plain- 
tiff appealed. 

Ashe,  J.  The  only  question  presented  for  our  consideration  in 
this  case  is,  did  the  court  below  render  the  proper  judgment  upon 
the  finding  of  the  jury?  We  think  it  did  not,  and  that  the  judg- 
ment should  have  been  in  favor  of  the  plaintiff. 

The  jury  found  by  their  verdict  the  facts  that  the  cotton  when 
delivered  to  the  defendant  was  in  good  order;  that  when  delivered 
to  plaintiff's  consignee  it  was  wet,  muddy  and  damaged ;  that  it 
was  damaged  while  in  the  possession  of  the  defendant  by  its  neg- 
ligence or  that  of  its  agents  or  servants;  that  the  damage  to  the 
cotton  was  not  contributed  to  in  any  part  by  the  negligence  of  the 
plaintiff,  and  that  the  amount  of  the  damage  to  the  cotton  was 
twelve  hundred  and  twenty-five  dollars. 

Upon  the  finding  of  these  facts,  the  plaintiff  was  clearly  entitled 
to  a  verdict  for  the  amount  of  the  damages  ascertained  by  the 
jury.  The  defendant  was  a  common  carrier  and  liable  for  all 
damages  of  goods  entrusted  to  it  for  transportation,  during  the 
carriage,  from  whatsoever  cause,  except  from  the  act  of  God  or 
the  public  enemy.  It  was  an  insurer  and  was  liable  without  any 
negligence  on  its  part. 

But  the  jury  also  found  that  there  was  a  special  contract,  and 
the  defendant  insisted,  and  so  the  court  held,  that  as  the  plaintiff 
did  not  comply  with  the  conditions  of  the  contract,  it  was  exon- 
erated from  all  liability  for  the  damages  resulting  from  its  negli- 
gence. The  right  of  a  common  carrier  to  limit  or  diminish  his 
general  liability  by  a  special  contract  has  given  rise  to  as  much,  if 
not  more,  discussion  and  contrariety  of  opinion,  than  any  other 
question  of  law.  Most  of  the  more  recent  cases  held  that  common 
carriers  may  restrict  their  general  liability  by  notice  brought  home 
to  the  knowledge  of  the  owner  of  the  goods,  before  or  at  the  time 
of  the  delivery  to  the  carrier,  if  assented  to  by  the  owner.  2  Red- 
field  on  Railways,  100.  And  it  has  been  held  that  the  receipt  of 
the  bill  of  lading  by  the  shipper  or  his  agent  with  restrictive  stipu- 
lations annexed,  is  presumptive  evidence  of  assent ;  though  on  this 
there  has  been  a  diversity  of  opinion,  as  upon  every  other  branch 
of  this  subject ;  some  of  the  courts  going  so  far  as  to  hold  that  a 
bill  of  lading  with  the  receipt  in  large  letters  and  the  stipulations 
in  small  print,  is  an  insufficient  notice.  However  this  may  be,  it 
is  certainly  a  mode  of  giving  notice  that  is  not  to  be  commended. 

The  jury  have  found  that  there  was  a  special  contract,  and  the 
inquiry  is,  what  effect  has  that  upon  the  general  liability  of  the 
defendant  as  a  common  carrier?  Has  the  plaintiff  lost  his  right 
of  action  against  the  defendant  by  reason  of  his  having  failed  to 
have  the  extent  of  the  damage  adjusted  in  presence  of  an  officer 


434  FORMATION    OF    CONTRACT. 

of  the  line  before  the  removal  of  the  cotton,  and  not  presenting  his 
claim  for  damages  within  thirty  days,  as  prescribed  in  the  stipula- 
tions? The  leading  case  on  this  subject  is  Nav.  Co.  v.  Bank,  6 
How.  (U.  S.),  344,  which  Mr.  Redfield,  in  his  valuable  work  on 
the  law  of  railways  speaks  of,  as  giving  a  fair  exposition  of  the 
American  law  upon  the  subject.  In  that  case,  Mr.  Justice  Nelson 
said :  "The  special  agreement  in  this  case  under  which  the  goods 
were  shipped,  provided  that  they  should  be  conveyed  at  the  risk  of 
Harnden,  and  that  the  respondents  were  not  to  be  responsible  to 
him  or  his  employees  in  any  event  for  loss  or  damage.  The  lan- 
guage is  general  and  broad,  and  might  very  well  comprehend  every 
description  of  risk  incident  to  the  shipping.  But  we  think  it  would 
be  going  further  than  the  intent  of  the  parties  upon  any  fair  and 
reasonable  construction  of  the  agreement,  were  we  to  regard  it  as 
stipulating  for  wilful  misconduct,  gross  negligence,  or  want  of  or- 
dinary care.  .  .  .  Although  he  was  allowed  to  exempt  himself 
from  losses  arising  out  of  events  and  accidents,  against  which  he 
was  a  sort  of  insurer,  yet  as  he  had  undertaken  to  carry  the  goods 
from  one  place  to  another,  he  was  deemed  to  have  incurred  the 
same  degree  of  responsibility,  as  that  which  attaches  to  a  private 
person  engaged  casually  in  the  like  occupation,  and  was,  therefore, 
bound  to  use  ordinary  care  in  the  custody  of  the  goods  and  their 
delivery." 

To  the  same  effect  is  the  case  of  Bank  v.  Express  Co.,  93  U.  S., 
174,  which  was  a  case  where  the  bill  of  lading  had  stipulations  or 
conditions  attached  restricting  the  liability  of  the  company,  among 
which  was  one  "that  the  company  would  not  be  liable  for  any  such 
loss,  unless  the  claim  therefor  should  be  made  in  writing  at  this 
office  within  thirty  days  from  the  date,  in  a  statement  to  which 
this  receipt  shall  be  attached."  The  court  there  held  that  an  ex- 
ception in  its  bill  of  lading  that  the  express  company  is  not  to  be 
liable  in  any  manner  or  to  any  extent  for  any  loss,  damage  or  de- 
tention of  its  contents,  or  of  any  portion  thereof,  occasioned  by 
fire,  does  not  excuse  the  "company  from  liability  for  the  loss  of 
such  package  by  fire  if  caused  by  the  negligence  of  a  railroad  com- 
pany, to  which  the  former  had  confided  a  part  of  the  duty  it  had 
assumed.  Public  policy  demands  that  the  right  of  the  owner  to 
absolute  security  against  the  negligence  of  the  carrier  and  all  per- 
sons engaged  in  performing  his  duty,  shall  not  be  taken  away  by 
any  reservation  in  his  receipt,  or  by  any  arrangement  between 
them  and  the  performing  company. 

In  Wyld  v.  Pinkford,  8  M.  &  W.,  443.  the  Court  of  Exchequer 
decided  that  the  carrier,  notwithstanding  his  notice,  was  bound  to 
use  ordinary  care.  In  Bodenham  v.  Bennett,  4  Price,  31,  fol- 
lowed and  approved  by  Birkett  v.   Sillan,  2  B.  &  A.,  356,  it  was 


ILLEGAL    CONTRACTS.  435 

decided  that  notices  restricting  the  liability  of  a  common  carrier 
were  only  intended  to  exempt  carriers  from  extraordinary  events, 
and  were  not  meant  to  exempt  from  due  ordinary  care. 

We  might  cite  a  number  of  cases  in  the  courts  of  different 
States  of  this  country,  establishing  the  principle  that  a  common 
carrier  can  not  by  special  notice  or  contract  exempt  himself  from 
the  exercise  of  ordinary  care  and  prudence  in  the  carriage  of 
goods.  In  addition  to  those  already  cited,  we  refer  to  the  cases 
of  R.  R.  v.  Barldauff,  16  Penn.  St.,  67;  Dorr  v.  Nav.  Co.,  4 
Sandf.,  136;  Parsons  v.  Monteith,  13  Barb.,  353;  Bingham  v.  Rog- 
ers, W.  &  S,  495;  Jones  v.  Voorhees,  10  Ohio,  145;  School  Dist. 
v.  R.  R.,  102  Mass.,  552;  Story  on  Bailments,  sec.  571. 

But  we  are  not  without  authorities  in  our  own  State  maintain- 
ing the  same  doctrine.  This  court  held  in  the  case  of  Smith  v. 
R.  R.,  64  N.  C,  235,  "that  although  a  common  carrier  can  not  by 
a  general  notice  to  such  effect  free  itself  from  all  liability  for 
property  by  it  transported,  yet  by  notice  brought  to  the  knowledge 
of  the  owner  it  may  reasonably  qualify  its  liability  as  common  car- 
rier, and  in  such  case  it  will  remain  liable  for  want  of  ordinary 
care,  i.  c,  negligence."  And  to  the  same  effect  is  the  case  of 
Glenn  v.  R.  R.,  63  N.  C,  510. 

From  the  examination  of  the  authorities  on  this  subject,  we  con- 
clude that  a  common  carrier  can  not  by  special  notice  brought 
home  to  the  knowledge  of  the  owner  of  goods,  much  less  by  gen- 
eral notice,  nor  by  contract  even,  exonerate  himself  from  the  duty 
to  exercise  ordinary  care  and  prudence  in  the  transportation  of 
goods  ;  and  we  deduce  from  the  principles  enunciated  by  them  the 
following  propositions : 

1.  That  a  common  carrier  being  an  insurer  against  all  losses 
and  damages,  except  those  occurring  from  the  act  of  God  or  the 
public  enemy,  may  by  special  notice  brought  to  the  knowledge  of 
the  owner  of  the  goods  delivered  for  transportation,  or  by  con- 
tract, restrict  his  liability  as  an  insurer,  where  there  is  no  negli- 
gence on  his  part. 

2.  That  he  can  not  by  contract  even  limit  his  responsibility  for 
loss  or  damage  resulting  from  his  want  of  the  due  exercise  of  or- 
dinary care. 

And  now  that  railways  have  become  so  numerous,  and  as  car- 
riers have  absorbed  so  much  of  that  class  of  business  which  is  so 
important  to  our  increasing  commerce  and  the  more  frequent  in- 
tercourse of  our  people,  to  hold  a  different  doctrine  would  lead  to 
the  abolition  of  those  safeguards  of  life  and  property,  which  pub- 
lic policy  demands  shall  be  preserved  and  protected. 

The  jury  having  found  that  there  was  negligence  on  the  part  of 
defendant,  we  must  take  that  as  a  fact,  and  adhering  to  the  prin- 


436  FORMATION    OF    CONTRACT. 

ciples  established  in  the  cases  cited,  we  are  of  the  opinion  that  the 
defendant's  liability  for  damages  is  not  diminished  or  affected  in 
any  way  by  the  notice  or  contract  annexed  to  the  bill  of  lading,  not 
even  by  the  stipulation  that  the  damages  must  be  adjusted  before 
the  removal  of  the  goods  from  the  station  and  the  presentation  of 
the  claim  for  payment  within  thirty  days ;  for  the  stipulation  must 
be  reasonable;  and  we  do  not  think  it  is  reasonable  to  require  the 
consignees  of  a  carload  of  cotton  to  cut  into  the  bales  before  they 
are  received  to  ascertain  whether  they  have  been  seriously  dam- 
aged. "A  contract  restricting  the  responsibility  of  the  carrier  must 
be  reasonable  in  itself,  and  not  calculated  to  ensnare  or  defraud 
the  other  party.  A  contract  requiring  notice  of  losses  in  thirty  days 
is  not  reasonable."  Express  Co.  v.  Reagan,  22  Ind.,  21 ;  Express 
Co.  v.  Caperton,  44  Ala.,  101  ;  Place  v.  Express  Co.,  2  Hill,  19. 

Our  conclusion  is  that  the  judgment  rendered  in  the  court  below 
was  not  warranted  by  the  finding  of  the  jury.  There  is  error. 
Judgment  must  be  rendered  in  this  court  in  behalf  of  the  plaintiff 
for  the  amount  of  the  damages  assessed  by  the  jury. 

Error.  Reversed,  and  judgment  here. 

See  same  case.  77—355.  See  also  Phifer  v.  R.  R.,  88—388;  Mills  v.  R.  R., 
119 — 693;  Thomas  v.   R.   R..   131—590;   Kime  v.   R.   R.,   160—459. 

A  railroad  company  can  not  exempt  itself  from  liability  for  negligence 
even  for  one  injured  while  riding  on  an  unauthorized  pass.  McNeill  v.  R. 
R.,  132—510,  135—682;  or  in  case  of  a  clergyman's  permit,  with  a  provision 
that  the  holder  assumes  all  risk.  M  arable  v.  R.  R.,  132—557.  Where  the 
value  of  the  article  is  stated  in  the  bill  of  lading,  it  is  held  in  North  Carolina 
that  this  does  not  limit  the  liability  of  the  company  to  the  amount  specified 
where  the  loss  results  from  negligence.  Everett  v.  R.  R.,  138—68;  McCon- 
nell  v.  R.  R.,  144—87;  Stringfield  v.  R.  R.,  152—125;  Kissenger  v.  Fitzgerald, 
152—247;  Breeding  Asso.  v.  R.  R.,  152—345;  Harden  v.  R.  R.,  157—238;  Stehh 
v.  Express  Co.,  160—493 ;  Cooper  v.  R.  R.,  161—400 ;  Pace  Mule  Co.  v.  R.  R., 
160—215,  overruling  Jones  v.  R.  R.,  148—583,  and  Winslow  v.  R.  R.,  1^1 — 
250.  The  Pace  Mule  Co.  case  was  reversed  by  the  Supreme  Court  of  U.  S. 
in  234  U.  S.,  751,  as  to  interstate  shipments ;  see  Adams  Express  Co.  v.  Cron- 
inger,  226  U.  S.,  491 ;  Mo.,  etc.,  R.  R.  v.  Harriman,  227  U.  S.,  657.  The  ma- 
jority rule  seems  to  be  generally  in  favor  of  the  limitation.  Ballou  v.  Earle, 
17  R  I,  441,  22  Atl.,  1113,  14  L.  R.  A.,  433;  Lockwood's  case,  17  Wall.,  357; 
Hart  v.  Penn.  R.  R..  112  U.  S.,  331:  Penn.  R.  R.  v.  Hughes,  191  U.  S.,  477; 
Donlon  v.  So.  Pac.  R.  R.,  151  Cal.,  763,  12  Ann.  Cas.,  1133,  and  note. 

By  special  contract  and  for  valuable  consideration,  a  common  carrier  may 
limit  its  common  law  liability,  provided  such  limitations  are  reasonable:  and 
they  must  be  strictly  construed.  Gardner  v.  R.  R.,  127—293.  Unreasonable 
restrictions  :  Transportation  at  company's  convenience,  Branch  v.  R.  R..  88— 
573;  "subject  to  delay,"  Parker  v.  R.  R.,  133—335;  claim  for  damages  must 
be  made  in  thirty  davs,— hut  it  is  intimated  that  sixty  days  would  be  reason- 
able. Mfg.  Co.  v.  R.  R.,  128—280;  Cigar  Co.  v.  Express  Co.,  120—348: 
Watch  Case  Co.  v.  Express  Co.,  120—351  ;  an  agreement  that  as  a  condition 
precedent  to  plaintiff's  right  to  recover,  he  should  give  notice  to  the  company 
before  the  property  is  removed,  is  held  valid,  Selby  v.  R.  R.,  113 — p.  594:  but 
this  does  not  exempt  from  liability  for  negligence,  Hinkle  v.  R.  R.,  126— 
932 ;  a  condition  that  demand  for  damages  shall  he  made  in  writing  is  rea- 
sonable, but  compliance  may  lie  waived,  Wood  v.  R.  R.,  118 — 1056:  Kime  v. 
R.  R.,  153—398,  156—451:  Austin  v.  R.  R..  151—137:  Southerland  v.  R.  R, 
158—327;   Duvall  v.  R.  R..   167—24;   Forney  v.  R.   R.,   167—641;   reasonable 


ILLEGAL    CONTRACTS.  437 

time  for  shipment  is  five  days  under  the  statute,  McGowan  v.  R.  R.,  95 — 417. 
See  Revisal,  2632.  While  a  common  carrier  can  not  by  contract  exempt 
itself  from  liability  for  negligence,  it  may  make  a  contract  with  a  third  per- 
son to  indemnify  it  against  such  loss.  R.  R.  v.  Main,  132 — 445.  As  to  burden 
of  proof  in  case  of  special  contract  limiting  liability,  see  Mitchell  v.  R.  R., 
124—236. 

Injury  to  servant. — "It  would  seem  that  the  government  owes  it  to  the 
servant  of  a  carrier  to  give  to  him  the  same  protection  of  life  and  limb  as  to 
the  passenger,  by  declaring  void  an  agreement,  in  consideration  of  being  em- 
ployed, to  excuse  the  company  for  negligence  when  it  causes  death,  and  it  has 
been  so  held."  Mason  v.  R.  R.,  Ill— p.  498.  Under  the  State  Employers' 
Liability  Act,  Rev.  2646,  Acts  1913,  ch.  6,  and  the  Federal  Employers'  Lia- 
bility Act,  1908,  ch.  149,  35  Stat.  L.,  65,  a  contract  to  exempt  a  railroad  com- 
pany from  liability  for  injury  to  a  servant  is  void.  Where  compensation  has 
been  provided,  as  in  a  relief  department,  this  does  not  discharge  from  lia- 
bility, but  may  diminish  the  amount  of  the  recovery.  Barden  v.  R.  R.,  152 — 
318;  King  v.  R.  R..  157—44;  Burnett  v.  R.  R.,  163—186;  Nelson  v.  R.  R., 
157—194,  167—185;  Frank  v.  Newport  Min.  Co.,  148  Mich.,  637,  112  N.  \\  ., 
504,  11  L  R.  A.  (N.  S.),  182.  Whether  a  contract  exempting  from  liability 
from  negligence  will  be  valid  in  other  cases  where  the  service  is  not  affected 
by  a  duty  to  the  public,  is  not  clearly  settled.  In  Engine  Co.  v.  Paschal, 
151 — 27,  it  is  said  such  contracts  may  be  valid,  in  the  absence  of  fraud  or  bad 
faith  ;  while  in  other  cases  they  have  been  held  against  public  policy.  6  R. 
C.  L,  727,  729;  Johnston  v.  Fargo,  184  N.  Y.,  379,  11  N.  E.,  388,  7  L.  R.  A. 
(N.  S.),  537,  6  Ann.  Cas.,  1. 

Warehousemen  are  not  insurers,  as  are  common  carriers,  but  they  are 
liable  for  negligence,  notwithstanding  a  provision  to  the  contrary  in  their 
charter.     Motley  v.  Warehouse  Co.,  122 — 347. 

Telegraph  Company  is  liable  for  negligence,  and  a  condition  limiting 
liability  unless  the  message  is  repeated,  and  also  to  fifty  times  the  amount  paid 
for  the  message,  is  void.  Brown  v.  Telegraph  Co.,  Ill — 187  (overruling 
Lassiter  v.  Tel.  Co.,  89—336;  Pegram  v.  Tel.  Co.,  97—57;  Cannon  v.  Tel. 
Co.,  100—300;  Thompson  v.  Tel.  Co.,  107—449);  Sherrill  v.  Tel.  Co.,  116— 
655;  Williamson  v.  Tel.  Co.,  151—223;  Rhyne  v.  Tel.  Co.,  164—394;  Sykes 
v.  Tel.  Co.,  150—431;  Lytle  v.  Tel.  Co.,  165—504;  the  same  rule  applies  to 
all  public  service  corporations.     Turner  v.  Power  Co.,   154 — 131. 

Banks  receiving  checks  for  collection,  and  stipulating  that  items  outside 
of  the  home  town  are  remitted  at  owner's  risk  until  payment  is  received,  do 
not  thereby  exempt  themselves  from  liability  for  negligence.  Bank  v.  Floyd, 
142—187. 

Associated  lines  of  railroads. — As  to  their  liability  see  Phifer  v.  R.  R., 
89—311;  Phillips  v.  R.  R,  78—294;  Dixon  v.  R.  R.,  74—538;  Lindley 
v.  R.  R.,  88—547;  Wineberry  v.  R.  R.,  91—31;  Mills  v.  R.  R.  119— 
693 ;  Knott  v.  R.  R.,  98—73 ;  Charleston  v.  R.  R.,  143—43 ;  Meredith  v.  R.  R., 
137_478;  McConnell  v.  R.  R.,  163—504.  See  also  Hepburn  Act  and  Car- 
mack  Act,  Fed.  Stat.  Ann.,  1909,  Sup.,  273.  Exempting  from  negligence,  see  1 
Page  Cont.,  sees.  359-372;  9  Cvc,  543;  Clark  Cont.,  318;  5  Am.  &  Eng.  Encyc, 
308 ;  6  R.  C.  L..  727. 


438  FORMATION    OF    CONTRACT. 

Sec.  4.  Effect  of  illegality  and  remedies. 

1.  Divisible   and   indivisible    contracts. 

(170)   BRANNOCK  v.  BRANNOCK, 

32  X.  C,  428—1849. 

Action  of  ejectment.  The  plaintiff  claimed  the  land  under  a 
sheriff's  deed  in  execution  sale,  and  the  defendant  claimed  under 
a  deed  of  trust  executed  by  the  judgment  debtor  prior  to  the  judg- 
ment;  some  of  the  debts  secured  in  the  deed  were  usurious,  and 
others  were  valid.  There  was  a  judgment  for  the  defendant,  and 
plaintiff  appealed. 

Pearson,  J.  The  only  question  is,  whether  a  deed  of  trust  is 
void,  which  was  made  to  secure  several  debts  due  to  different  indi- 
viduals, some  of  which  debts  are  usurious.  It  is  not  void.  The 
estate  passed,  and  is  a  security  for  the  debts  not  tainted  with 
usury.     The  declarations  of  trust,  only  in  reference  to  the  usurious 

debts,  are  void. 

In  Shober  v.  Hauser,  20  N.  C,  222,  it  is  held  that  a  deed  of 
trust,  made  to  secure  a  usurious  debt,  is  void  ;  in  that  case  there 
was  but  one  debt  secured,  which  debt  being  usurious,  the  deed 
could  only  operate  as  an  "assurance  for  a  usurious  debt,"  and  was 
properly  held  to  be  void. 

But  in  this  case  there  are  several  debts  due  to  different  indi- 
viduals ;  some  of  them  are  not  tainted  with  usury,  and  are  in  no 
wise  connected  with  those  that  are.  The  operation  of  the  deed 
was  to  pass  the  legal  estate,  with  a  separate  declaration  of  trust, 
for  each  of  the  debts  therein  enumerated.  There  can  be  no  reason 
why  the  declaration  of  trust,  in  reference  to  one  debt,  may  not 
stand,  and  the  declaration  of  trust  in  reference  to  another  be  held 
void.  So  if  a  deed  contains  a  declaration  of  trust,  in  favor  of 
several  debts,  one  of  which  is  feigned,  and  there  be  no  connection 
or  combination  between  the  creditors,  to  whom  the  true  debts  are 
due,  and  the  grantor  or  person  for  whose  benefit  the  feigned  debt 
is  inserted,  there  can  be  no  reason  why  the  declaration  of  trust, 
in  favor  of  the  true  debts,  may  not  stand  and  the  feigned  debt  be 
treated  as  a  nullity. 

If  a  bond  secures  the  performance  of  several  covenants  or  con- 
ditions, some  of  which  are  legal  and  the  others  void,  it  is  valid, 
so  far  as  respects  the  conditions  that  are  legal,  provided  they  be 
separated  from  and  are  not  dependent  on  the  illegal.  But  if  a 
contract  be  made  on  several  considerations,  one  of  which  is  illegal, 
the  whole  contract  will  be  void.  The  difference  is,  that  every  part 
of  the  contract  is  induced  and  affected  by  the  illegal  consideration  ; 


ILLEGAL    CONTRACTS.  439 

whereas,  in  cases  where  the  consideration  is  tainted  by  no  illegality, 
but  some  of  the  debts  are  illegal,  the  illegality  of  such  as  are  bad 
does   not   communicate   itself   to   or   contaminate   those   which   are 
good,  except  where  from  some  peculiarity  in  the  contract  its  parts 
are  inseparable,  or  dependent  upon  one  another.     1  Smith's  Lead- 
ing Cases,   284,   note  to   Collins   v.    Blantern  and  the   cases   cited. 
Here  the  consideration   which   raised  the  use,   for  the  purpose  of 
the  conveyance,  is  merely  nominal.     The  debts  secured  are  distinct, 
due  to  different  individuals  and  in  no  way  connected  with,  or  de- 
pendent on,  one  another — the  deed  is  valid  so  far  as  respects  the 
good  debts.      It   would  be  unreasonable  and   defeat  the  object  of 
deeds  of  trust,  if  they  are  to  be  declared  void,  and  honest  creditors 
deprived  of  their  security   for  debts,  because  the  debtor,  without 
their  knowledge  or  concurrence,  may  insert  an  usurious  or  feigned 
debt.  No  one  would  bid  at  a  trustee's  sale,  if  he  could  be  deprived 
of  his  title,  by  showing  that  one  of  many  enumerated  debts  was 
tainted  with   usury.     The  case  of   Harrison  v.   Hanent,   5   Taunt., 
780,  was  relied  on  for  the  plaintiff.     The  case  is  not  an  authority 
against    the    conclusion    above    announced,    but    tends,    we    think, 
greatly  to  confirm  its  correctness.     The  son  of  the  defendant  owed 
several  debts  to  the  plaintiffs,  some  of  which  were  usurious  ;  and 
wishing  to  get  a  further  advance  agreed  to  draw  three  bills  upon 
his   father  as  a  security   for  the  whole.     The  bills   were  accepted 
and  the  first  paid  ;  but  in  a  suit  on  the  second  it  was  held  to  be 
void,  because  it  was  a  security  for  the  amount,  in  which  were  in- 
cluded   some    usurious    debts.      Although    it    was    urged    that    the 
amount  of  the  first  and  second  bills  would  not  exceed  the  amount 
of  the  good  debts,  the  reply  was  that,  if  the  plaintiff  was  allowed 
to  recover,  he  could  apply  the  amount  to  the  bad  debts  and  sue 
the  son  on  the  good  debts  ;  that  it  was  the  same  as  if  the  son  had 
given  his  note,  with  his  father  as  surety  for  the  whole  debt.     The 
contract  was  entire.     The  security  was  given  as  well  for  the  illegal 
as  the  legal  part ;  they  are  connected  together  and  can  not  be  sep- 
arated;  which  distinguishes  it  from  this  case.     Here  the  debts  are 
[not]  connected;  one  may  be  paid  and  another  rejected.     It  is  the 
duty  of  the  trustee  to  pay  the  good  and  reject  the  bad  ones.     It 
is  the  same  as  if  a  separate  deed  of  trust   for  each  creditor  had 
been  executed. 

Per  Curiam.  Judgment  affirmed. 

This  case  has  been  approved  in  Morris  v.  Pearson,  79—253.  in  which  all 
the  cases  are  discussed.  See  also  Ballard  v.  Green,  118— p.  392,  and  Brown 
v.  Ximocks,  124 — 417. 

There  is  no  difference  in  this  respect  in  a  contract  malum  in  se  and  one 
malum  prohibitum.     Guv  v.  McLain,  12—47:  YYeith  v.  Wilmington,  68—24. 

See  1  Page  Cont.,  sees.  509.  510:  9  Cyc,  564:  Clark  Cont,  324:  15  Am.  & 
Eng  Encvc,  988:  6  R.  C.  L.,  814:  Tate  v.  Gaines,  105  Pac.  193,  26  L.  R.  A. 
(\    S  ).  106;  State  v.  Wilson.  73  Kan..  343,  83  Pac,  737.  117  A.  S.  R..  499. 


440  FORMATION    OJF    CONTRACT. 

LINDSAY  v.  SMITH, 
Ante  (158). 

(171)  ANNUITY  CO.  v.  COSTNER, 

149  N.  C,  293,  63  S.  E.,  304—1908. 

Action  was  brought  on  a  note  of  $144,  given  by  defendant  for 
the  premium  on  three  life  insurance  policies.  At  the  time  the  note 
was  executed  it.  was  agreed  between  the  plaintiff  and  defendant 
that  in  consideration  of  certain  services  specified,  the  defendant 
should  be  selected  as  one  of  not  exceeding  600  persons  who  should 
receive  as  compensation  for  such  services  a  renewal  commission 
from  a  fund  to  be  set  aside  for  that  purpose.  Defendant  con- 
tended that  this  provision  was  illegal  in  that  it  was  a  discrimina- 
tion, and  rendered  the  whole  contract  void.  Judgment  for  plain- 
tiff, and  defendant  appealed. 

Connor,  J.  The  sole  question  presented  is,  whether  by  reason 
of  the  provisions  of  sec.  4775,  Revisal,  forbidding  insurance  com- 
panies from  giving  any  special  benefits,  or  any  rebate  of  premi- 
ums on  policies  to  one  person  not  given  to  all  others  of  the  "same 
class  and  expectation  of  life,"  the  entire  contract,  policy  and  note 
are  void.  Conceding  that  the  contract,  set  out  in  the  record,  vio- 
lates the  provisions  of  the  statute,  it  does  not  follow  that  the  pol- 
icy of  insurance  issued,  or  the  note  given  for  premiums  are  void. 
It  is  not  always  easy  to  distinguish  between  those  cases  in  which 
the  illegal  element  enters  into  and  so  permeates  the  entire  contract 
as  to  render  it  void,  and  those  in  which  two  covenants  or  obli- 
gations are  assumed  which  are  either  severable,  or  which  the  par- 
ties have  so  severed  that  the  valid  may  be  separated  from  the  in- 
valid, and  enforced.  Pollock  thus  states  the  law:  "A  lawful 
promise,  made  for  a  lawful  consideration,  is  not  invalid  by  reason 
only  of  an  unlawful  promise  being  made  at  the  same  time  and  for 
the  same  consideration."  Again:  "Where  a  transaction,  partly 
valid  and  partly  not,  is  deliberately  separated  by  the  parties  into 
two  agreements,  one  expressing  the  valid  and  the  other  the  invalid 
part,  then  a  party  who  is  called  upon  to  perform  his  part  of  that 
agreemenl  which  is,  on  the  face  of  it,  invalid,  can  not  be  heard  to 
say  that  the  transaction,  as  a  whole,  is  unlawful  and  void."  Con- 
tra.!-. 842  and  843.  In  Price  v.  Green,  16  M.  &  W.  (Exch.), 
346,  the  defendant,  for  one  consideration,  covenanted  not  to  en- 
gage in  trade  in  the  cities  of  London  and  Westminster,  or  within 
600  miles  of  either  of  said  cities.  The  action  was  for  breach  of 
the  firsl  covenant.  Patterson,  J.,  held  that  the  two  were  divisible, 
and  sustained  the  action   for  breach  of  the  valid  covenant,  saying, 


ILLEGAL    CONTRACTS.  441 

"No  doubt  the  covenant  formed  the  consideration  for  the  payment 
of  1,500  pounds,  and  possibly  Gosnell  would  not  have  given  so 
large  a  sum,  unless  the  prohibition  to  trade  had  been  as  extensive 
as,  by  the  whole  of  the  covenant,  it  is  made  to  be;  but  this  is  con- 
jecture only.  ...  It  should  be  observed  that  the  restriction  as 
to  600  miles  from  London  and  Westminster  is  only  void  and  not 
illegal."  In  the  same  case,  reported  in  13  M.  &  W.,  695,  Pollock, 
C.  B.,  said:  "It  is  not  like  a  contract  to  do  an  illegal  act;  it  is 
merely  a  covenant  which  the  law  will  not  enforce;  but  the  party 
may  perform  it  if  he  choose." 

In  Fishnell  v.  Gray,  60  N.  J.  L.,  5,  Beasley,  C.  J.,  said:  "The 
proposition  posited  is,  that  as  this  part  of  the  consideration  of 
defendant's  promise  is  illegal,  the  entire  contract  falls  and  that  no 
part  of  it  can  be  enforced."  After  discussing  the  question,  he 
says :  "As  a  consideration  it  was,  in  the  earlier  cases,  treated  as 
devoid  of  legal  force,  but  it  was  deemed  to  vitiate  all  other  con- 
siderations with  which  it  was  blended.  On  this  theory  an  agree- 
ment to  abstain  generally  from  carrying  on  a  certain  business,  as 
in  the  present  case,  was  treated  as  though  it  were  an  agreement 
to  commit  a  crime,  and,  as  a  consequence,  it  illegalized  everything 
that  it  touched.  But  this  view,  it  has  since  been  perceived,  is  un- 
necessarily stringent  and  is,  in  fact,  quite  unreasonable.  There  is 
nothing  immoral  or  criminal  in  a  stipulation  not  to  engage  in  a 
certain  business.  A  man  may  bind  himself  to  such  an  abstention 
without  incurring  any  legal  penalty.  The  only  effect  is  that  such 
an  engagement  can  not  be  enforced,  either  at  law  or  in  equity. 
And  this  is  the  aspect  in  which  it  is  regarded  by  modern  author- 
ities." The  same  view  is  stated  by  Page  in  his  recent  work  on 
Contracts,  1  vol.,  sec.  509:  "If  A  makes  a  promise  to  B,  consist- 
ing of  two  or  more  covenants,  upon  a  valuable  and  legal  consid- 
eration, and  one  of  the  covenants  made  by  A  is  illegal,  and  the 
other  is  legal,  the  question  of  whether  the  legal  covenant  can  be 
enforced  or  not,  depends  on  whether  the  contract  is  severable  or 
not.  If  the  contract  is  severable,  consisting  in  legal  effect  of  dis- 
tinct contracts,  the  legal  covenant  can  be  enforced."  For  this 
statement  of  the  law,  the  author  cites  a  large  number  of  decided 
cases. 

The  distinction  is  sometimes  made  between  contracts  malum  in 
se  and  malum  prohibitum,  but  this  is  not  recognized  with  us. 
When  the  statute  prohibiting  a  contract  declares  it  to  be  void,  as 
in  the  statute  against  gambling  in  "futures,"  no  enforceable  prom- 
ise or  obligation  can  grow  out  of  it.  Burns  v.  Tomlinson,  147  N. 
C,  645.  The  statute,  sec.  4775,  does  not  declare  that  contracts 
made  in  violation  of  its  provisions  shall  be  void.  There  is  nothing 
immoral  in  the  contract  made  by  the  plaintiff  with  the  defendant, 


442  FORMATION    OF    CONTRACT. 

and  it  is  not  clear  that  it  comes  within  the  statutory  prohibition. 
Muller  v.  Ins.  Co.,  60  N.  E.,  958.     It  seems  that,   for  what  the 
company   regarded   a   valuable   consideration,    it   proposed   to   give 
to  a  class  of  600  of  its  policyholders  certain  benefits.     However 
this   may   be,   it   is   manifest  that   the   note   was   executed    for   the 
exact  amount  of  the  regular  premiums  charged  all  persons  of  de- 
fendant's age   for  that  kind  of   policy.      It   would  hardly  be  con- 
tended that  the  policy  was  void  and  that,  if   defendant  had  died 
within  the  year,  the  company  would  not  have  been  compelled  to 
pay   it.     The   company,    in   consideration   of    the   payment    of    the 
premium   or   the   execution   of    the   note,   made   two   separate   and 
distinct  contracts  with   the  defendant,   assuming   entirely   different 
obligations.     One   was   that,   upon   the   payment   of   the   premiums 
named  in   the  policy,  at   stated  annual  periods   during  his   life,   it 
would,  upon  his  death,  pay  to  the  beneficiary  named,  the  amount 
of  the  policy.     This  was  a  valid,  binding  contract.     At  the  same 
time,  the  company   made  a   separate  contract   with   the   defendant 
that,  upon  the  payment  of  the  second  annual  premium  and  the  one 
due  each  year  thereafter,  it  would  deduct  certain  amounts  by  way 
of  renewal  commissions,  which  should  be  credited  on  said  premi- 
ums.    Assuming,  for  the  purposes  of  this  decision,  that  this  con- 
tract is  void,  that  is,  not  enforceable  by  reason  of  sec.  4775,  Re- 
visal,  we  are  unable  to  perceive  how  it  can  affect  the  validity  of 
the  contract  of  insurance  or  the  promise  to  pay  the  premium.     It 
would  be  a  strange  result  if  a  statute,  passed  to  prohibit  rebates 
or  commissions   being  paid   to   the   insured,   should   invalidate  the 
policies  issued  to  persons  who  pay  the  premiums,  or  invalidate  the 
notes  given  for  them. 

The  defendant  says  that  he  learned,  in  a  few  days  after  the 
policy  was  issued,  that  the  contract  was  void,  but  that  he  retained 
it  in  his  safe  until  the  next  premium  fell  due,  when  he  let  it  lapse. 
He  was  certainly  insured  for  one  year,  and  this  was  a  valuable 
consideration  to  support  his  promise  to  pay  the  premiums.  Rod- 
dey  v.  Talbott,  115  N.  C,  293.  To  hold  that,  upon  his  own  evi- 
dence, he  may,  in  the  light  of  the  facts  in  this  case,  take  the  con- 
sideration and  then  repudiate  his  promise  to  pay,  would  subject 
the  court  to  the  charge  of  violating  "the  dictates  of  justice."  (The 
court  then  distinguishes  the  cases  of  Lindsay  v.  Smith,  78  N.  C, 
328,  and  Covington  v.  Threadgill,  88  N.  C.  186.)  No  error. 

A  contract  to  purchase  horses,  etc.,  and  to  carry  the  mail  for  the  Confed- 
erate Government,  was  an  indivisible  contract,  and  void.  Clemmons  v. 
Hampton.  f>4--264.  Tf  a  single  contract  is  made  on  several  considerations, 
any  one  of  which  is  illegal,  the  whole  is  void.  Covington  v.  Threadgill,  88 — 
186,  Where  there  was  a  stipulation  in  a  deed  of  trust  for  creditors,  pre- 
ferring such  of  the  creditors  as  would  receive  one-half  of  their  claims  and 
release  the  other  half,  it  was  held  that  this  vitiates  the  whole  deed,  and  the 
creditors  who  are  presumed  to  have  accepted  the  benefit  of  the  deed  are  held 


ILLEGAL    CONTRACTS.  443 

to  concur,  so  that  the  fraudulent  intent  enters  into  the  whole  instrument ; 
"like  one  rotten  egg  hroken  into  the  same  bowl  with  many  good  ones." 
Palmer  v.  Giles,  58—75.  1  Page  Cont,  sees.  507,  508;  Clark  Cont.,  322;  15 
Am.  &  Eng.  Encyc,  988;  9  Cyc,  564;  6  R.  C.  L.,  693;  Featherstone  v.  Hutch- 
inson, Cro.  Eliz.,  199,  6  E.  R.  C,  325 ;  Handy  v.  St.  Paul  Globe  Pub.  Co.,  41 
Minn.,  188,  16  A.  S.  R.,  695.  Where  a  foreign  corporation  does  not  comply 
with  the  local  law,  see  Ins.  Co.  v.  Edwards,  124 — 116;  Howard  v.  Ins.  Co., 
125—49;  Fisher  v.   Ins.  Co.,   136—217. 

2.  Intention  of  the  parties. 

(172)   ELECTROVA  CO.  v.  INSURANCE  CO., 

156  X.  C,  232,  72  S.  E.,  306,  35  L.  R.  A.  (N.  S.),  1216—1911. 

This  was  an  action  upon  an  insurance  policy.  The  plaintiff  was 
engaged  in  selling  pianos  which  play  hy  mechanical  means  when 
a  nickel  is  placed  in  a  slot.  The  defendant  issued  a  "floating  pol- 
icy" to  the  plaintiff  upon  all  instruments  in  Greenville  and  Kins- 
ton.  The  plaintiff  placed  a  piano  in  a  house  of  ill-fame,  kept  by 
one  Mabel  Page,  for  trial  and  with  a  view  to  selling  it  to  her, 
and  while  there  the  piano  was  destroyed  by  fire.  There  was  a 
judgment   for  the  defendant,  and  the  plaintiff  appealed. 

Reversed. 

Brown,  J.  .  .  .  The  defense  is  that  the  contract  of  insurance 
between  plaintiff  and  defendant  was  void  because  the  piano  had 
been  placed  in  a  house  of  ill-fame  with  a  view  to  selling  it  to  the 
proprietress.  It  is  urged  that  such  a  transaction  is  against  public 
policy  to  such  an  extent  that  it  avoids  the  policy  of  insurance  on 
the  piano.  The  defense  has  the  merit  of  novelty,  at  least.  But 
we  think  it  must  fail  for  two  reasons:  1.  The  theory  of  the  de- 
fense is  that  the  piano  was  insured  in  aid  and  furtherance  of  a 
contract  or  agreement  entered  into  between  the  plaintiff  and  Mabel 
Page,  which  was  against  public  policy. 

The  defendant  fails  to  establish  any  contract  or  agreement  of 
any  sort  between  the  plaintiff  and  Page.  There  was  no  contract 
or  agreement  to  sell  the  piano.  It  was  placed  in  her  house  in  the 
hope  of  a  sale.  The  title  and  right  of  possession  was  never  out 
of  plaintiffs.  They  had  the  right  to  remove  it  at  any  moment, 
and  by  legal  process  if  necessary.  The  instrument  was  not  placed 
in  the  house  to  earn  nickels  for  plaintiffs,  although  Rackley  found 
some  in  its  remains.  But  if  it  had  been  placed  there,  as  slot  ma- 
chines frequently  are  placed  in  public  places,  to  earn  nickels  for 
the  owner,  the  plaintiffs  would  not  thereby  have  forfeited  their 
title  to  the  property.  The  insurance  policy  was  not  taken  out  in 
aid  and  furtherance  of  a  contract  and  agreement  entered  into  be- 
tween plaintiffs  and  Mabel  Page,  for  there  was  none  entered  into, 
moral  or  immoral.     The  rule  of  law  which  the  defendant  invokes 


444  FORMATION    OF    CONTRACT. 

applies  only  to  executory  contracts  or  agreements  which  are  to  be 
performed  in  the  future,  and  not  to  transactions  which  are  past 
and  closed.     Brown  v.  Kinsey,  81  N.  C,  245. 

2.  The  effect  upon  the  public  interest,  under  the  facts  of  this 
case,  is  too  remote  entirely  to  justify  a  court  in  refusing  its  aid 
to  plaintiff  to  enforce  the  payment  of  the  policy. 

The  reason  that  some  contracts  and  agreements  are  declared 
void  as  against  public  policy  is  because  the  enforcement  of  them 
by  the  courts  would  have  a  direct  tendency  to  injure  the  public 
good.  Harrell  v.  Watson,  63  N.  C,  454;  Brown  v.  Kinsey,  supra; 
Collins  v.  Blantern,  1  Smith  L.  Cas.,  153.  It  has  been  said  by 
learned  judges  and  text-writers  that  a  court  should  declare  a  con- 
tract void  as  against  public  policy  only  when  the  case  is  clear  and 
free  from  doubt  and  the  injury  to  the  public  is  substantial  and 
not  theoretical  or  problematical.  Navigation  Co.  v.  Dumas,  181 
Fed.,  782;  Cox  v.  Hughes,  102  Pac.  R.,  956. 

Where  the  contract  or  agreement  sought  to  be  enforced  has  no 
direct  connection  with  the  illegal  act,  but  is  collateral  to  it,  then 
the  contract  is  not  tainted  or  affected  by  the  illegal  act.  The  prin- 
ciple of  law  is  thus  stated  by  Chief  Justice  Marshall :  "Where  a 
contract  grows  immediately  out  of  and  is  connected  with  an  illegal 
or  immoral  act,  a  court  of  justice  will  not  lend  its  aid  to  enforce 
it.  But  if  the  promise  be  entirely  disconnected  with  the  illegal 
act,  and  is  founded  on  a  new  consideration,  it  is  not  affected  by 
the  act,  although  it  was  known  to  the  party  to  whom  the  promise 
was  made,  and  although  he  was  the  contriver  and  conductor  of 
the  illegal  act."  Again  the  Chief  Justice  expresses  the  same  prin- 
ciple in  simpler  language  when  he  says :  "A  new  contract,  founded 
on  a  new  consideration,  although  in  relation  to  property  respecting 
which  there  had  been  unlawful  transactions  between  the  parties, 
is  not  itself  unlawful."  Armstrong  v.  Toler,  24  U.  S.,  257.  Where 
the  connection  between  the  illegal  act  and  the  agreement  sought 
to  be  enforced  is  not  direct,  but  remote,  the  latter  will  be  upheld. 

•  a  • 

The  true  test  of  the  illegality  of  a  contract  is  thus  stated  by  this 
court  in  S.  v.  Bevers,  86  N.  C.,  595  :  "The  principle  upon  which 
courts  refuse  their  aid  in  such  cases  is  this :  No  court  will  lend 
assistance  to  one  who  founds  his  cause  of  action  upon  an  illegal 
act.  .  .  .  But  to  put  this  principle  into  operation  in  any  particular 
case  it  must  appear  that  the  very  party  who  is  seeking  aid  from  the 
court  participated  in  the  unlawful  purpose.  Indeed,  it  is  said  that 
the  very  test  of  its  application  is  whether  the  plaintiff  can  estab- 
lish his  case  otherwise  than  through  the  medium  of  an  illegal 
transaction,  to  which  he  himself  was  a  party."  It  has  been  also 
held  by  other  jurisdictions   that   if   the  plaintiff  does   not   require 


ILLEGAL,    CONTRACTS. 


445 


the  aid  of  an  illegal  transaction  to  establish  his  claim,  he  may  re- 
cover. In  re  Bunch  Co.,  180  Fed.,  519,  and  cases  cited;  Fruit 
Association  v.  Snelling,  141  Cal.,  713. 

There  are  cases  which  hold  that  if  this  piano  had  been  sold  to 
Mabel  Page  to  enable  her  to  better  carry  on  and  conduct  a  house 
of  ill-fame,  the  seller  could  not  recover  in  action  for  the  purchase 
price.  Furniture  Co.  v.  Alstein,  51  L.  R.  A.,  889;  Reed  v.  Brewer, 
90  Tex.,  148.  Those  cases  are  founded  upon  the  principle  we  have 
adverted  to,  that  the  plaintiff  could  not  make  out  his  case  without 
resorting  to  and  putting  in  evidence  an  illegal  transaction.  But 
nowhere  can  there  be  found  a  case,  so  far  as  we  are  advised, 
which  holds  that  if  Mabel  Page  had  purchased  the  piano  she  could 
not  have  lawfully  insured  it,  and  recovered  the  insurance  had  it 
been  destroyed  by  fire. 

It  is  very  generally  held  to  be  vicious,  and  in  some  States  it  is 
made  a  crime  for  the  owner  of  a  house  to  lease  it  for  immoral 
purposes.  Yet  it  has  never  been  held  that  if  the  house,  so  leased, 
is  insured  and  destroyed  by  fire,  the  owner  can  not  recover  on  his 
policies.  There  is  no  direct  connection  between  the  immoral  or 
unlawful  act  of  leasing  and  the  lawful  and  (so  far  as  the  public 
is  concerned)  harmless  act  of  insuring.  The  evil  effect  upon  pub- 
lic interests  is  entirely  too  remote  and  problematical  to  avoid  the 
lawful  contract  of  insurance.     .     .     . 

No  public  interest  is  involved,  much  less  injured,  by  the  en- 
forcement of  this  contract.  And  we  think  what  is  said  by  the 
Supreme  Court  of  California  in  the  case  cited  may  well  apply  to 
this :  "Parties  should  be  careful  about  making  contracts,  but  when 
once  made  the  courts  will  not  relieve  them  for  light  or  trivial  rea- 
sons. Public  policy  is  better  served  by  leaving  the  parties  and 
their  rights  to  be  measured  by  the  terms  of  their  contract.'  Up- 
on the  issues  as  answered  by  the  jury  the  plaintiff,  the  Electrova 
Company,  is  entitled  to  judgment.     .     .     . 

In  Phillips  v.  Hooker.  62— p.  205,  where  the  question  was  whether  Confed- 
erate money  as  a  consideration  rendered  the  contract  void,  Reade,  J.,  gives 
the  following  as  to  intent:  "A  contract  is  not  void  merely  because  it  tends  to 
promote  illegal  or  immoral  purposes"  (citing  11  Wheat.  U.  S.,  258).  'A 
contract  for  the  sale  of  a  house  and  lot  is  not  vitiated  by  the  fact  that  the 
vendor  knew  that  the  vendee  intended  it  for  an  immoral  purpose"  (a  home 
for  his  mistress).  Armfield  v.  Tate.  29—259.  "A  sale  of  goods  is  not  void, 
although  the  seller  knows  that  they  are  wanted  for  illegal  purposes,  unless 
he  has  a  part  in  the  illegal  purpose"  (quoting  Mansfield,  C.  J.).  "The  mere 
selling  goods  knowing  that  the  buyer  will  make  an  illegal  use  of  them,  is  not 
sufficient  to"  deprive  the  vendor  of   his   just  right  of  payment."     .     .  if 

the  illegal  use  to  be  made  of  the  goods  enters  into  the  contract,  and  forms  the 
motive  or  inducement  in  the  mind  of  the  vendor  or  lender  to  the  sale  or  loan, 
then  he  can  not  recover,  provided  the  goods  are  used  to  carry  out  the  con 
templated  design ;  but  bare  knowledge  on  the  part  of  the  vendor  that  the 
vendee  intends  to  put  the  goods  or  money  to  an  illegal  use,  will  not  vitiate 
the  sale  or  loan"    (citing  Dater  v.   Earl.  3  Gray,  482).     "Where  the  vendor 


446  FORMATION    <>]■'    CONTRACT. 

sold  goods  knowing  that  the  vendee  intended  to  smuggle  them,  he  can  re- 
cover, but  not  if  he  does  any  act  to  assist  in  carrying  out  the  design."  But  in 
Kingsbury  v.  Fleming,  66—524,  it  is  said  that  if  money  is  loaned  for  an  illegal 
purpose,  "the  fact  that  it  is  not  so  used  is  immaterial.  See  numerous  cases 
cited  above  under  contracts  affecting  the  government.  There  is  a  further 
distinction  sometimes  made  between  contracts  mala  in  se  and  mala  prohibita, 
in  that  mere  knowledge  in  the  former  is  sufficient;  so  also  as  to  one  consti- 
tuting a  serious  crime  and  one  constituting  a  minor  offense.  C  lark  Cont., 
329.  See  generally,  Clark  Cont.,  325  et  seq.;  1  Page  Cont.,  sees.  528-533:  9 
Cyc,  569;  15  Am.  &  Eng.  Encyc,  986;  Pollock  Cont.,  485. 

In  Lloyd  v.  R.  R.,  151 — 536,  the  parties  did  not  know  that  they  were  vio- 
lating any  law.  For  other  cases  illustrating  the  effect  of  intention,  see 
Michael  v.  Bacon,  49  Mo.,  474,  8  A.  R.,  138;  Graves  v.  Johnson,  156  Mass., 
211,  32  A.  S.  R.,  446;  Brunswick  v.  Valleau,  50  Iowa,  120,  32  A.  R..  119; 
Anheuser  Brewing  Co.  v.  Mason.  44  Minn..  318.  46  N.  W..  558,  9  L.  R.  \  , 
505;  Conithan  v.  Ins.  Co.,  91  Miss.,  386,  45  So.,  361,  18  L.  R.  V  (N.  S.  ). 
214;  Phenix  Ins.  Co.  v.  Clay,  101  Ga.,  331,  28  S.  E.,  853,  65  A.  S.  R..  307; 
Pearce  v.  Brooks.  6  E.  R.  C,  334;  6  R.  C.  L.,  695. 

3.  A   promise   to   pay   money   due   on  an   illegal   contract. 

(173)   CALVERT  v.  WILLIAMS, 

64  X.  C.  168—1870. 

Plaintiff  sued  on  a  note  given  partly  for  another  note,  and 
partly  for  board.  The  former  note  had  been  executed  to  one 
Christmas,  for  money  won  at  cards,  and  it  had  been  endorsed  to 
plaintiff,  for  value  and  without  notice,  either  then  or  when  the 
second  note  was  executed.  There  was  a  judgment  for  the  defend- 
ant, and  plaintiff  appealed. 

Pearson,  C.  J.  A  note  to  secure  the  payment  of  money  won  at 
cards  is  void  by  statute,  although  the  note  be  passed  by  endorse- 
ment, for  valuable  consideration,  and  without  notice  to  the  en- 
dorsee, it  is  void  in  his  hands.  So,  if  the  maker  executes  a  second 
note  to  the  original  payee,  either  in  renewal  of  the  first  note  sim- 
ply, or  including  another  debt,  the  second  note  is  void  ;  for  it  is  to 
secure  the  payment  of  money  won  at  cards,  and  the  taint  in  the 
part  of  the  consideration  vitiates  the  whole — "a  rotten  egg."  Pal- 
mer v.  Giles,  58 — 75. 

In  our  case  the  maker  executed  the  second  note  to  Calvert,  who 
was  the  endorsee  for  valuable  consideration,  and  without  notice. 
This  second  note  was  given  to  secure  the  price  paid  by  Calvert 
for  the  first  note,  and  not  to  secure  the  payment  of  the  money 
which  Christmas  had  won  ;  for  the  purpose  of  making,  it  must  be 
referred  to  the  proximate,  and  not  the  remote  cause.  The  consid- 
eration, therefore,  is  not  tainted  by  the  illegality  which  vitiated  the 
first  note.     His  Honor  erred  in  failing  to  note  the  distinction. 

Cuthbert  v.  Hayly,  8  Term,  390,  cited  by  Mr.  Batchelor,  estab- 
lishes this  distinction.  The  more  recent  case  of  Hay  v.  Ayling, 
71   E.   C.  L.,  423,  treats  the  point  as   settled,  and  is  put  on  the 


ILLEGAL    CONTRACTS.  447 

ground  that  the  endorsee  had  notice,  and  that  the  second  note  was 
a  mere  device  or  contrivance  to  cover  over  the  taint  in  the  first 
note. 

There  is  error.     Judgment  reversed,  and  judgment  for  plaintiff. 

See  Puckett  v.  Alexander,  ante,  (147);  Steele  v.  Holt,  75 — 188;  Weith  v. 
Wilmington,  68 — 24;    Warden  v.  Plummer,  49 — 524. 

A  gave  a  note  in  purchasing  a  judgment  from  B,  which  B  had  won  at 
cards:  the  note  is  valid.  Teague  v.  Perry,  64 — 39.  If  the  note  had  heen 
given  for  the  gaming  deht,  and  the  judgment  had  heen  rendered  thereon 
in  invitum,  it  would  have  heen  valid.  Ibid.;  Jones  v.  Jones,  4 — 547:  Dunn 
v.   Holloway,  16—326. 

A  as  principal  and  B  as  surety  executed  a  note  for  money  to  he  used  for 
an  illegal  purpose :  afterwards  B  paid  the  deht  at  A's  request,  and  A  gave 
his  note  to  B  for  the  amount:  this  note  is  valid.  Powell  v.  Smith,  66 — 401 
So  a  note  given  for  money  borrowed  to  pay  an  illegal  deht.  Kingsbury  v. 
Suit,  66 — 601:  Poindexter  v.  Davis,  67 — 112:  but  this  was  not  applied  to  a 
contract  by  county  authorities.  Davis  v.  Comrs.,  74 — 374.  A  lender  may 
recover  from  a  borrower  money  paid  at  his  request  in  discharge  of  an  illegal 
contract.  Williams  v.  Carr,  80—294:  1  Page  Cont.,  sees.  512-516:  Clark  Cont, 
332:  15  Am.  &  Eng.  Encyc,  995:  6  R.  C.  L..  698,  820,  821. 

4.  Relief  of  parties   to   the   agreement. 
1.    LOCUS    PENITENTIAE. 

(174)   W<  x  )D  v.  W(  )OD,  Kxtr., 
7  X.  C,  172—1819. 

There  was  a  verdict  and  judgment  for  the  plaintiff,  and  de- 
fendant appealed. 

Taylor,  C.  J.  This  action  was  brought  to  recover  the  amount 
of  a  sum  betted  on  a  horse  race,  and  deposited  with  defendant's 
testator  as  a  stakeholder.  The  sum  was  paid  over  by  him  to  the 
supposed  winner  of  the  race,  after  notice  from  the  plaintiff  not  to 
do  so;  and  the  contract  being  illegal  under  the  Act  Of  1810,  the 
question  is,  ought  the  plaintiff  to  recover?  Where  money  has  been 
paid  on  an  illegal  transaction,  in  which  both  parties  are  equally 
criminal,  it  can  not  be  recovered  back  ;  for  there  is  no  reason  why 
he  who  parted  with  his  money  freely  should  have  it  again.  Vo- 
lenti non  fit  injuria;  and  the  law  in  such  case  esteems  the  condi- 
tion of  the  defendant  the  most  eligible,  not  on  account  of  any  su- 
perior merit  he  has  to  the  plaintiff,  but  because  the  latter  can  not 
build  his  claim  on  a  moral  foundation.  This  principle  is  distinctly 
recognized  in  many  cases,  and  recently  in  Hauser  v.  Hancock,  8 
Term,  575,  and  Edgar  v.  Fowler,  3  East,  222.  And  the  first  case 
also  proves,  that  where  money  deposited  on  an  illegal  wager  has 
been  paid  over  to  the  winner  by  the  consent  of  the  loser,  the  lat- 
ter can  not  afterwards  maintain  an  action  against  the  former,  to 
recover  back  his  deposit.     But  the  law  is  different  where  the  ac- 


448  FORMATION    OF    CONTRACT. 

tion  is  brought  against  a  stakeholder  who  has  the  money  still  in 
his  possession,  or  has  paid  it  over  after  notice  not  to  do  so.  This 
distinction  is  taken  in  Cotton  v.  Thurland,  5  Term,  405,  where  the 
plaintiff  was  permitted  to  recover  a  stake  deposited  by  him  on  the 
event  of  a  boxing-match ;  and  the  latter  case  does  not  stand  un- 
supported for  its  authority  has  been  admitted  and  confirmed  in  a 
recent  case  of  Smith  v.  Bickmore,  4  Taunt.,  477 ;  which  was  an 
action  brought  by  a  person  who  deposited  in  the  hands  of  a  stake- 
holder, a  sum  of  money,  as  a  wager  on  the  event  of  a  boxing- 
match,  between  himself  and  another;  and  he  was  allowed  to  re- 
cover the  same  from  the  stakeholder,  having  demanded  it  before 
it  was  paid  over.  In  that  case,  Sir  James  Mansfield  observes, 
"The  law  is  got  into  sad  confusion  by  contradictory  decisions  re- 
specting illegal  contracts.  But  this  case  seems  made  for  the  ex- 
press purpose  of  confirming  Cotton  v.  Thurland.  In  that  case 
there  was  a  doubt  about  the  event,  exactly  as  in  this  case ;  and  the 
court  thought  the  money  might  be  recovered  against  the  stake- 
holder. Now  this  is  a  case,  not  of  an  action  against  one  of  the 
parties  to  the  wager,  but  against  a  stakeholder;  therefore  it  is  dif- 
ferent from  the  cases  of  actions  against  underwriters  to  recover 
back  premiums  paid  on  illegal  contracts."  Whatever  may  be  the 
illegality  of  the  contract,  the  stakeholder  is  no  party  to  it,  and  as 
long  as  the  money  remains  in  his  hands  he  ought  to  be  accountable 
to  someone  for  it ;  there  can  be  no  justice  in  his  claim  for  detain- 
ing it.  The  question  between  a  party  and  a  stakeholder  is  suscep- 
tible of  views  and  considerations,  which  do  not  attach  to  it  between 
the  parties  themselves.  To  both  of  the  latter  the  law  refuses  its 
aid,  on  principles  of  public  policy.  It  can  not  uphold  the  winner, 
for  that  were  to  enforce  a  void  contract,  and  repeal  an  Act  of  As- 
sembly. It  will  not  assist  the  loser  against  him,  because  he  has 
voluntarily  parted  with  his  money.  And  as  both  parties  have  vio- 
lated the  law,  it  will  not  trouble  itself  to  alter  the  condition  in 
which  they  have  placed  themselves.  A  stakeholder  received  the 
deposit  to  be  paid  over  to  the  winner,  and  the  authority  given  him 
is  countermandable  at  any  time  before  the  payment  is  made.  The 
money  may  be  stopped  in  transitu  to  the  person  entitled  to  receive 
it.  3  East,  225.  The  court  think  the  jury  were  properly  in- 
structed, and  that  the  rule   for  a  new  trial  should  be  discharged. 

See  also,  Forest  v.  Hart,  7—458;  Bridgers  v.  McNeill,  51—311;  Futrell  v. 
Vann,  30—402;  1  Page  Cont.,  sec.  526,  539;  Clark  Cont.,  336;  15  Am.  &  Eng. 
Encyc,  1007;  6  R.  C.  L.,  830;  Pollock  Cont.,  496,  502;  Bernard  v.  Tavlor,  23 
Ore.,  416,  18  L.  R.  A.,  859,  37  A.  S.  R.,  693;  niggle  v.  Higgs,  46  L.  J.  Ex., 
721,  6  E.  R.  C,  482. 


ILLEGAL    CONTRACTS.  449 


2.    IN    PARI    DELICTO. 

(175)   POWELL  &  CO.  v.  INMAN, 

53  N.  C,  436,  82  A.  D.,  426—1862. 

This  was  an  action  upon  a  bond  for  the  payment  of  money. 
The  defense  was  that  the  bond  was  given  for  an  illegal  consid- 
eration, in  that  it  was  to  defraud  creditors.  There  was  a  judg- 
ment for  the  defendant,  and  plaintiff  appealed.  Affirmed. 

Battle,  J.  ...  In  the  argument  submitted  by  the  counsel  for  the 
plaintiff,  he  admits  the  correctness  of  the  general  principle,  that  a 
contract,  the  consideration  of  which  is  the  doing  of  an  act,  either 
malum  in  se  or  malum  prohibitum  is  void,  and  no  action  at  law 
can  be  sustained  upon  it.  He  also  admits  that  the  fact  of  the  con- 
tract's being  under  seal,  does  not  preclude  the  illegality  of  the  con- 
sideration from  being  inquired  into,  and  urged  as  a  defense.  See 
Broom's  Com.,  91 ;  Law.  Lib.,  280.  But  he  contends  that  a  bond 
for  the  payment  of  money,  though  made  for  the  express  purpose 
of  defrauding  the  obligor's  creditors,  is  valid  as  against  him,  by 
force  of  the  Stat.  Eliz.,  ch.  5,  sec.  2;  Rev.  Code,  ch.  50,  sec.  1. 
By  reference  to  that  statute,  it  will  be  seen  that  bonds  are  men- 
tioned along  with  several  kinds  of  conveyances  made  with  intent 
to  delay,  hinder  and  defraud  creditors,  however,  as  against  those 
persons  who  are  hindered,  delayed,  and  defrauded  of  their  debts; 
and  it  is  inferred  that  bonds,  as  well  as  conveyances  of  property, 
are  good  and  valid  against  those  who  execute  them  in  favor  of 
the  obligee  and  grantee.  This  argument  confounds  the  distinction 
between  the  nature  and  effect  of  a  bond  and  an  executed  convey- 
ance. The  former  is  a  chose  in  action,  which  may  require  the  aid 
of  a  court,  through  the  means  of  an  action  or  suit,  to  give  the 
obligee  the  benefit  of  it,  while  the  latter  transfers  at  once  the  title 
of  the  property  granted  or  sold  to  the  grantee  or  bargainee. 
Hence,  to  the  former,  the  well  established  maxim  of  ex  dolo  malo 
non  oritur  actio  may  apply,  while  it  is  entirely  inapplicable  to  the 
latter,  which  does  not  require  the  aid  of  a  court  to  transfer  the 
property.  The  fraudulent  grantee  or  bargainee  has,  then,  the  ad- 
vantage of  his  grantor  or  bargainor,  because,  having  the  property 
by  force  of  the  conveyance,  the  grantor  or  bargainor  will  be  met, 
when  he  applies  to  be  relieved  against  it,  with  the  objection  that 
"no  court  will  lend  its  aid  to  a  man  who  founds  his  cause  of  ac- 
tion upon  an  immoral  or  illegal  act."  Holman  v.  Johnson,  1 
Cowper,  343.  The  Statute  of  Frauds,  13  Eliz.,  — ,  in  making  void 
and  of  no  effect  conveyances  intended  to  defraud  creditors,  as  to 
the  creditors  only,  and  leaving  them  in  full  force  in  other  respects 


450  FORMATION    OF    CONTRACT. 

as  between  the  parties,  does  not  contravene  that  rule.  But  if  the 
statute  is  to  be  construed  as  to  its  effect  upon  fraudulent  bonds 
in  the  manner  contended  for  by  the  plaintiff's  counsel,  it  will  vio- 
late the  rule,  and  produce  the  strange  and  unnecessary  anomaly, 
that  while  the  obligee  in  a  bond  founded  upon  the  illegal  consid- 
eration of  compounding  a  felony,  gaming,  usury,  restraining  trade, 
restraining  marriage,  and  the  like  [may  not  enforce  it],  he  may 
do  so  if  the  consideration  were  that  of  a  most  gross  and  outrage- 
ous attempt  to  cheat  and  defraud  creditors.  But  the  words  of  the 
statute  may  be  satisfied  without  the  necessity  of  adopting  any 
such  construction.  A  voluntary  bond,  executed  without  any  actual 
intent  to  defraud  creditors,  may  be  avoided  by  them  under  the 
statute,  if  such  an  avoidance  be  necessary  to  secure  their  debts, 
but  as  between  the  parties  the  statute  leaves  it  still  in  force.  By 
giving  to  the  statute  such  an  operation  and  no  more,  the  very  salu- 
tary maxim  to  which  we  have  referred,  ex  dolo  malo  non  oritur 
actio,  will  be  left  in  its  full  integrity,  to  prevent  a  recovery  by  the 
obligee  of  a  bond  conceived  and  executed  by  the  parties  with  the 
actual  intent  to  hinder,  delay,  and  defraud  the  creditors  of  the 
obligor.  That  the  distinction  which  we  have  endeavored  to  point 
out  between  bonds  and  executed  conveyances  does  exist,  is,  as  we 
think,  established  by  adjudicated  cases.  That  of  Roberts  v.  Rob- 
erts, 2  Barn.  &  Aid.,  366,  4  E.  C.  L.  R.,  545,  cited  by  plaintiff's 
counsel,  and  all  those  referred  to  by  Roberts  in  his  work  on 
Fraudulent  Conveyances,  which  were  held  to  be  valid  as  between 
the  parties,  are  cases  of  executed  conveyances,  while  not  a  single 
instance  of  a  bond  made  for  that  purpose  of  defrauding  creditors 
has,  to  our  knowledge,  been  upheld  as  good  between  the  obligor 
and  obligee.  Judgment  affirmed. 

(176)    SYKES  v.  THOMPSON, 

160  N.  C,  348,  76  S.  E.,  252—1912. 

The  plaintiff  was  induced  to  pay  to  the  defendant  the  sum  of 
$340,  by  representations  of  the  defendant  that  plaintiff's  sons  had 
gotten  that  amount  from  him  by  fraud,  and  that  they  could  not 
return  home,  or  if  they  did  they  would  be  prosecuted.  This 
amount  was  paid  to  prevent  any  trouble  to  plaintiff's  sons.  Later 
the  plaintiff  found  the  charges  to  be  untrue,  and  brought  his  ac- 
tion to  recover  the  money.  There  was  a  demurrer  to  the  com- 
plaint, and  the  court  sustained  it  on  the  ground  that  the  plaintiff's 
action  was  based  upon  an  illegal  consideration.     Plaintiff  appealed. 

Reversed. 

Hoke,  J.  ...  In  Clark  on  Contracts,  p.  336,  the  author  says :  "It 
is  a  well-settled  rule  that  in   no  case  will  the  court  lend  its  aid 


ILLEGAL,    CONTRACTS.  451 

to  the  enforcement  of  illegal  agreements.  Further  than  this,  if  the 
agreement  has  been  executed,  in  whole  or  in  part,  by  the  payment 
of  money  or  transfer  of  property,  the  court  will  not,  as  a  rule, 
entertain  an  action  to  recover  it  back."  This  general  principle  has 
been  applied  in  several  recent  decisions  of  the  court,  as  in  Smath- 
ers  v.  Ins.  Co.,  151  N.  C,  98;  Edwards  v.  Goldsboro,  141  N.  C, 
60,  and  these  and  other  cases  here  and  elsewhere  recognize  that 
the  rule  as  stated,  or  the  second  portion  of  it,  is  subject  to  well- 
recognized  exceptions;  one  of  them  being  when  parties  are  not  in 
pari  delicto.  In  such  case,  if  the  facts  otherwise  justify  it,  re- 
covery may  be  sustained  by  the  more  innocent  party,  notwith- 
standing the  illegal  features  of  the  agreement,  and  this  qualifica- 
tion of  the  more  general  principle  is  usually  allowed  to  prevail 
when  the  "party  seeking  relief  has  been  induced  to  enter  into  the 
agreement  by  fraud  or  undue  influence."  Wright  v.  Cain,  93  N. 
C,  296;  Pinkston  v.  Brown,  56  N.  C,  494;  Webb  v.  Fulchire,  25 
N.  C,  485 ;  Hobbs  v.  Boatwright,  195  Mo.,  693 ;  Gorringe  v.  Reed, 
23  Utah,  120;  Austin  v.  Winston,  11  Va.,  33,  3  Am.  Dec,  583; 
Clark  Cont.,  336;  15  A.  &  E.  Enc,  1000,  1007,  etc. 

The  general  doctrine,  with  the  modifications  applicable  to  the 
facts  presented,  is  very  well  expressed  in  the  headnotes  to  the 
Missouri  case  supra,  as  given  in  113  Am.  St.  Rep.,  709,  as  fol- 
lows :  "The  -doctrine  that  the  courts  will  not  aid  a  plaintiff  who 
is  in  pari  materia  with  the  defendant  is  not  a  rule  of  universal 
application.  It  is  based  on  the  principle  that  to  give  plaintiff  re- 
lief in  such  a  case  would  contravene  public  morals  and  impair  the 
good  of  society.  Therefore  the  rule  should  not  be  applied  in  a 
case  in  which  to  withhold  relief  would  to  a  greater  extent  offend 
public  morals.  The  question  of  what  is  public  policy  in  a  given 
case  is  as  broad  as  the  question  of  what  is  fraud  in  a  given  case, 
and  is  addressed  to  the  good  common  sense  of  the  court.  There 
may  be  such  an  inequality  of  condition  between  persons  in  pari 
delicto  that  relief  may  be  given  to  the  more  innocent,  if  there  are 
collateral  and  incidental  circumstances  attending  the  transaction 
and  affecting  the  relations  of  the  parties  which  render  one  of  them 
comparatively  free  from  fault,  or  where  the  courts  intervene  from 
motives  of  public  policy."  ...  We  are  of  opinion  that  plain- 
tiff's claim,  on  the  facts  as  they  now  appear,  comes  well  within 
the  principle  just  stated,  and  that  the  judgment  sustaining  defend- 
ant's demurrer  is  erroneous. 


452  FORMATION    OF    CONTRACT. 


(177)   WEBB  v.  FULCHIRE, 

25  N.  C,  485,  40  A.  D.,  419—1843. 

Action  of  assumpsit  for  $40,  lost  in  betting  on  which  of  three 
acorn  cups  a  certain  white  ball  was  under.  The  court  held  that 
the  plaintiff  could  not  recover,  and  plaintiff  appealed. 

RuFFin,  C.  J.  It  is  not  denied  that  the  law  gives  no  action  to 
a  party  to  an  illegal  contract,  either  to  enforce  it  directly,  or  to 
recover  back  money  paid  on  it  after  its  execution.  Nor  is  it 
doubted  that  money,  fairly  lost  at  play  at  a  forbidden  game  and 
paid,  can  not  be  recovered  back  in  an  action  for  money  had  and 
received.  But  it  is  perfectly  certain  that  money,  won  by  cheating 
at  any  kind  of  game,  whether  allowed  or  forbidden,  and  paid  by 
the  loser  without  a  knowledge  of  the  fraud,  may  be  recovered.  A 
wager  won  by  such  undue  means  is  not  won  in  the  view  of  the 
law,  and,  therefore,  the  money  is  paid  without  consideration  and 
by  mistake,  and  may  be  recovered  back.  That,  we  think,  was 
plainly  this  case.  The  bet  was,  that  the  plaintiff  could  not  tell 
which  of  the  three  cups  covered  the  ball.  Well,  the  case  states 
that  the  defendant  put  the  ball  under  a  particular  one  of  the  cups, 
and,  then,  that  the  plaintiff  selected  that  cup  as  the  one  under 
which  the  ball  was.  Thus  we  must  understand  the  case,  because 
it  states  as  a  fact  that  the  defendant  "placed  the  ball  under  one  of 
the  cups,"  and  that  the  plaintiff  "pointed  to  the  cup,"  that  is,  the 
one  under  which  he  had  seen  the  ball  put,  as  being  that  which  still 
covered  it.  We  are  not  told  how  this  matter  was  managed,  nor 
do  we  pretend  to  know  the  secret.  But  it  is  indubitable  that  the 
ball  was,  by  deceit,  not  put  under  the  cup,  as  the  defendant  had 
made  the  plaintiff  believe,  and  under  which  belief  he  had  drawn 
him  into  the  wager;  or  that,  after  it  was  so  placed,  it  was  privily 
and  artfully  removed  either  before  or  at  the  time  the  cup  was 
raised.  If  the  former  be  the  truth  of  the  case,  there  was  a  false 
practice  and  gross  deception  upon  the  very  point,  that  induced  the 
laying  of  the  wager,  namely,  that  the  ball  was  actually  put  under 
the  cup.  For,  clearly,  the  acts  of  the  defendant  amount  to  a  rep- 
resentation, that  such  was  the  fact ;  and  indeed  the  case  states  it 
as  the  fact.  Hence,  and  because  we  can  not  suppose  the  vision  of 
the  plaintiff  to  have  been  so  illuded,  we  rather  presume  the  truth 
to  be  that  the  ball  was  actually  placed  where  the  defendant  pre- 
tended to  place  it,  that  is  to  say,  under  the  particular  cup  which 
the  plaintiff  designated  as  covering  it.  Then  the  case  states  that 
the  defendant  raised  that  cup,  and  the  ball  was  not  there ;  a 
physical  impossibility  unless  it  had  been  removed  by  some  con- 
trivance and  sleight-of-hand  by  the  defendant.     Unquestionably  it 


ILLEGAL    CONTRACTS. 


453 


was  effected  by  some  such  means;  for  presently  we  find  the  de- 
fendant in  possession  of  the  ball,  ready  for  a  repetition  of  the  bet, 
and  the  same  artifice.  Such  a  transaction  can  not  for  a  moment 
be  regarded  as  a  wager,  depending  on  a  future  and  uncertain 
event;  but  it  was  only  a  pretended  wager,  to  be  determined  by  a 
contingency  in  show  only,  but  in  fact  by  a  trick  in  jugglery  by  one 
of  the  parties,  practiced  upon  the  unknowing  and  unsuspecting 
simplicity  and  credulity  of  the  other.  Surely,  the  artless  fool,  who 
seems  to  have  been  alike  bereft  of  his  senses  and  his  money,  is 
not  to  be  deemed  a  partaker  in  the  same  crime,  in  pari  delicto, 
with  the  juggling  knave,  who  gulled  and  fleeced  him.  The  whole 
was  a  downright  and  undeniable  cheat;  and  the  plaintiff  parted 
with  his  money  under  the  mistaken  belief  that  it  had  been  fairly 
won  from  him,  and,  therefore,  may  recover  it  back. 

The  judgment  of  nonsuit  is  reversed,  and  judgment  for  the 
plaintiff  according  to  the  verdict. 

See  the  various  cases  given  above,  especially  Ives  v.  Jones  (144)  ;  Blythe 
v  Lovinggood  (145);  Melvin  v.  Easley  (149);  Ward  v.  Sugg  (150);  Gar- 
seed  v.  Sternberger  (153);  Basket  v.  Moss  (154);  Edwards  v.  Goldsboro 
(156);  Smathers  v.  Ins.  Co.,  151—98;  Herring  v.  Lumber  Co.,  159—382; 
Pfeifer  v.  Israel,  161—409;  Robinson  v.  Life  Ins.  Co.,  163—415. 

Monev  won  at  gaming  and  paid,  when  the  parties  are  equally  guilty,  can 
not  be  recovered.    1-49;  3-231;  3-297;  4-276;  13-303:  13-372;  16-326. 

Negligence.— Defendant  was  held  not  liable  for  negligence  in  injuring 
the  plaintiff,  who  was  an  officer  and  on  the  train  on  his  way  to  join  the  Con- 
federate armv.  Turner  v.  R.  R.,  63—522 ;  but  one  riding  on  a  free  pass, 
which  it  is  unlawful  for  the  railroad  to  issue,  is  not  in  pari  delicto,  and  can 
recover  for  injuries  resulting  from  negligence.     McNeill  v.  R.  R.,  135—682. 

Fraud  on  creditors.— Where  both  parties  enter  into  a  contract  to  de- 
fraud creditors,  the  law  will  not  help  either  of  them.  York  v.  Merntt,  77— 
213,  80—285.  But  in  an  agreement  by  which  creditors  are  to  be  defrauded, 
the' debtor  may  not  be  in  pari  delicto,  by  reason  of  circumstances  attending 
the  transaction.     Pinckston  v.  Brown,  56—494. 

Principal  and  agent— The  law  will  not  allow  an  agent  to  retain  as 
against  his  principal  property  which  he  has  gotten  in  an  illegal  transaction. 
Jovner  v  Jewelrv  Co.,  159—644;  Distilling  Co.  v.  Bank,  163—66;  Ware  v. 
Spinney,  76  Kan.,"  289,  91  Pac,  787,  13  L.  R.  A.  (N.  S.),  267;  Pollock  Cont., 

498.  J  ,     .  . 

In  equity.— When  the  parties  are  in  pan  delicto,  and  one  obtains  an  ad- 
vantage over  the  other,  equity  will  not  grant  relief;  but  otherwise  where 
they  are  not  equally  in  fault,  as  where  one  is  ignorant  of  his  right,  or  of  the 
unlawful  nature,  or  depends  upon  the  other.  Wright  v.  Cain,  93—296;  Har- 
rell  v.  Wilson,  108—97 ;  Sparks  v.  Sparks,  94—527.  Equity  will  not  interfere 
to  rescind  an  executed  contract  based  upon  illegal  consideration,  where  the 
parties  are  in  pari  delicto,  except  where  the  contract  is  in  violation  of  some 
statute  to  protect  the  citizen  from  oppression,  and  the  party  oppressed  is 
asking  relief.  Grimes  v.  Hovt,  55— p.  275 ;  York  v.  Merritt,  80—285 ;  Lewis 
v.  Latham,  74—283 ;  McNeill  v.  R.  R.,  135—682.  Neither  will  equity  enforce 
such  a  contract  as  where  plaintiff  contracted  to  convey  land  to  defendant,  in 
consideration  of  his  serving  as  a  substitute  for  plaintiff's  son,  and  defendant 
served,  the  contract  was  held  to  be  void,  and  the  plaintiff,  having  the  legal 
title,  could  recover  the  land.  Lance  v.  Hunter,  72—178;  McRae  v.  R.  R-, 
58—395. 

Where  the  parties  are  in  pari  delicto,  the  law  will  not  help  either  one  to 
get  back  what  he  has  parted  with  in  an  executed  contract ;  neither  will  it  en- 


454  FORMATION    OF    CONTRACT. 

force  the  contract,  if  executory ;  whether  when  the  contract  is  executory  and 
has  been  repudiated,  either  party  can  recover  what  he  has  parted  with,  does 
not  seem  clearly  settled.  In  Clemmons  v.  Hampton,  64—264,  it  is  said  that 
he  can  recover,  because  it  would  be  unjust  to  allow  the  other  to  keep  the 
property;  but  see  Edwards  v.  Goldsboro.  156;  15  L.  R.  A.,  834;  15  Am.  & 
Eng.  Encyc,  1001;  1  Page  Cont.,  sees.  518-525;  9  Cyc,  546;  Clark  Cont.,  340; 
Pollock  Cont.,  503 ;  Collins  v.  Blantern,  2  Wils.,  34,  1  Smith  L.  C,  490 ;  Aus- 
tin v.  Davis,  128  Ind.,  472,  26  N.  E.,  890,  12  L.  R.  A.,  121,  note. 

5.  Rights  of  third  persons. 

(178)    HENDERSON   v.   SHANNON, 

12  N.  C,  157—1827. 

Action  on  a  note  under  seal,  which  had  been  given  for  com- 
pounding a  prosecution,  and  was  endorsed  to  plaintiff  before  ma- 
turity, for  value  and  without  notice.  There  was  a  judgment  for 
the  defendant,  and  plaintiff  appealed. 

Hall,  J.    This  is  not  a  contest  between  the  obligees  and  the  ob- 
ligors, as  was  the  case  in  Collins  v.  Blantern,  2  Wils,  342.     There 
the  bond  was  given  to  stifle  a  prosecution  for  perjury,  and  both 
plaintiff  and  defendant  were  privy  to  the  unlawful  consideration, 
for  which  reason  the  bond  was  held  to  be  void ;  nor  is  it  the  case 
of  a  bond  declared  to  be  void  by  statute  on  account  of  the  illegal- 
ity of  the  consideration  on  which  it  was  given,  as  was  the  case  of 
Lowe  v.  Sailer,  Doug.,  736.     There  a  bill  of  exchange  given  upon 
an  usurious  consideration  was  held  to  be  void  in  the  hands  of  an 
endorsee  for  a  valuable  consideration  without  notice  of  the  usury. 
The  present  case  is  one  where  the  bond  is  given  upon  a  considera- 
tion which  avoids  it  at  common  law,  but  assigned  to  plaintiff  be- 
fore  it  became   due,   and  without   notice  of   the  consideration   on 
which  it  was  given.     I  had  doubted  whether  the  purpose  to  stifle 
a  prosecution,  for  which  the  bond  was  given,  was  not  of  so  crim- 
inal a  nature  as  to  make  it  void  in  the  hands  of  an  endorsee;  but 
it  is  said  by  two  judges,  in  Aubert  v.  Maze,  2  Bos.  &  Pull.,  371, 
that  there  is  no  distinction  between  cases  that  are  malum  prohibi- 
tion and  malum  in  se;  and  I  am  not  aware  that  any  adjudged  case 
contradicts   this  position.     Taking  it   then,   that  there   is   no   such 
distinction,  the  case  of  Steers  v.  Lassley,  6  Term,  61,  must  be  con- 
sidered an  authority  for  the  plaintiff.     There  A  was  employed  as 
a  broker  in  stock-jobbing  transactions  for  B,  and  paid  money  for 
him,  for  which  he  drew  a  bill  on  B,  and  endorsed  it  to  C,  after 
B  had  accepted  it ;  but  C  had  knowledge  of  the  unlawful  consid- 
eration on  which  it  was  drawn,  and  for  that  reason  it  was  held  by 
the  court  that  he  could  not  recover.     From  which  I  am  to  infer 
that  had  he  been  ignorant  of  the  illegal  consideration  on  which  the 
bill  was  drawn,  he  would  have  been  entitled  to  the  judgment  of 
the  court  in  his   favor.     So  in  the  case  of   Brown  v.   Turner,   7 


ILLEGAL,    CONTRACTS. 


455 


Term,  626,  where  a  bill  drawn  upon  an  illegal  consideration,  hav- 
ing been  endorsed  after  it  became  due,  was  held  liable  in  the  hands 
of  the  endorsee  to  every  defense  which  existed  against  it  in  the 
hands  of  the  original  payee.  From  which  I  infer  that  had  it  been 
endorsed  before  it  became  due,  and  without  notice  of  the  consid- 
eration on  which  it  was  drawn,  as  in  the  present  case,  the  plain- 
tiff would  have  been  entitled  to  the  judgment  of  the  court.  There- 
fore I  think  the  law  is  in  favor  of  the  plaintiff,  and  that  the  rule 
for  a  new  trial  [should]  be  made  absolute.  New  trial. 

To  the  same  effect  is  Bascom  v.  Smith,  66—537.  A  executed  a  negotiable 
note  to  B,  on  an  illegal  consideration,  and  B  transferred  it  to  C  in  due 
course;  it  was  valid  for  C.  The  only  exception  is  where  the  illegality  ss  by 
statute  which  provides  that  the  instrument  shall  be  void,  and  this  is  the  only 
difference  between  a  consideration  malum  in  sc  and  malum  prohibitum. 
Weith  v.  Wilmington,  68—24.  So  with  a  gaming  debt,  Calvert  v.  Williams, 
supra  (173)  ;  and  usury  contract,  Shober  v.  Hauser,  20—222;  \\  ard  v.  Sugg, 
supra  (150)  ;  Glenn  v.  Bank,  70—191.  Where  the  illegality  appears  upon  the 
face  of  the  instrument,  it  is  void  in  the  hands  of  the  third  person.  Lonly 
v  Hall  67-9;  Kellogg  v.  Howes.  81  Cal..  170,  22  Pac,  509,  6  L.  R.  A.,  j88; 
Jones  v.  Dannenberg:il2  Ga.,  426,  37  S.  E..  729,  52  L.  R.  A.,  271. 

Fraudulent  conveyances.— Innocent  purchasers  are  protected  in  .such 
contracts.    Revisal,  965 ;  McCorkle  v.  Earnhardt,  61—300 ;  McNeill  v.  Riddle, 

66—290.  .  ,       .    .        .*.-., 

Where  the  original  debt  is  valid,  and  the  note  given  for  it  is  tainted  with 

usury,  the  holder  will  be  remitted  to  the  right  under  the  original.   \\  ijcoxon  v. 

Logan.  91—449;  Rountree  v.  Robinson,  98—107;  Webb  v.  Bishop,  101—99. 
The  illegality  should  be  pleaded  specially.     6—286;  64—642;  98—107. 

6.  Conflict  of  laws. 

GOOCH  v.  FAUCETT, 

Ante  (151). 

If  the  contract  is  valid  in  the  state  where  it  is  made  it  is  valid  everywhere, 
with  the  general  exceptions,  that  it  will  not  be  enforced,  (1)  if  it  contra- 
venes the  established  policy  of  the  forum;  (2)  if  it  would  work  injustice  to 
the  citizens  of  the  forum;  (3)  if  it  violates  the  canons  of  morality.  Minor 
Conf.  Laws,  358.  The  law  of  the  country  where  the  contract  is  made  (lex 
loci)  is  the  rule  bv  which  its  validity,  its  exposition  and  consequences  are  to 
be  determined.  Watson  v.  Orr,  14-^-161 ;  Anderson  v.  Doak,  32—295 :  Arm- 
strong v.  Best.  112—59;  Miller  v.  R.  R..  141—45:  Johnson  v.  Telegraph  Co., 
144 — 410.  When  the  contract  is  in  violation  of  the  policy  of  the  law  of  the 
forum,  or  onlv  the  remedy  is  affected,  the  lex  fori  controls.  Davis  v.  Cole- 
man 29—424;  Taylor  v.  Sharp,  108—377;  Hornthal  v.  Burwell,  109—10; 
Shields  v.  Ins.  Co.,  119—380;  Copeland  v.  Collins,  122—619;  Cannady  v.  R. 
R.  143_439.  See  Sunday  Laws,  supra,  149.  9  Cyc,  575;  Clark  Cont., 
342;  22  Am.  &  Eng.  Encyc.  1322.  1327  ct  seq. 

Change  of  law  does  not  make  a  void  contract  valid.  Puckett  v.  Alexan- 
der, supra,  147;  Hughes  v.  Boone.  102—137;  Spence  v.  Cotton  Mill.  115— 
210;  Tenkins  v.  Mfg.  Co.,  115—535. 

Marriage.— Bv  statute,  Revisal,  2083,  a  marriage  between  a  white  person 
and  a  negro  is  void.  State  v.  Hairston,  63—451 ;  State  v.  Reinhart,  63—547 : 
Woodard  v.  Blue,  103—109.  Where  the  parties  are  domiciled  in  another 
State  and  the  marriage  is  valid  there,  it  will  be  recognized  here.  State  v. 
Ross,  76 — 242;  but  where  they  are  domiciled  here  and  go  into  another_ State 
to  evade  the  law,  the  marriage  is  void  here.  State  v.  Kennedy,  76—251 :  so 
with  a  polygamous  marriage,  Williams  v.  Brawley,  27—535. 


456  EFFECT    OF    CONTRACT. 


II.  Effect  of  Contract. 


CHAPTER  I. 

Effect  Upon  Persons  not  Parties  to  the  Contract. 

Sec.  1.  Imposing  obligations. 

(179)   OSBORN  v.  CUNNINGHAM, 

20  N.  C,  559—1839. 

Assumspit  for  money  paid  to  the  use  of  the  defendant.  The  de- 
fendant and  one  Patton,  as  joint  obligors,  executed  a  note  under 
seal  for  $300;  one-half  of  it  had  been  paid;  a  writ  was  issued 
against  the  defendant  and  Patton  for  the  balance ;  the  plaintiff  be- 
came bail  for  Patton,  and  a  judgment  was  rendered  against  the 
defendant  and  Patton  for  the  debt;  Patton  left  the  country,  and 
the  plaintiff  was  compelled  by  proper  proceedings  to  pay  the  debt, 
amounting  to  $162,  and  he  brings  this  action  to  recover  this 
amount  from  the  defendant.  There  was  a  judgment  for  the  de- 
fendant, and  plaintiff  appealed. 

Daniel,  J.  The  plaintiff  declared  in  assumpsit  for  money  paid 
to  the  use  of  the  defendant,  at  his  request,  and  the  inquiry  is, 
whether  the  law  would  in  a  case  like  this,  imply  a  request.  It  is 
settled  law  that  if  one  pays  the  debt  of  another  without  his  re- 
quest, express  or  implied,  he  can  not  recover  in  an  action  for 
money  paid;  for  the  supposed  debtor  may  have  good  reason  to  re- 
sist the  payment  of  the  money.  Stokes  v.  Lewis,  1  T.  R.,  20;  2 
Saund.,  264;  Leigh's  N.  P.,  70.  The  plaintiff  became  bail  only  for 
Patton,  at  his  request,  and  for  his  personal  benefit.  In  consequence 
whereof,  he  has  been  by  process  of  law  compelled  to  pay  the 
whole  debt,  for  which  the  creditor  had  recovered  a  joint  judgment 
against  Patton  and  the  defendant  on  their  joint  obligation.  Had 
Patton,  merely  from  his  relation  of  co-obligor,  any  agency  or  au- 
thority to  request  the  plaintiff  to  pay  the  joint  debt,  so  as  to  sub- 
ject the  defendant  to  this  action  for  money  paid  to  his  use?  We 
can  find  no  authority  for  such  a  position.  The  law  will  certainly 
imply  a  request  to  pay  on  behalf  of  Patton,  who  was  the  principal 
in  the  bail  bond ;  but  not  on  behalf  of  the  defendant,  who  was  not 
a  privy,  but  is  a  mere  stranger  to  that  transaction.     It  seems  to 


UPON    PERSONS    NOT    PARTIES. 


457 


us  that  the  opinion  of  the  judge  was  correct,  and  therefore  the 
judgment  must  be  affirmed. 

A  third  person  officiously  paying  the  debt  of  another,  without  his  request, 
express  or  implied,  can  not  recover  the  amount  paid,  unless  the  debtor  rati- 
fies it  In  some  cases  it  is  held  that  for  the  debtor  to  take  advantage  of  the 
payment  is  not  sufficient  ratification;  while  other  cases  hold  that  this  is  suf- 
ficient, and  if  the  debtor  does  not  ratify,  the  debt  remains  unpaid  as  to  him, 
and  may  be  enforced  by  the  other  as  an  equitable  assignee.     22  Am.  &  ling. 

Encyc,  535-538.  „,    ,    ~«    ezri    •*.  u  u 

See  Hanner  v.  Douglas,  57-262.  In  Carter  v.  Black,  29—561,  it  was  held 
that  a  voluntary  endorser  could  not  recover  at  law  against  the  maker  of  a 
note,  if  compelled  to  pay  it;  but  he  might  recover  in  equity,  as  equitable 
assignee  or  bv  subrogation.  Carter  v.  Jones,  40—196.  Where  one  becomes 
bail  for  one  partner  and  has  the  debt  to  pay,  he  can  not  recover  from  the 
other  partner.  Foley  v.  Robards,  25—177;  unless  the  liability  is  assumed  tor 
the  firm.  Springs  v.  McCoy,  120—417;  so  bail  for  one  of  two  judgment 
debtors  is  not  a  suretv  for  the  other.  Jackson  v.  Hampton,  32—579.  An 
agent  for  collection  who  officiously  pays  the  debt  can  not  recover,  unless  it 
were  an  equitable  assignment.  Null  v.  Moore,  32—324.  This  rule  grows  out 
of  the  principle  that  consent  is  necessary  to  a  contract,  and  a  man  has  a 
risht  to  know  with  whom  he  is  dealing.  Clark  Cont.,  349;  2  Page  Cont.,  sec. 
832;  22  Am.  &  Eng.  Encyc,  537;  9  Cyc,  702;  23  L.  R.  A.,  120  and  note. 
Kenan  v.  Holloway,  16  Ala.,  53,  50  A.  D.,  162;  Neely  v.  Jones,  16  W.  Va., 
6?5  37  A  R.,  794;  Crumlish  v.  Cent.  Imp.  Co.,  38  W.  Va.,  390,  45  A.  b.  K., 
872,  23  L.  R.  A.,  123;  27  Cyc,  838. 

Executors  and  administrators.— The  employment  of  counsel  by  an 
executor  does  not  create  a  debt  against  the  estate,  but  it  is  a  personal  obliga- 
tion, and  he  may  be  allowed  for  such  expenses  on  settlement.  Uevane  v. 
Royal  52—426 ;  Kesler  v.  Hall,  64—60 ;  Lindsay  v.  Darden,  124—309 ;  Kelly  v. 
Odum  139—278.  So  for  money  had  and  received  or  other  liability  arising 
after  the  death  of  the  testator.  Hailey  v.  Wheeler,  49—159;  Beaty  v.  Gingles, 
53—302;  Hall  v.  Craige,  65—51;  Kerchner  v.  McRae,  80—219;  Tyson  v. 
Walston,  83—90;  Bank  v.  Morehead,  116—412.  Funeral  expenses,  2  Page 
Cont.,  sec.  833;  see  Implied  Contracts,  ante. 

Subcontractor.— The  owner  of  property  may,  under  the  statute  (Ke- 
visal,  2019.)  be  liable  to  subcontractor.  Wood  v.  R.  R.,  131— 48;  Lumber  Lo. 
v.  Hotel  Co.,  109—658;  Hardware  Co.  v.  Graded  Schools,  151—507. 

Sec.  2.  Interference  with  contract  relations. 

(180)    JONES   v.    STANLY, 
76  N.  C,  355—1877. 
Action  for  damages,  in  which  the  plaintiff  appealed. 

Rodman,  J.  It  was  decided  in  Haskins  v.  Royster,  70  N.  C, 
601,  that  if  a  person  maliciously  entices  laborers  or  croppers  to 
break  their  contracts  with  their  employer  and  desert  his  services, 
the  employer  may  recover  damage  against  such  person.  The  same 
reasons  cover  every  case  where  one  person  maliciously  persuades 
another  to  break  any  contract  with  a  third  person.  It  is  not  cop- 
fined  to  contracts  for  service.  In  the  present  case  the  plaintiff 
made  a  contract  with  the  Atlantic  &  North  Carolina  Railroad  Com- 
pany, of  which  the  defendant  was  president  and  superintendent, 
by  which  the  company  agreed  to  transport   from  points  on  their 


458  EFFECT    OF    CONTRACT. 

road  to  Morehead  City  a  large  number  of  cross-ties  which  plaintiff 
had  contracted  to  deliver  in  Cuba.  After  the  contract  had  been 
partly  performed  the  defendant,  being  still  president  and  superin- 
tendent of  the  company,  maliciously  and  for  the  purpose  of  injur- 
ing the  plaintiff,  as  the  jury  have  found,  refused  to  complete  the 
contract,  whereby  the  plaintiff  was  injured.  After  the  jury  had 
found  a  verdict  for  the  plaintiff  and  assessed  his  damages  the 
judge  arrested  the  judgment,  and  the  plaintiff  appealed.  In  this 
we  think  the  judge  erred  and  his  judgment  must  be  reversed. 

It  is  the  duty  of  this  court  to  give  such  judgment  as  it  appears 
in  the  record  that  the  court  below  should  have  given.  The  plaintiff 
moves  here  for  judgment  upon  the  verdict.  There  are  no  excep- 
tions by  defendant  to  the  judge's  charge,  and  it  does  not  appear 
that  he  asked  for  a  new  trial.  The  instructions  of  the  judge  on 
the  question  of  damages  are  not  full,  but  it  does  not  appear  that 
he  was  requested  to  give  any  others.  If  he  had  thought  the  dam- 
ages excessive,  he  would  have  set  the  verdict  aside  and  given  a 
new  trial  on  that  ground.  We  neither  do  nor  can  know  anything 
of  the  evidence,  and  if  we  did  we  could  not  set  aside  the  verdict 
and  give  a  new  trial  on  that  ground,  except  perhaps  where  it  ap- 
peared to  be  a  very  gross  case  of  excess. 

Judgment  below  reversed  and  a  judgment  in  this  court  for  the 
plaintiff  according  to  the  verdict. 

(181)   SWAIN  v.  JOHNSON, 

151  N.  C,  93,  65  S.  E.,  619—1909. 

Brown,  J.  We  deem  it  unnecessary  to  discuss  the  seventy  ex- 
ceptions set  out  in  the  record,  as  in  our  opinion  the  whole  case 
may  be  reviewed  in  passing  upon  the  correctness  of  His  Honor's 
ruling  in  granting  the  motion  to  nonsuit. 

The  plaintiff  contends  that  he  contracted  with  the  defendant 
Noble  to  purchase  all  the  pine  and  juniper  timber  on  certain  lands 
belonging  to  the  Cox  heirs,  said  Noble  being  their  attorney  in  fact, 
with  power  to  sell  the  land ;  that  the  defendants  West  and  John- 
son conspired  together  and  induced  Noble  to  violate  his  contract 
with  plaintiff  by  purchasing  the  lands  from  Noble  for  a  corpora- 
tion, the  West  Lumber  Co.,  in  which  West  and  Johnson  were  in- 
terested. Wherefore,  for  such  alleged  tort,  the  plaintiff  claims 
substantial  damages. 

The  principle  of  law  upon  which  plaintiff  founds  his  right  of 
action  is  thus  stated  in  Comyn's  Digest,  Action  on  Case  A:  "In 
all  cases  where  a  man  has  a  temporal  loss  or  damage  by  the  wrong 
of  another,  he  may  have  an  action  upon  the  case  to  be  repaired  in 
damages.     The  intentional   causing  such   loss   to  another,   without 


UPON    PERSONS    NOT   PARTIES.  459 

justifiable  cause,  and  with  the  malicious  purpose  to  inflict  it,  is  of 
itself  a  wrong." 

This  principle  has  been  applied  in  some  jurisdictions  to  the  vio- 
lation  of   contracts    for   personal   service,   and   was   so    applied   in 
this  court  in  Haskins  v.  Royster,  70  N.  C,  601,  although  by  a 
divided  court.     It  has  been  applied  to  the  malicious  enticing  away 
of  workmen ;  to  the  loss  of  a  contract  of  marriage  by  means  of  a 
false  and  malicious  letter;  to  maliciously  enticing  and  inducing  a 
wife  to  remain  away  from  her  husband,  and  to  maliciously  induc- 
ing an  opera  singer  to  abandon  her  contract;  but  we  find  no  case 
in  any  court  where  it  has  ever  been  applied  to  breaches  of  con- 
tracts to  convey  title  to  property.     It  is  true  that  in  Jones  v.  Stan- 
ly, 76  N.  C,  356,  it  was  applied  where  the  president  of  a  railroad 
company   maliciously   prevented  his   company    from   performing   a 
contract  of  carriage  of   freight,  and  in  that  case  Judge  Rodman 
says  "the  same  reasons  cover  every  case  where  one  maliciously 
persuades   another  to   break   any   contract   with   a   third   person." 
This  is  but  a  dictum,  and  in  commenting  on  it  the  Supreme  Court 
of  Kentucky,  in  a  well-considered  opinion  in  Chambers  v.   Bald- 
win, 11  L.  R.  A.,  547,  says:     "We  have  seen  no  other  case  where 
the  doctrine  is  stated  so  broadly."     This  Kentucky  authority,  with 
the  voluminous  notes  of  the  annotator  and  the  numerous  cases 
cited,  support  fully  the  text  of  Judge  Cooley,  that  "an  action  can 
not,  in  general,  be  maintained  for  inducing  a  third  person  to  break 
his  contract  with  the  plaintiff;  the  consequences,  after  all,  being 
only  a  broken  contract,   for  which  the  party  to  the  contract  may 
have  his  remedy  by  suing  upon  it."     Cooley  on  Torts,  497.     To 
this  rule  there  are  but  two  generally  recognized  exceptions — one 
where  servants  and  apprentices  are  induced   from  malicious  mo- 
tives to  leave  their  master  before  the  term  of  service  expires,  and 
the  other  arises  where  a  person  has  been  procured,  against   his 
will  or  contrary  to  his  purpose,  by  coercion  or  deception  of  an- 
other, to  break  his  contract.     Green  v.  Button,  2  Cromp.  M.  &  R., 
707;  Ashley  v.  Dixon,  48  N.  Y.,  430.    This  is  based  upon  the  idea 
that  a  person  has  no  -right  to  be  protected  against  competition,  but 
he  has  a  right  to  be  free  from  malicious  and  wanton  interference 
in  his  private  affairs. 

If  the  disturbance  or  loss  comes  as  the  result  of  competition  or 
the  exercise  of  like  rights  by  others,  it  is  damnum  absque  injuria. 
Walker  v.  Cronin,  107  Mass.,  564.  It  is  only  where  the  contract 
would  have  been  fulfilled  but  for  the  false  and  fraudulent  repre- 
sentations of  a  third  person  that  the  action  will  lie  against  such 
third  person.  Benton  v.  Pratt,  2  Wend.,  385,  citing  Pasley  v. 
Freeman,  3  T.  R.,  51.  The  case  of  Ashley  v.  Dixon,  supra,  is  in 
every  respect  similar  to  the  one  under  consideration.     In  that  case 


460  EFFECT    OF    CONTRACT. 

the  New  York  court  holds :  "If  A  has  agreed  to  sell  property  to 
B,  C  may  at  any  time  before  the  title  has  passed  induce  A  to  sell 
it'to  him  instead;  and  if  not  guilty  of  fraud  or  misrepresentation, 
he  does  not  incur  liability,  and  this  is  so,  although  C  may  have 
contracted  to  purchase  the  property  of  B.  B  can  not  maintain  an 
action  upon  the  latter  contract,  as  he  can  not  perform  and  can 
only  look  to  A  for  a  breach  of  the  former."  This  doctrine  is  sup- 
ported by  abundant  authority.  Cooley  on  Torts,  supra;  Otis  v. 
Raymond,  3  Conn.,  413;  Young  v.  Scovell,  8  J.  R.,  25  N.  Y. ; 
Johnson  v.  Hitchcock,  15  J.  R.,  185;  Gallager  v.  Brunell,  6  Cow., 
347;  Hutchins  v.  Hutchins,  7  Hill,  104. 

Tested  by  these  generally  accepted  principles,  the  plaintiff  has 
entirely  failed,  for  he  does  not  allege,  and  there  is  not  a  shred  of 
evidence  to  prove,  that  Noble  was  ready  and  willing  to  perform 
his  alleged  contract  with  the  plaintiff,  but  that  he  was  prevented, 
against  his  will,  from  so  doing  by  the  false  and  fraudulent  repre- 
sentations of  West  and  Johnson,  or  either  of  them.     .     .     . 

Affirmed. 

"If  one  contracts  to  render  personal  services  for  another,  any  third  person 
who  maliciously,  that  is,  without  a  lawful  justification,  induces  the  party 
who  contracted  to  render  the  service  to  refuse  to  do  so,  is  liable  to  the  in- 
jured partv  for  damages.  It  extends  impartially  to  every  grade  of  service, 
from  the  most  brilliant  and  best  paid  to  the  most  homely,  and  it  shelters  our 
nearest  and  tenderest  domestic  relations  from  the  interference  of  malicious 
intermeddlers.  It  is  not  derived  from  any  idea  of  property  by  the  one  party  in 
the  other,  but  is  an  inference  from  the  obligation  of  a  contract  freely  made 
by  competent  persons.  Haskins  v.  Royster,  70—601,  citing  Walker  v.  Cronin, 
107  Mass.,  555.  "Without  lawful  justification"  is  sufficient  to  constitute 
malice.  Holder  v.  Mfg.  Co.,  135—392.  Furnishing  a  servant  the  means  to 
leave  the  premises  would  not  of  itself  be  sufficient  evidence  of  enticing.  Mor- 
gan v.  Smith,  77—37;  Revisal,  3365,  3374.  Violation  of  the  statute  is  indict- 
able, State  v.  Rice,  76—194 ;  State  v.  Daniel,  89—553 ;  even  though  the  servant 
was  a  minor,  State  v.  Harwood,  104—724;  but  not  where  the  minor  leaves  un- 
der the  command  of  the  father,  State  v.  Anderson,  10-1 — 771.  The  statute 
does  not  apply  where  the  servant  has  not  entered  upon  the  service,  but  the 
third  person  would  be  liable  for  damages  for  inducing  the  servant  to  break 
his  contract.  Sears  v.  Whitaker,  136—37;  Biggers  v.  Matthews,  147—299; 
Smith  v.  Ice  Co.,  159—151. 

Some  courts  have  held  that  this  does  not  apply  except  in  case  of  master 
and  servant.  Clark  Cont,  349.  But  it  has  become  an  important  subject, 
rowing  to  the  many  ways  in  which  contracts  may  be  interfered  with,  as  in 
conspiracies,  unions,  strikes,  boycotts,  blacklisting,  etc.  See  3  Page  Cont., 
sec.  1323  et  seq.;  16  Am.  &  Eng.  Encyc,  1109  et  seq.;  1  Cyc,  662  et  scq.; 
26  Cyc,  1580;  11  L.  R.  A.,  545,  550;  12  L.  R.  A.,  193;  19  L.  R.  A.,  408;  20  L. 
R.  A.,  342 ;  21  L.  R.  A.,  233 ;  25  L.  R.  A.,  414 ;  28  L.  R.  A.,  464 ;  43  L.  R.  A, 
797;  62  L.  R.  A.,  673;  Lumlev  v.  Gve,  2  E.  &  B.,  216,  1  E.  R.  C,  707;  Allen  v. 
Flood,  1898,  A.  C,  1,  17  E."  R.  C,  284;  Pollock  Cont.,  224;  Mord.  &  Mc. 
Rem.,  582. 

Enticing  awav  apprentice,  Revisal,  193 ;  McKav  v.  Bryson,  27 — 216 ;  Moore 
v.  Love.  48—215 ;  Stout  v.  Woody,  63—37. 

Fraudulent  removal  of  debtor,  Revisal,  1939;  Godsey  v.  Bason,  30—260; 
March  v.  Wilson,  44—143;  Wiley  v.  McRee,  47—349;  Moore  v.  Rogers,  48— 
90.  51—297. 

Landlord  and  tenant. — Revisal,  3366,  3367. 


UPON    PERSONS    NOT    PARTIES. 


461 


Sec.  3.  Conferring  rights  upon  third  persons. 

1.  Right   to    sue   upon   a   contract   to   which   he   is   not   a   party. 

(182)   SAVAGE  to  the  use  of  BARRETT  v.  CARTER, 

64  N.  C,  196—1870. 
Action  of  debt,  in  which  there  was  a  judgment  of  nonsuit,  and 
plaintiff  appealed. 

Rodman,  J.     This  was  an  action  of  debt,  brought  before  the 
adoption  of  the  Code  of  Civil  Procedure  by  which  the  law  in  re- 
spect to  parties  is  materially  altered.     We  are  therefore  to  decide 
the  question  presented  on  the  law  as  it  stood  when  the  action  was 
brought.     By  its  express  provisions  The  Code  does  not  apply  to 
such  actions,  until  after  judgment.     The  bond  sued  on  was  payable 
to  "Mills  E.  G.  Barrett,  agent  of  Wm.  R.  Savage,"  for  the  hire 
of  certain  slaves.     It  is  a  deed  poll ;  it  does  not  appear,  except  in- 
ferentially,  to  whom  the  slaves  belonged.     Therefore  Whitehead  v. 
Riddick,  34  N.  C,  95,  which  was  a  deed  inter  partes,  is  not  ap- 
plicable.    It  is  said  in  1  Chit.  PL,  3,  "If  a  bond  be  given  to  A, 
conditioned  for  the  payment  of  money  to  him  for  the  use  or  bene- 
fit of  B,  or  conditioned  to  pay  the  money  to  B,  the  action  must  be 
brought  in  the  name  of  A,  and  B  can  not  sue  for  or  release  the 
demand."     The   reasons   for  this   doctrine   are  previously   stated. 
Conformable  to  it  are  several  decisions  in  this  court.     In  Grist  v. 
Backhouse,  20  N.  C,  496,  the  note  was  payable  to  "Richard  G. 
Grist,  agent  of  his  assignee;"  in  Dowd  v.  Wadsworth,  13  N.  C, 
130,  it  was  payable  to  A,  guardian  of  B ;  in  Waddell  v.  Moore,  24 
N.  C,  261,  it 'was  payable  to  A,  executor  of  B.     In  the  two  first 
of  these  cases  it  was  held  that  the  legal  payee  was  the  only  proper 
plaintiff,  and  in  the  last,  that  the  executor  need  not  describe  him- 
self as  executor,  and  such  description  was  surplusage.     We  think 
ourselves  bound  by  these  authorities,  especially  by  Grist  v.  Back- 
house, as  being  most  closely  in  point,  in  the  present  case. 
The  judgment  below  must  be  Affirmed. 

See  also  Winslow  v.  Fenner,  61—565:  6  R.  C.  L.,  881. 

DRAUGHAN  v.  BUNTING, 

Ante  (51). 

Where  monev  or  property  is  placed  in  the  hands  of  a  person  for  the  benefit 
of  a  third,  the' latter  mav  sue.  Stanley  v.  Hendricks,  35—86:  Threadgill  v. 
McLendon,  76—24;  Mason  v.  Wilson,  84—51:  Voorhees  v.  Porter,  134,  p.  604. 


462  EFFECT    OF    CONTRACT. 

(183)  PEACOCK  v.  WILLIAMS, 
98  N.  C,  324,  4  S.  E.,  550—1887. 
Civil  action  to  recover  amount  due  for  lumber.  Plaintiff  fur- 
nished lumber  to  one  Mrs.  Luke  to  build  a  house;  Mrs.  Luke 
made  an  agreement  with  the  defendant,  as  a  member  of  the  firm 
of  Williams  &  Buchanan,  by  which  she  executed  to  them  a  note 
and  mortgage  for  $800,  on  condition  that  they  should  receipt  and 
deliver  all  bills  and  accounts  due  them  by  Mrs.  Luke,  and  pay 
over  the  balance  to  her,  and  surrender  to  her  the  house  built  for 
her  "free  from  all  liens  and  encumbrances  whatever."  The  plain- 
tiff claimed  that  the  defendant  should  pay  his  claim  by  reason  of 
the  above  agreement.  There  was  a  verdict  and  judgment  for  the 
plaintiff,  and  the  defendant  appealed. 

Smith,  C.  J.  It  will  be  seen  from  the  fourth  allegation  of  the 
complaint  and  its  plain  and  distinct  reference  to  this  agreement, 
and  from  its  introduction  in  support  of  the  demand  that  the  plain- 
tiff's right  of  action  rests  entirely  upon  the  undertaking  on  the 
part  of  Williams  &  Buchanan  to  surrender  the  house  to  the  owner 
of  the  lot,  "free  from  all  liens  and  encumbrances  whatever."  It 
is  also  apparent  that  the  fund  provided  for  this  purpose  is  the  note 
executed' by  the  owner  of  the  lot  and  secured  in  the  manner  speci- 
fied in  the  contract.  This  security  must  be  understood,  as  meant 
in  the  charge,  that  if  "they  (the  jurors)  found  that  he  (the  de- 
fendant) had  such  funds,  sufficient  in  amount,  and  had  contracted 
with  her  (Mary  F.  Luke)  to  pay  it,  then  they  would,  in  answer 
to  the  issue,  say  how  much  was  due  the  plaintiff  from  the  de- 
fendant." 

In  our  opinion  the  point  is  well  taken  that  the  defendant  in- 
curred, under  his  agreement  and  from  his  possession  of  the  note, 
no  personal  liability  which  the  plaintiff  can  enforce  in  this  form 
of  action  ex  contractu.  The  agreement  is  in  substance  one  for  the 
indemnity  of  the  owner  of  the  property  against  its  being  subjected 
to  the  asserted  lien,  and  is  solely  between  the  parties  to  it,  with 
whom  the  plaintiff  is  not  in  privity. 

In  Morehead  v.  Wriston,  73  N.  C,  398,  an  incoming  partner 
agreed  with  the  others  that  the  new  firm  should  assume  and  be- 
come liable  for  the  debts  due  by  the  old  firm,  and  this  upon  a  suf- 
ficient consideration ;  and  it  was  held  that  a  creditor  of  the  old 
firm  could  not  sue  on  the  contract.  Reade,  J.,  remarking,  "that 
the  agreement  must  be  between  the  new  partner  and  the  creditor, 
and  upon  a  consideration  moving  from  the  creditor."  See  also 
Parker  v.  Shuford,  76  N.  C,  219. 

The  case  does  not  come  within  that  class  wherein  when  money 
or  an  article  of  agreed  money's  worth,  as  money,  is  deposited  with 


UPON    PERSONS    NOT    PARTIES.  463 

one  person  to  be  paid  to  another,  and  the  action  is  permitted  for  a 
recovery  as  of  money  received  for  his  use  under  an  implied  con- 
tract to  pay  according  to  numerous  rulings.  Draughan  v.  Bunting, 
31  N.  C,  10;  Carroway  v.  Cox,  44  N.  C,  173. 

Yet  there  are  qualifications  of  the  principle,  even  in  case  of  such 
reception  of  money.  Thus  when  an  agent  received  money  from  his 
principal  with  instructions  to  pay  it  to  a  certain  creditor,  and  the 
agent  made  a  different  disposition  of  it,  and  no  demand  was  made 
by  such  creditor  until  after  the  agent  had  accounted  with  his  prin- 
cipal, it  was  decided  that  the  creditor  could  not  look  to  the  agent 
for  such  money.     Dixon  v.  Pace,  63  N.  C,  603. 

So  again  in  Strayhorn  v.  Webb,  47  N.  C,  199,  it  is  ruled  that 
until  the  creditor  for  whose  use  the  deposit  is  made  does  some  act, 
whereby  he  ratifies  the  receiving  "so  as  to  extinguish  the  debt  and 
make  the  money  his  own,"  he  can  not  maintain  an  action  against 
the  party  receiving.     White  v.  Hunt,  64  N.  C,  496. 

Here  there  is  no  promise  to  pay  the  plaintiff,  and  the  defendant 
has  no  funds  with  which  to  make  the  payment,  but  only  a  note 
secured  from  the  party  by  which  they  might  be  derived,  and  the 
undertaking  is  to  exonerate  the  property  from  liens  and  encum- 
brances, and  it  can  be  enforced,  as  it  can  be  released  by  the  party 
with  whom  the  contract  is  made,  and  her  liability  for  the  materials 
furnished,  not  personal,  but  by  reason  of  the  lien,  remains  as  be- 
fore unaffected  by  the  provision  made  for  relieving  the  premises 
therefrom. 

The  plaintiff  vindicates  his  claim  to  follow  the  fund  and  cites 
numerous  cases  in  its  support  decided  in  the  courts  of  equity.  But 
this  is  not  the  case  presented  in  the  complaint,  which  is  one  that 
under  our  former  practice  would  have  been  an  action  at  law,  and 
depends  not  upon  an  equity,  but  upon  contract.  An  immediate 
judgment  is  demanded,  and  this  because  the  defendant  holds  a 
personal  security  of  the  owner  of  the  lot  and  may  have  realized 
nothing  under  it  wherewith  to  make  the  payment.  In  no  point  of 
view  can  the  plaintiff  maintain  his  action,  and  there  is  error  in 
refusing  to  dismiss  it. 

The  judgment  must,  therefore,  be  reversed. 

Error.  Reversed. 

A  rented  a  house,  and  afterwards  associated  B  and  C  with  him  in  business, 
and  the  firm  occupied  the  house ;  the  owner  could  not  hold  B  and  C  for  the 
rent.  Pierce  v.  Alspaugh,  83—258.  A  promise  to  pay  a  debt  barred  by  the 
statute  of  limitations  must  be  made  to  the  creditor,  and  not  to  a  third  per- 
son. Parker  v.  Shuford,  76—219 ;  Kirby  v.  Mills,  78—124.  A  promise  made 
by  the  wife  to  the  creditor  in  the  presence  of  her  husband  to  pay  the  debt 
of  her  husband,  out  of  her  own  property,  and  by  reason  of  which  he  forbore 
to  enforce  the  debt  against  the  husband,  is  not  valid  as  a  married  woman's 
contract;  and  if  made  to  the  husband,  the  creditor  could  not  enforce  it  be- 
cause not  a  party  to  it.    Coffey  v.  Shuler,  112 — 622. 


464  EFFECT    OF    CONTRACT. 


(184)  WOODCOCK  v.  BOSTIC, 

118  N.  C,  822,  24  S.  E.,  362—1896. 

Civil  action  on  contract.  The  defendant  demurred  to  the  com- 
plaint;  the  demurrer  was  overruled,  and  defendant  appealed. 

Montgomery,  J.  On  the  2d  of  August,  1890,  J.  B.  Bostic 
conveyed  to  D.  D.  Suttle  a  tract  of  land  for  the  price  of  $5,500, 
Suttle  at  the  same  time  executing  his  bond  for  the  purchase-money 
and  securing  the  same  by  a  deed  of  trust  on  the  land.  Bostic  as- 
signed the  bond  to  the  plaintiff,  Julia  E.  Woodcock,  for  value. 
Afterwards  the  defendant  Ray  became  the  purchaser  of  the  land 
from  Suttle  or  his  grantee,  and  entered  into  a  written  agreement 
with  Bostic  and  Suttle  in  which  he,  after  reciting  the  indebtedness 
of  Bostic  and  Suttle  to  the  plaintiff,  and  declaring  that  it  was 
secured  by  a  deed  of  trust  upon  the  land  which  he  had  bought 
subject  to  the  same,  assumed  and  agreed  with  Bostic  and  Suttle 
to  pay  the  aforesaid  debt  of  Julia  E.  Woodcock,  and  also  to  pro- 
tect and  save  Bostic  and  Suttle  from  any  and  all  liability  by  rea- 
son of  or  from  the  same.  Bostic  and  Suttle  assigned  and  trans- 
ferred this  assumption  and  guaranty  to  the  plaintiff. 

This  action  was  commenced  by  the  plaintiff  against  the  defend- 
ant upon  his  assumption  and  guaranty.  It  is  in  form  an  action  ex 
contractu.  The  bond  of  Suttle  to  Bostic,  which  Bostic  assigned 
to  the  plaintiff,  is  only  mentioned  in  the  complaint  as  a  recital  to 
explain  what  was  the  exact  amount  of  defendant's  assumption  and 
that  the  debt  was  still  dne.  The  trustee  named  in  the  deed  which 
secured  the  bond  is  not  party  to  the  action,  nor  is  there  any  prayer 
for  the  foreclosure  of  the  trust,  and  for  a  personal  judgment 
against  the  defendant  Ray,  for  any  deficiency.  Neither  is  there 
any  equitable  subrogation  invoked,  by  which  the  assumption  of  the 
defendant  might  be  subjected  to  the  satisfaction  of  the  bond.  This 
action  is  under  the  old  form  of  assumpsit,  and  is  against  the  de- 
fendant on  his  promise  made  to  Bostic  and  Suttle  under  their  as- 
signment of  the  same  to  the  plaintiff.  The  plaintiff  insists  that 
she  can  recover  both  on  the  assignment  of  Bostic  and  Suttle  to  her 
of  the  defendant's  assumption  and  on  the  broad  ground  that  the 
defendant  is  liable  to  her  directly,  even  if  the  assignment  of  the 
assumption  of  the  defendant  had  not  been  made  to  her  by  Bostic 
and  Suttle,  because  of  the  promise  made  by  the  defendant  to  Bos- 
tic and  Suttle  to  pay  her  debt.  We  will  discuss  the  last  proposi- 
tion first. 

The  proposition  is  that,  at  law,  a  third  person  may  maintain  an 
action  upon  the  promise  of  one  person  to  another  for  the  advan- 
tage and  benefit  of  the  third.     There  is  conflict  of  judicial  opinion 


UPON    PERSONS    NOT    PARTIES.  465 

on  the  question.  The  affirmative  is  held  in  many  of  the  States, 
including  New  York,  Burr  v.  Beers,  24  N.  Y.,  178.  In  others  of 
the  States,  including  North  Carolina,  the  contrary  is  held.  Pea- 
cock v.  Williams,  98  N.  C,  324;  Morehead  v.  Wriston,  73  N.  C, 
398.  But  the  plaintiff  insists  further  that  Suttle  ought  to  be  con- 
sidered a  mortgagor  and  the  defendant  Ray  a  vendee  who  has  pur- 
chased and  agreed  to  pay  the  mortgage  debt  to  Bostic,  the  latter  to 
be  considered  a  mortgagee;  and  that  between  them  Bostic  has  be- 
come the  surety,  and  Ray  the  principal  debtor,  and  that  the  plain- 
tiff stands  in  the  shoes  of  Bostic  by  virtue  of  his  assignment  of  his 
bond  to  her,  and  that  therefore  she  ought  to  be  subrogated  to  the 
rights  of  Bostic,  and  have  the  assumption  of  Ray  subjected  to  the 
payment  of  the  plaintiff's  debt.  This  is  a  sound  principle  of 
equity.  In  New  Jersey  and  Massachusetts  it  has  been  held  that 
the  liability  of  the  grantee  of  a  mortgagor  who  has  promised  and 
assumed  to  pay  the  mortgage  debt  can  be  enforced  in  equity  by  the 
mortgagee  or  his  assignee  by  the  application  of  the  principle  of 
equitable  subrogation.  Hayden  v.  Snow,  15  Fed.  Rep.,  70.  In 
the  case  of  Keller  v.  Ashford,  133  U.  S.,  610,  the  same  principle 
is  declared,  and  Mr.  Justice  Gray,  who  delivered  the  opinion, 
quoted  with  approval  from  Cromwell  v.  St.  Barnabas  Hospital  (N. 
J.  Court  of  Errors),  as  follows:  "The  right  of  a  mortgagee  to 
enforce  payment  of  the  mortgage  debt,  either  in  whole  or  in  part, 
against  the  grantee  of  the  mortgagor  does  not  rest  upon  any  con- 
tract of  the  grantee  with  him  or  with  the  mortgagor  for  his  bene- 
fit." The  purchaser  of  land  subject  to  mortgage,  who  assumes  and 
agrees  to  pay  the  mortgage  debt,  becomes,  as  between  himself  and 
his  vendor,  the  principal  debtor,  and  the  liability  of  the  vendor 
as  between  the  parties  is  that  of  surety.  In  equity,  a  creditor  may 
have  the  benefit  of  all  collateral  obligations  for  the  payment  of  the 
debt  which  a  person  standing  in  the  relation  of  a  surety  for  others 
holds  for  his  indemnity.  It  is  in  the  application  of  this  principle 
that  decrees  for  deficiency  in  foreclosure  suits  have  been  made 
against  subsequent  purchasers  who  have  assumed  the  payment  of 
the  mortgage  debt,  and  thereby  become  principal  debtors  as  be- 
tween themselves  and  their  grantors.  But  the  plaintiff  here  has 
not  brought  her  action  in  this  form  and  with  this  end  in  view. 
Her  action  is  not  for  equitable  subrogation  to  get  the  benefit  of  a 
security  held  by  her  debtor,  Bostic.  She  alleges  in  her  complaint 
that  she  owns  the  assumption  and  promise  made  by  Ray  to  Bostic 
and  Suttle,  and  seeks  to  enforce  it  against  Ray  in  her  own  right 
at  law,  without  any  prayer  for  equitable  relief  or  stating  any  ele- 
ment of  equity  in  her  complaint. 

She  can  not,  therefore,  have  equitable  relief,  because  she  has 
prayed  for  none. 


466  EFFECT    OF    CONTRACT. 

We  will  now  take  up  and  discuss  the  proposition  of  the  plaintiff 
that  she  can  recover  upon  the  assignment  of  the  assumption  and 
guaranty  of  the  defendant,  made  to  Bostic  and  Suttle,  and  by  them 
transferred  to  her.  The  question  for  decision  then  is,  is  the  as- 
sumption and  guaranty  assignable?  If  it  is,  then  the  plaintiff  can 
maintain  her  action ;  if  it  is  not,  she  must  fail.  Section  55,  C.  C. 
P.,  which  is  section  177  of  The  Code,  with  a  slight  alteration,  was 
almost  a  literal  transcript  of  sections  111  and  112  of  the  New 
York  Code  when  our  Code  of  Civil  Procedure  was  adopted.  Those 
sections  of  the  New  York  Code  produced  so  much  litigation  and 
involved  the  courts  in  so  great  perplexities  in  their  attempts  to 
arrive  at  some  uniformity  of  decision  in  construing  them,  that 
the  legislature  of  that  State,  to  declare  with  some  degree  of  cer- 
tainty what  things  might  be  the  subject  of  assignment,  repealed 
them  and  enacted  in  their  place  (now  section  1910  of  the  New 
York  Code)  the  following  provision:  "Any  claim  or  demand  can 
be  transferred  except  in  one  of  the  following  cases:  1.  When  it  is 
to  recover  damages  for  personal  injury  or  for  a  breach  of  promise 
to  marry.  2.  When  it  is  founded  on  a  grant  which  is  made  void 
by  a  statute  of  the  State,  or  upon  a  claim  to  or  interest  in  real 
property,  a  grant  of  which  by  the  transfer  would  be  void  by  such 
a  statute.  3.  Where  a  transfer  thereof  is  expressly  prohibited  by 
a  statute  of  the  State,  or  of  the  United  States,  or  would  contra- 
vene public  policy."  In  New  York  it  might  be  that  under  their 
statute  an  agreement  and  assumption  like  the  one  sued  on  in  this 
action  would  be  the  subject  of  assignment.  But  in  North  Carolina 
we  have  no  such  statute.  Section  177  of  The  Code  contains  the 
law  by  which  we  are  to  be  governed  in  arriving  at  a  conclusion. 
We  have  no  decisions  of  this  court  upon  that  section  of  The  Code 
bearing  directly  on  this  particular  point  raised  in  this  case,  nor  any 
general  rule  of  construction  of  this  statute  by  which  we  might  be 
aided  in  our  investigations.  In  Petty  v.  Rousseau,  94  N.  C,  355, 
it  would  seem  that  something  like  a  general  rule  had  been  laid 
down,  but  Ashe,  J.,  who  wrote  the  opinion  in  that  case,  was  inad- 
vertent to  the  change  which  had  been  made  in  the  New  York  Code 
by  the  repeal  of  sections  111  and  112  thereof,  and  the  adoption  of 
section  1910,  which  we  have  quoted  in  full  above,  in  their  place, 
and  quotes  section  1910  in  full  as  being  the  annotations  of  Mr. 
Bliss  upon  sections  111  and  112.  He  quoted  by  mistake  the 
amended  law  of  New  York,  instead  of,  as  he  supposed,  the  con- 
struction which  Mr.  Bliss  put  upon  sections  111  and  112,  which 
had  been  repealed.  So,  the  opinion  in  that  case  does  not  aid  us, 
for  it  was  really  based  on  the  then  statutory  law  of  New  York. 
Upon  a  merely  cursory  examination  into  the  matter  it  will  appear 
that  many  inconsistencies  and  incongruities  must  attend  the  assign- 


UPON    PERSONS    NOT    PARTIES. 


467 


ment  of  an  agreement  like  the  one  before  us.     If  an  assignee  can 
make  no  possible  use  of  the  thing  assigned  to  him,  the  assignment 
is  a  vain  thing.     If  the  courts  could  not  and  would  not  entertain 
a  suit  at  the  hands  of  an  assignee,  because  of  the  uselessness  to 
him  in  any  event  of  the  thing  transferred,  how  can  it  be  said  that 
such  a  thing  is  assignable?     The  law  could  not  say  that  a  matter, 
even  though  based  on  contract,  could  be  assigned  if  it  could  not 
possibly  be  of  use  to  the  assignee.     The  law  means,  when  it  says 
that  a  thing  is  assignable,  that  the  assignment  carries  with  it  rights 
of  property,  and  that  those  rights  can  be  enforced  in  the  courts. 
It  would  seem  to  be  clear,  too,  that  a  thing,  to  be  assignable,  must 
be  the  subject  of  assignment  generally— to  every  one— and  not  be 
confined   in   its   application  to   particular  persons.      It   can   not   be 
that  the  same  subject-matter  of  assignment  can  be  assigned  to  one 
person  and  not  to  another  person.    It  is  difficult  to  understand  how 
the  subject  of  assignment  can  be  limited  in  its  transference  to  par- 
ticular persons — good  if  assigned  to  some  persons,  and  of  no  avail 
if  assigned  to  others.  Now  what  use  could  a  stranger  make  of  the 
agreement  sued  on  in  this  case,  if  it  had  been  assigned  to  him  in- 
stead of  to  the  plaintiff?     Suppose  a  stranger  was  the  owner  by 
assignment  of  this  agreement  and  had  brought  suit  upon  it,  what 
would  his  complaint  be,  and  what  kind  of  judgment  would  he  pray 
for?     The  complaint  would  have  to  state  that  the  defendant  had 
promised  to  pay  a  note  due,  not  to  himself,  but  to  Mrs.  W.,  and 
that  he  was  the  owner  by  assignment  from  Bostic  and  Suttle  of 
the  defendant's  promise  to  do  so.    He  could  not  demand  judgment 
that  the  money  be  paid  to  him,  because  his  complaint  stated  that  it 
was  due  to  Mrs.  W.     He  could  not  ask  that  the  money  be  paid  to 
Mrs.  W.,  for  he  could  not  prosecute  an  action  in  her  name,  nor 
have  any  judgment  pronounced  for  or  against  her  in  a  suit  where 
she  was  not  a  party.     In  truth,  the  court  could  give  no  judgment. 
So,  looking  at  the  matter  in  all  its  bearings,  we  are  constrained  to 
say  that  the  assumption  and  promise  sued  on  in  this  action  is  en- 
tirely personal  to  Bostic  and  Suttle,  with  whom  it  was  made,  and 
is  not  assignable,  although  it  would  pass  to  the  personal  represen- 
tative of  Bostic  in  case  of  his  death,  and  that  the  plaintiff  can  not 
■  maintain  this  action  upon  it.     His  Honor  erred  in  overruling  the 
demurrer  of  the  defendant.  Error. 

In  Woodcock  v.  Merrimon,  122—731.  the  plaintiff  asked  for  a  sale  of  the 
land  bv  the  trustee  in  the  deed  of  trust  executed  by  Suttles ;  and  in  Yv  ood- 
cock  v^  Bostic,  128—243,  the  equitable  remedy  referred  to  in  the  above  opinion 
was  resorted  to. 

"The  prevailing  rule  in  the  United  States  is  that  where  a  grantee  of  mort- 
gaged premises  has  agreed  with  the  vendor  to  assume  the  mortgage,  the 
mortgagee  mav  recover  against  him.  either  in  law  or  in  equity.  Such  recov- 
erv  is  allowed  generallv  on  one  of  two  principles:  namely,  upon  the  theory 
of  equitable  subrogation,  or  upon  the  theory  that,  the  promises  having  been 


468  EFFECT    OF    CONTRACT. 

made  for  his  benefit,  the  mortgagee  may  sue  upon  it."  20  Am.  &  Eng.  Encyc, 
992.  Both  doctrines  are  discussed  and  numerous  cases  cited  on  pages  993 — 
1000;  27  Cyc,  1749.  That  the  mortgagee  may  sue  him  personally,  see  6  L. 
R.  A.,  610,  and  notes ;  7  L.  R.  A.,  33 ;  29  L.  R.  A.,  851  ;  37  L.  R.  A.,  862 ;  but 
not  unless  transfer  was  assented  to  by  mortgagee.  Keller  v.  Ashford,  133 
U.  S.,  610.  Our  court  seems  to  have  adopted  the  subrogation  theory,  except 
where  there  is  an  understanding  with  the  mortgagee.  Baber  v.  Hanie,  163— 
588;  as  to  indemnity  contracts,  see  Clark  v.  Bonsall,  157 — 270,  48  L.  R.  A. 
(N.  S.),  191;  Supply  Co.  v.  Lumber  Co.,  160—428,  42  L.  R.  A.  (N.  S.),  707; 
6  R.  C.  L.,  890. 

(185)  GORREIX  v.  WATER  SUPPLY  CO., 

124  N.  C,  328,  32  S.  E.,  720,  46  L.  R.  A.,  513,  70  A.  S.  R.,  598—1899. 

Civil  action  for  damages  caused  by  fire  through  negligent  fail- 
ure of  defendant  to  furnish  sufficient  pressure.  The  defendant 
had  made  a  contract  with  the  city  of  Greensboro  to  furnish  the 
city  "with  pure  and  wholesome  water  for  the  use  of  its  citizens 
and  of  force  at  all  times  sufficient  to  protect  the  inhabitants  of  the 
city  against  loss  by  fire."  The  plaintiff  was  a  citizen  of  said  city 
and  paid  taxes  with  other  citizens  for  this  water  supply,  and  her 
property  was  destroyed  by  fire  on  account  of  defendant's  failure 
to  comply  with  its  contract.  There  was  a  demurrer  to  the  com- 
plaint, which  was  overruled,  and  defendant  appealed. 

Clark,  J.  (after  stating  the  allegations  of  the  complaint).  The 
demurrer  as  far  as  it  relates  to  the  merits  of  the  case  is  substan- 
tially that  the  complaint  has  stated  no  cause  of  action : 

(1)  Because  the  plaintiff,  though  a  citizen  and  taxpayer  of 
Greensboro  (as  alleged  in  the  complaint),  is  neither  a  party  nor 
privy  to  the  contract,  the  breach  of  which  is  the  foundation  of  the 
action. 

(2)  The  failure  of  the  defendant  to  furnish  water  was  not  the 
proximate  cause  of  the  plaintiff's  loss. 

It  is  true  the  plaintiff  is  neither  a  party  nor  privy  to  the  con- 
tract, but  it  is  impossible  to  read  the  same  without  seeing  that,  in 
warp  and  woof,  in  thread  and  filling,  the  object  is  the  comfort, 
ease  and  security  from  fire  of  the  people,  the  citizens  of  Greens- 
boro. This  is  alleged  by  the  eleventh  paragraph  of  the  complaint, 
and  is  admitted  by  the  demurrer.  The  benefit  to  the  nominal  con- 
tracting party,  the  city  of  Greensboro,  as  a  corporation,  is  small  in 
comparison,  and  taken  alone,  would  never  have  justified  the  grants, 
concessions,  privileges,  benefits  and  payments  made  to  the  water 
company.  Upon  the  face  of  the  contract,  the  principal  beneficiaries 
of  the  contract  in  contemplation  of  both  parties  thereto  were 
the  water  company  on  the  one  hand  and  the  individual  citizens  of 
Greensboro  on  the  other.  The  citizens  were  to  pay  the  taxes  to 
fulfill   the   money   consideration   named,   and    furnishing  the   indi- 


UPON    PERSONS    NOT    PARTIES.  469 

vidual  citizens  with  adequate  supply  of  water  and  the  protection 
of  their  property  from  fire  was  the  largest  duty  assumed  by  the 
company.  One  not  a  party  or  privy  to  a  contract,  but  who  is  a 
beneficiary  thereof,  is  entitled  to  maintain  an  action  for  its  breach. 
This  has  been  sustained  by  many  decisions  elsewhere.  Tillis  v. 
Harrison,  104  Mo.,  270;  Lawrence  v.  Fox,  20  N.  Y.,  268;  Simp- 
son v.  Brown,  68  N.  Y.,  355;  Vrooman  v.  Turner,  69  N.  Y.,  280; 
Wright  v.  Terry,  23  Fla.,  160;  Austin  v.  Seligman,  18  Fed.  Rep., 
519;  Burton  v.  Larkin,  36  Kans.,  246;  and  even  when  the  bene- 
ficiary is  only  one  of  a  class  of  persons,  if  the  class  is  sufficiently 
designated.  Johannes  v.  Insurance  Companies,  66  Wis.,  50.  It 
was  considered  though  without  decision  by  this  court  in  Haun  v. 
Burrell,  119  N.  C,  544,  548,  and  Sams  v.  Price,  Ibid.,  572.  Es- 
pecially is  this  so  when  the  beneficiaries  are  the  citizens  of  a  muni- 
cipality whose  votes  authorized  the  contract  and  whose  taxes  dis- 
charge the  financial  burdens  the  contract  entails.  The  officials  who 
execute  the  contract  are  technically  the  agents  of  the  corporation, 
but  the  corporation  itself  is  the  agent  of  the  people,  who  are  thus 
effectively  the  principals  of  the  contract.  The  acceptance  of  the 
contract  by  the  water  company  carries  with  it  the  duty  of  supply- 
ing all  persons  along  its  mains.  Griffin  v.  Water  Co.,  122  N.  C, 
206;  Hangen  v.  Water  Co.,  14  L.  R.  A.,  424. 

In  Paducah  Lumber  Co.  v.  Paducah  Water  Supply  Co.,  89  Ky., 
340   (1889),  it  is  held:     "If  a  water  company  enter  into  a  con- 
tract with  a  municipal  corporation  whereby  the  former  agrees,  in 
consideration  of  the  grant  of  a  franchise  and  a  promise  to  pay  cer- 
tain specified  prices   for  the  use  of   hydrants  to  construct  water- 
works of  a  specified  character,  force  and  capacity,  and  to  keep  a 
supply  of  water  required  for  domestic,  manufacturing  and  fire  pro- 
tection purposes  for  all  the  inhabitants  and  property  of  the  city,  a 
taxpayer  of   the   city   may   recover   of   the   water  company   when, 
through  a  breach  of  its  contract,  he  is  left  without  means  of  ex- 
tinguishing fire  and  his  property  is  on  that  account  destroyed,"  and 
it  is  therein  further  held:     "Where  a  party  undertakes  to  furnish 
water  in  such  mode  and  quantity  that  it  may  be  used  to  extinguish 
fires  in  the  city  in  which  it  is  to  be  supplied,  damages  sustained  by 
the  destruction  of  buildings  by  the  failure  to  so  furnish  such  water 
is  a  natural  and  proximate  consequence  of  such  breach  of  the  un- 
dertaking."     This    opinion    is    based    upon    sound    reason    and    is 
adopted  by  us.     It  is  conclusive  of  both  points  raised  as  to  the 
merits  of  the  controversy  by  the  demurrer.     Indeed,  it  could  not 
be  doubted  that  if  the  city  buildings  were  destroyed  by  fire  through 
failure  of  the  defendant  to  furnish  water  for  their  protection  as 
provided  by  the  contract,  the  city  could  recover.     New  Orleans  v. 
Waterworks,  72  Fed.  Rep.,  227.     Besides,  the  complaint,  in  para- 


470  EFFECT    OF    CONTRACT. 

graphs  13  and  14,  alleges  that  the  defendant's  failure  to  furnish 
water  as  per  contract  was  the  direct  and  sole  cause  of  the  loss, 
and  this  is  admitted  by  the  demurrer.  Thus,  the  question  really 
narrows  down  to  the  question  whether  the  beneficiaries  of  a  con- 
tract, who  furnish  the  consideration  money  of  the  contract,  can 
maintain  an  action  for  damages  caused  by  its  breach. 

The  case  of  Paducah  v.  Water  Co.  is  exactly  in  point,  was  reaf- 
firmed on  a  hearing,  and  is  followed  by  Duncan  v.  Water  Co.,  in 
the  same  volume,  making  three  decisions  all  together.  The  deci- 
sions, however  (twelve  in  number),  in  other  States  where  the  ques- 
tion has  been  presented,  are  the  other  way.  But  this  is  a  case  of 
the  first  impression  in  this  State,  and  decisions  in  other  States 
have  only  persuasive  authority.  They  have  only  the  consideration 
to  which  the  reasoning  therein  is  entitled.  They  are  to  be  weighed, 
not  counted.  We  should  adopt  that  line  which  is  most  consonant 
with  justice  and  the  "reason  of  the  thing." 

Did  the  people  of  Greensboro  have  just  cause  to  believe  that  by 
virtue  of  that  contract,  they  as  well  as  the  corporation  were  guar- 
anteed a  sufficient  quantity  of  water  to  protect  their  property  from 
fire,  and  did  the  water  company  understand  it  was  agreeing,  for 
the  valuable  considerations  named,  to  furnish  a  sufficient  quantity 
of  water  to  protect  private  as  well  as  public  property  from  fire? 
The  intent  is  to  be  drawn  from  the  instrument  itself,  and  on  its 
face  there  can  be  no  doubt  it  was  contracted  that  the  water  supply 
should  be  sufficient  to  protect  private  as  well  as  public  property. 
If  so,  it  follows  that  when  by  breach  of  that  contract  private  prop- 
erty is  destroyed,  the  owner  thereof,  one  of  the  beneficiaries  con- 
templated by  the  contract,  is  the  party  in  interest,  and  he  and  he 
alone  can  maintain  an  action  for  his  loss. 

As  said  by  Judge  Freeman,  the  learned  annotator  of  the  Amer- 
ican State  Reports,  in  commenting  on  the  fact  (29  Am.  St.  Rep., 
at  page  863),  that  the  majority  of  decisions  so  far  rendered  were 
adverse  to  the  position  taken  in  the  Kentucky  case  above  cited  and 
approved  by  us:  "As  none  of  the  courts  have  fairly  faced  what 
seems  to  be  the  logical  results  of  these  decisions,  viz.,  that  the  in- 
jured person  is  left  without  any  remedy  at  all,  it  must  be  admitted 
that  the  subject  is  left  in  an  extremely  unsatisfactory  position. 
It  seems  to  be  universally  agreed,  and  on  the  soundest  reasoning, 
that  the  city  itself  is  not  liable  for  failing  to  protect  the  property 
of  taxpayers  from  fire,  unless  made  liable  by  express  statutory 
provisions.  Wright  v.  Augusta,  78  Ga.,  241  (6  Am.  St.  Rep.,  256). 
And  it  seems  equally  clear  that  the  city  would  have  n^  right  of 
action  in  such  case  in  behalf  of  the  taxpayer,  for  the  basis  of  all 
the  [adverse]  decisions  is  that  there  is  no  privity  of  contract  be- 
tween the  taxpayer  and  the  water  companies.     If  the  contract  is 


UPON    PERSONS    NOT    PARTIES.  471 

not  made  for  the  benefit  of  the  taxpayers  in  such  a  sense  that  they 
can  sue  upon  it,  it  can  hardly  be  maintained  that  the  same  contract 
is  made  for  one  of  those  taxpayers  in  such  a  sense  that  the  city 
can  recover  damages  in  his  name.     If,  then,  neither  the  taxpayer 
himself  nor  the  city  on  his  behalf  can  sue  the  company,  the  con- 
clusion seems  to  be  that  the  loss  by  fire  in  these  cases  is  regarded 
by  the  law  as  damage  for  which  there  is  no  redress."     This  is  a 
complete  rcductio  ad  absurdum  and  we  prefer  not  to  concur  in 
cases,   however   numerous — there   are   probably   a   dozen   scattered 
through  half  a  dozen  States — which  lead  to  such  conclusion.     All 
these  cases  (when  not  based  on  reference  to  the  others)  rest  upon 
the  narrow  technical  basis  that  a  citizen,  because  not  a  privy  to  the 
contract,  can  not  sue,  whereas  authorities  are  numerous  that  a  ben- 
eficiary of  a  contract,  though  not  a  party  or  privy,  may  maintain 
an  action  for  its  breach.     7  Am.  &  Eng.  Enc.   (2  Ed.),  105—108. 
Here  the  water  company  contracted  with  the  city  to  furnish  cer- 
tain quantities  of  water  for  the  protection  of  the  property  of  the 
citizens  as  well  as  of  the  city,  and  received  full  consideration,  a 
large  part  of  which  comes  in  the  shape  of  taxation,  paid  annually 
by  those  citizens.     On  a  breach  of  the  contract,  whereby  the  prop- 
erty of  a  citizen  is  destroyed,  he,  as  a  beneficiary  of  the  contract, 
is  entitled  to  sue,  and  under  our  Code  requiring  the  party  in  inter- 
est to  be  plaintiff,  he  is  the  only  one  who  can. 

Whether  there  was  a  breach  of  the  contract  and  whether  it  was 
the  proximate  cause  of  the  loss,  regarded  as  matters  of  fact  will 
be  determined  by  the  jury,  if,  when  the  case  goes  back,  the  de- 
fendant shall  file  an  answer  as  it  has  a  right  to  do   (The  Code, 
section  272),  raising  those  issues.     But  in  overruling  the  demurrer 
to  the  complaint  there  was  no  error.     As  was  said  by  the  Supreme 
Court  of  Kentucky,   when  affirming,  on  a  petition  to  rehear,   the 
decision  in  the  Paducah  case,  supra;    "The  water  company  did  not 
covenant  to  prevent  occurrence  of  fires,  nor  that  the  quantity  of 
water  agreed  to  be  furnished  would  be  a  certain  and  effectual  pro- 
tection against  every  fire,  and  consequently  does  not  in  any  sense 
occupy  the  attitude  of  an  insurer;  but  it  did  undertake  to  perform 
the  plain   and   simple  duty  of  keeping  water  up  to   a   designated 
height  in  the  standpipe,  and  if  it  failed  or  refused  to  comply  with 
that  undertaking,  and  such  breach  was  the  proximate  cause  of  de- 
struction of  the  plaintiff's  property,  which  involves  issues  of  fact 
for  determination  by  a  jury,  there  exists  no  reason  for  its  escape 
from  answering  in  damages  that  would  not  equally  avail  in  case  of 
any  other  breach  of  contract."  Affirmed. 


472  EFFECT    OF    CONTRACT. 


(186)   SHOAF  v.  INSURANCE  CO., 

127  N.  C,  308,  37  S.  K,  451,  80  A.  S.  R.,  804-1900. 

Civil  action  on  a  contract  of  reinsurance.     There  was  a  judg- 
ment for  the  plaintiff,  and  defendant  appealed. 

Faircloth,  C.  J.  Prior  to  October,  1898,  the  Merchants'  and 
Manufacturers'  Fire  Insurance  Company,  of  Baltimore  City,  in  the 
State  of  Maryland,  issued  its  policies  of  insurance  on  the  prop- 
erty of  the  plaintiffs  in  the  town  of  Salem,  N.  C,  with  the  usual 
stipulations  and  conditions,  and  received  the  premiums  therefor 
from  the  plaintiffs.  During  the  life  of  said  policies,  to  wit,  on 
October  4,  1898,  the  said  Merchants'  Company  and  the  Palatine 
Fire  Insurance  Company,  of  Manchester,  England,  doing  business 
in  this  State,  entered  into  a  written  contract  of  reinsurance,  in 
which  the  Palatine  Company  agreed  to  reinsure  all  outstanding 
risks  of  the  Merchants'  Company  for  loss  or  damage  by  fire,  etc., 
on  any  property  located  in  the  United  States  and  Canada,  and  as- 
sumed all  liability  under  any  outstanding  policies  or  risks  thereto- 
fore written  by  said  Merchants'  Company,  and  on  any  policy  or 
risk  that  might  be  written  by  the  Merchants'  Company  before  No- 
vember 1,  1898,  the  later  business  to  be  for  the  benefit  of,  and 
under  the  direction  of,  the  Palatine  Company,  which  company  as- 
sumed all  expenses  and  taxes  connected  therewith,  and  all  said 
risks  and  policies  are  reinsured  by  the  Palatine  Company.  In  con- 
sideration of  such  reinsurance,  the  Merchants'  Company  agreed  to 
pay  one-half  of  the  unearned  gross  pro  rata  premiums  on  all  poli- 
cies in  force  on  October  1,  1898,  to  furnish  complete  schedules  of 
all  policies,  to  retire  from  business  and  to  transfer  and  deliver  its 
good  will,  right,  title,  and  interest  in  its  business,  daily  reports, 
endorsements,  registers,  and  books  of  record  to  the  Palatine  Com- 
pany, except  office  fixtures,  furniture,  etc.,  with  a  provision  of  re- 
lease on  failure  to  perform  the  obligations  of  said  contract.  The 
tenth  article  of  said  reinsurance  contract  provides  that  it  shall  only 
be  effective  as  between  the  parties  thereto ;  that  no  holder  of  a 
policy  in  the  Merchants'  Company  shall  be  entitled  to  enforce  this 
contract  against  the  Palatine  Company ;  that  the  holders  of  such 
policies  shall  prosecute  against  the  Merchants'  Company  any  claim 
arising  under  said  policies  ;  and  the  Palatine  Company  "agrees  to 
pay  all  such  claims  legally  arising  and  duly  proved ;  and  further, 
in  case  of  any  contest  arising  in  connection  with,  or  suit  being 
brought  for,  or  on,  any  such  claim,  said  Palatine  Company  agrees 
to  defend  the  same,  and  pay  all  costs  and  expenses  incident  there- 
to." This  agreement  was  signed  by  the  two  companies,  and  the 
plaintiffs  were  not  parties  thereto.     Subsequently  the  insured  prop- 


UPON    PERSONS    NOT    PARTIES.  473 

erty  was  destroyed  by  fire,  and  the  plaintiffs,  having  performed  the 
conditions  of  their  policy,  instituted  this  action  against  the  Pala- 
tine Company  alone. 

The  question  is,   can  the  plaintiffs,  upon  these   facts,  maintain 
their  action?     This   question  has  not  until  now  been  before  this 
court.     There  is  some  diversity  of  opinion  in  the  decisions  of  the 
courts  in  our  sister  States  and  the  general  authorities.     There  is 
no  question  raised  as  to  the  validity  of  the  insuring  and  reinsuring 
contracts,   each  being  in   due   form,  and  supported  by  a  valuable 
consideration.     A  policy  of  fire  insurance  is  a  contract  of  indem- 
nity  (Darrell  v.  Tibbitts,  5  Q.  B.  Div.,  560)  ;  and  such  contract 
gives  the  insurer  an  insurable  interest  in  the  property  insured,  co- 
extensive with  its  liability    (New  York  Bowery  Fire  Ins.  Co.  v. 
New  York  Fire  Ins.  Co.,   17  Wend.,  359).     A  contract  of  rein- 
surance seems  to  be  a  union  and  blending  of  the  business  of  the 
two  companies,  presumably  for  the  advantage  of  each  party.     The 
reinsurer   absorbed   the   estate   and   rights   of   the   reinsured,   and 
assumed  the  risks  and  liabilities  of  the  reinsured,  with  the  privi- 
lege of  the  reinsured,  in  the  present  case,  to  continue  issuing  new 
policies   for  a  time  specified,   with  the  same  rights  and  liabilities 
under  the  new  policies  as  under  those  already  outstanding;  this 
to  be  done  for  the  benefit  of,  and  under  the  direction  of,  the  de- 
fendant.    The  plaintiffs   were  neither   a   party   to,   nor   in   privity 
with,  said  contracts.     The  question  is,  have  they  an  interest  in,  or 
arising  out  of,  the  contract?     The  defendant  is  bound  to  indem- 
nify the  reinsured  for  all  risks  and  loss,  and  the  reinsured,  at  the 
same  time,  is  bound  to  indemnify  the  plaintiffs  for  risk  and  loss. 
Does  the  defendant's  liability  inure  to  the  benefit  of  the  plaintiffs, 
and,  if  so,  can  the  plaintiffs  directly  enforce  their  claim   for  loss 
against  the  defendant?    The  unearned  premium  at  the  date  of  the 
contract  was  a  part  of  the  consideration  passing  to  the  defendant 
for  its  risk  and  liability  assumed.     In  this  unearned  premium  the 
plaintiffs  had  an  interest  at  the  time  of  the  reinsurance. 

The  principle  sanctioned  by  several  respectable  authorities  is 
this :  If  A,  on  receipt  of  a  good  and  sufficient  consideration,  agrees 
with  B  to  assume  and  pay  a  debt  of  the  latter  to  C,  then  C  may 
maintain  an  action  directly  on  such  contract  against  A,  although 
C  is  not  privy  to  the  consideration  received  by  A.  The  case  be- 
fore us  seems  to  come  within  the  same  principle.  Our  Code  (sec- 
tion 177)  provides  that  every  action  must  be  prosecuted  in  the 
name  of  the  real  party  in  interest,  etc.  In  all  the  cases  close  at- 
tention is  given  to  the  language  of  the  agreement.  In  the  present 
case  the  defendant  expressly  assumes  the  liability  in  case  of  loss, 
but  agrees  to  pay  to  the  Merchants'  Company  only  after  claims 
have  been  duly  proved  in  an  action  against  the  Merchants'  Com- 


474  EFFECT    OF    CONTRACT. 

pany.  The  defendant  also  agrees,  in  the  event  of  such  litigation, 
"to  defend  the  same,  and  pay  all  costs  and  expenses  incident 
thereto."  We  see  no  reason  why  the  plaintiffs  should  be  required 
to  first  sue  the  Merchants'  Company,  and  then,  in  case  of  that 
company's  insolvency,  have  to  sue  the  defendant  on  its  contract. 
The  defendant  has  all  the  means  and  information  necessary  to 
make  a  just  defense. 

We  can  see  no  reason  why  the  plaintiffs  may  not  do  directly  that 
which  it  must  be  admitted  they  can  do  indirectly,  nor  do  we  see 
how  the  defendant  is  prejudiced  thereby.  The  defendant  sug- 
gests no  such  danger,  but  relies  solely  on  the  ground  that  it  has  no 
contract  with  the  plaintiffs.  Johannes  v.  Ins.  Co.,  66  Wis.,  50,  is 
decisive  on  this  question.  It  does  not  appear  clearly,  either  from 
the  statement,  or  the  opinion,  whether  the  promise  was  to  pay  the 
loss  to  the  insured,  or  the  reinsured,  but  the  reasoning  in  the  opin- 
ion does  not  consider  that  material.  It  is  the  implied  right,  aris- 
ing out  of  the  express  agreement  of  the  defendant,  that  enables 
the  plaintiffs  to  maintain  the  action.  The  defendant  relies  on  the 
provision  in  Art.  X,  of  its  contract  as  a  protection  against  any  ac- 
tion of  the  plaintiffs  against  that  company.  If  the  plaintiffs  have 
a  right  to  sue  the  defendant,  as  we  think  they  have,  the  two  com- 
panies can  not,  by  any  agreement  between  themselves,  to  which 
plaintiffs  are  not  a  party,  defeat  that  right.  The  defendant  says, 
in  its  brief  and  oral  argument,  that  "the  first  and  leading  ques- 
tion in  the  case  relates  to  the  right  of  the  plaintiffs  to  sue  the  de- 
fendant upon  the  policies,  and  to  the  liability  of  the  latter,  even  if 
a  good  cause  of  action  upon  the  policies  has  accrued  to  the  plain- 
tiffs." That  is  the  crucial  point  in  the  case,  and  that  we  have 
considered.  Our  conclusion  on  that  point,  already  stated,  renders 
further  investigation  unnecessary.  Affirmed. 

For  other  cases  on  the  right  of  the  beneficiary  to  sue,  see  Anders  v.  Gard- 
ner, 151—604;  Withers  v.  Poe,  167—372  (overruling  Morehead  v.  Wriston, 
73—398)  ;  following  Gorrell  v.  Water  Co.,  supra,  see  Morton  v.  Washington 
Light  &  Power  Co.,  —  N.  C,  — ,  84  S.  E.,  1019,  where  all  the  cases  are 
given,  and  the  decision  seems  to  turn  upon  whether  the  contract  in  question 
was  made  before  the  decision  in  the  Gorrell  case. 

For  list  of  cases  on  the  beneficiary  theory  in  this  State,  see  Wood  v.  Kin- 
caid,  144,  p.  395.  Gastonia  v.  Engineering  Co.,  131 — 363;  Lacy  v.  Webb,  130 — 
545 :  Voorhees  v.  Proctor,  134—591,  sustain  the  cases  of  Gorrell  v.  Water  Co., 
and  Shoaf  v.  Ins.  Co.,  and  distinguish  the  cases  in  73 — 398,  98 — 324,  and 
118—822.  Jones  v.  Water  Co.,  135—553,  is  like  124—328,  and  cites  128—375, 
109—327,  116 — 658.  For  cases  in  accord  with  Gorrell  v.  Water  Co.,  see  52 
L.  R.  A.,  305;  61  L.  R.  A.,  509;  63  L.  R.  A.,  727.  Contra,  15  L.  R.  A.,  375; 
21  L.  R.  A.,  653;  23  L.  R.  A.,  146;  25  L.  R.  A.,  257,  verv  full  note;  28  L.  R. 
A.,  532;  Hone  v.  Presque  Tsle  Water  Co.,  104  Me.,  217,  71  Atl.,  769,  21  L.  R. 
A.  (N.  S.),  1021;  German  Al.  Ins.  Co.  v.  Home  Water  Supply  Co.,  226  U.  S., 
220,  42  L.  R.  A.  (N.  S.),  1000.  As  to  indemnity  contracts,  see  51  L.  R.  A., 
241,  653;  53  L.  R.  A.,  390,  609;  Clark  v.  Bonsall,  157—270,  48  L.  R.  A.  (N. 
S.L  191:  Supply  Co.  v.  Lumber  Co.,  160—428,  42  L.  R.  A.  (N.  S.),  707. 

For  general  discussion  of  right  of  third  person  to  sue,  see  7  Am.  &  Eng. 


UPON    PERSONS    NOT    PARTIES.  475 

Encyc,  pp.  104-110;  Clark  Cont.,  352-357;  3  Page  Cont.,  sees.  1307,  1322;  9 
Cyc,  374;  Pollock  Cont,  237;  6  R.  C.  L.,  882;  Baxter  v.  Camp,  71  Conn., 
245,  71  A.  S.  R.,  169;  15  Harv.  L.  Rev.,  767;  16  lb.,  43. 

Where  the  right  of  the  third  party  has  been  recognized,  it  seems  that  there 
must  be  some  obligation  existing  between  the  promisee  and  the  third  person, 
as  in  the  leading  case  of  Lawrence  v.  Fox,  20  N.  Y.,  368. 

It  is  sometimes  held  that  this  rule  does  not  apply  to  contracts  under  seal, 
because  the  basis  of  the  action  is  the  implied  contract.  3  Page  Cont.,  sec. 
1321;  Clark  Cont.,  358;  6  R.  C.  L.,  885. 

2.  Action  by  the  real  party  in  interest. 

(187)  YOUNG  v.  TELEGRAPH  CO., 

107  N.  C,  370,  11  S.  E.,  1044,  9  L.  R.  A.,  669,  22  A.  S.  R.,  883-1890. 

Civil  action  for  damages,  for  failure  to  deliver  promptly  the 
following  telegram :  To  J.  T.  Young,  New  Bern,  N.  C. — Come  in 
haste.  Your  wife  is  at  the  point  of  death.  (Signed)  J.  W.  Rice. 
A  demurrer  by  the  defendant  was  overruled,  and  the  defendant 
appealed. 

Clark,  J.  In  addition  to  the  ground  of  demurrer  set  out  in  the 
record,  the  defendant  demurred  ore  terms  in  this  court,  that  the 
complaint  did  not  state  a  sufficient  cause  of  action,  in  that  the 
plaintiff  was  not  a  party  to  the  contract,  and,  therefore,  could  not 
maintain  an  action  for  its  breach. 

Upon  the  question  whether  the  receiver  can  maintain  the  action, 
Shearman  &  Redfield  on  Negligence,  sec.  560,  says:     "We  think, 
therefore,  upon  the  principle  of  these  decisions,  a  telegraph  com- 
pany is  responsible  for  its  negligence  to  a  person  to  whom  a  mes- 
sage is  addressed,  as  well  as  to  the  sender.     If  it  were  not  so,  it 
is  obvious  that  the  receivers  of  telegrams  would  often  receive  great 
damage  without  any  means  of  redress."     There  is  ample  authority 
to  the  same  effect.     Wadsworth  v.  Western  Union  Telegraph  Co., 
86  Tenn.,  695;  Elwood  v.  Telegraph  Co.,  45  N.  Y.f  549;  Ellis  v. 
Telegraph  Co.,   13  Allen,  227;  N.  Y.  P.  Co.  v.  Dryburg,  85  Pa. 
St.,  298;  Aiken  v.   Telegraph   Co.,   19   Mo.   App.,  80,  and   many 
others.     This,   while   not  the   English   rule,   is   stated  by  Bray  on 
Telegraphs,  sec.  65  ;  2  Thomp.  Neg.,  847 ;  5  Lawson's  Rights  and 
Rem.,  sec.  1972,  and  Wharton  Neg.,  sec.  758,  to  be  the  invariable 
rule  in  this  country.     The   following  may  be  summed  up  as  the 
reasons  therefor:    (1)  That  a  telegraph  company  is  a  public  agency, 
and  responsible,  as  such,  to  anyone  injured  by  its  negligence,  or, 
at  least,  it  is  the  common  agent  of  the  sender  and  receiver,  and  re- 
sponsible to  each   for  any  injury  sustained  by  them,   respectively, 
by  its  negligence;   (2)   that  in  a  case  like  this,  the  receiver  is  the 
beneficiary  of  the  contract,  and  the  injury,  if  any,  caused  by  the 
company's   negligence,   must   be  to   him;    (3)    the   message   is   the 
property  of   the  party   addressed,   in   analogy  to   a   consignee  of 


476  EFFECT    OF    CONTRACT. 

goods;  (4)  that  upon  the  face  of  the  message,  such  as  this,  the 
sender  is  the  agent  of  the  receiver,  and  the  latter,  as  the  principal, 
can  maintain  an  action  for  breach  of  the  contract,  or  for  a  tort,  if 
injury  is  done  him  by  negligence  in  performance  of  the  duty  con- 
tracted for.  "The  company's  employment  is  of  a  public  character, 
and  it  owes  the  duty  of  care  and  good  faith  to  both  sender  and  re- 
ceiver." 3  Sutherland  Dam.,  314.  This  author  goes  on  to  state 
that  where  there  is  gross  or  wilful  negligence,  the  action  can  be 
brought  either  for  tort  or  on  contract,  and,  in  case  of  misfeasance, 
the  company  is  liable  also  to  third  parties  as  wrongdoers. 

Upon  authority  and  reason,  we  think  it  clear  that  the  plaintiff 
could  maintain  the  action,  whether  it  is  an  action  ex  contractu  for 
breach  of  the  contract  of  speedy  and  safe  transmissions,  or  ex  de- 
licto for  negligence  and  violation  of  the  duty  which  the  defendant 
owed  as  a  public  corporation,  or  as  common  agent  of  sender  and 
receiver,  at  least  nominal  damages  could  be  recovered. 

[The  opinion  then  discusses  the  question  of  damages  for  mental 
anguish,  and  decides  that  the  plaintiff  may  recover  for  such  cause.] 

There  are  numerous  cases  to  the  same  effect,  all  of  which  are  given  in  the 
dissenting  opinion  of  Clark,  C.  J.,  in  Helms  v.  Tel.  Co.,  143,  p.  394.  This 
case  holds  that  the  name  of  the  plaintiff  must  appear  in  the  message,  or  his 
interest  be  known  to  the  company.  But  Cashion's  case,  124 — 459,  holds  that 
where  the  message  relates  to  sickness  or  death  it  is  not  necessary  to  disclose 
the  relation  of  the  parties.  Holler  v.  Tel.  Co.,  149 — 336;  Penn.  v.  Tel.  Co., 
159—306;  Betts  v.  Tel.  Co.,  167—75. 

Under  the  Code  practice,  every  action  must  be  prosecuted  in  the  name  of 
the  real  party  in  interest.  Revisal,  400 ;  Clark's  Code,  sec.  177 ;  Chapman  v. 
McLawhorn,  150—166;  Martin  v.  Mask,  158—436. 

If  goods  are  delivered  to  the  carrier  by  the  consignor  to  be  transported  to 
the  consignee,  nothing  else  appearing,  the  title  is  presumed  to  be  in  the  con- 
signee, and  he  must  sue.  Gwynn  v.  R.  R.,  85 — 429;  Grocery  Co.  v.  R.  R., 
136—396;  Summers  v.  R.  R.,  138—295;  Stone  v.  R.  R.,  144—220;  Manfg.  Co. 
v.  R.  R.,  149—261;  Gaskins  v.  R.  R.,  151—18;  Buggy  Co.  v.  R.  R.,  152—119; 
but  it  is  also  held  that  the  consignor  may  sue,  since  he  is  the  party  with 
whom  the  contract  is  made.  6  Cyc,  511,  512.  Where  an  administrator  paid 
money  to  a  distributee,  upon  a  promise  to  refund  if  any  claims  arose,  the 
rights  of  other  claimants  can  be  enforced  only  through  the  administrator. 
Norwood  v.  O'Neal,  112—127.  Bonds  payable  to  the  State  must  be  prosecuted 
in  the  name  of  the  State  on  the  relation  of  every  party  interested.  Comrs. 
v.  Sutton,  120—298;  Lacy  v.  Webb,  130—545.  A  trustee  may  sue  without 
joining  the  cestui  que  trust.  Clark's  Code,  sec.  179.  A  reservation  in  a  deed 
can  not  lie  made  so  as  to  convey  title  to  a  stranger,  but  it  may  give  the 
grantee  notice  of  an  adverse  claim.     Redding  v.  Vort,  140 — p.  571. 

Where  the  parties  are  numerous,  and  the  question  is  one  of  common  or 
general  interest  of  many  persons,  one  or  more  may  sue  for  the  benefit  of 
all.  (lark's  Code,  sec.  185;  Branson  v.  Ins.  Co.,  85 — 414;  Thames  v.  Jones, 
97—121;  Jones  v.  Comrs.,  107—248;  Nash  v.  Sutton,  109—550,  117—231;  Tate 
v.  Bates,  118—288. 


ASSIGNMENT    OF    CONTRACT. 


477 


CHAPTER  II. 
Assignment  of  Contract. 

Sec.  1.  By  act  of  the  parties. 

1.  Assignment  of  liabilities. 

(188)  WOODLEY  v.  BOND, 

66  N.  C,  396—1872. 

Civil  action  on  contract.  The  plaintiff  was  hired  by  the  de- 
fendant's testator  as  overseer  on  his  farm  for  a  year  at  $625. 
During  the  year  the  said  testator  sold  the  farm  to  one  Holley, 
with  the  understanding  that  the  sale  was  not  to  affect  the  contract 
of  hiring,  and  that  the  plaintiff  was  to  stay  on  the  farm  for  Holley 
on  the  same  terms.  The  plaintiff  was  not  a  party  to  this  agree- 
ment, and  when  notified  of  it  by  Holley,  refused  to  comply,  but 
went  to  the  testator  and  demanded  the  full  amount  for  the  year's 
work ;  the  testator  refused  to  pay  and  plaintiff  left  the  farm.  The 
court  charged  the  jury  that  upon  the  sale  the  plaintiff  had  a  right 
to  put  an  end  to  the  contract,  and  was  entitled  to  recover  for  the 
time  served  the  proportional  part  of  the  sum  agreed  on  for  the 
year.  There  was  a  judgment  for  the  plaintiff,  and  defendant  ap- 
pealed. 

Dick,  J.  .  .  .  The  agreement  between  the  plaintiff  and  tes- 
tator was  a  personal  contract,  and  its  benefits  and  obligations  did 
not  in  any  respect  pass  with  the  land  to  Holley.  Various  consid- 
erations, besides  the  wages  agreed  upon,  may  have  induced  the 
plaintiff  not  to  enter  into  the  contract.  It  may  be  that  he  would 
not  have  served  Holley  at  any  price.  The  contract  consisted  of 
mutual  engagements  between  the  parties,  which  established  the  re- 
lation of  employer  and  overseer,  and  as  this  relation  was  ended  by 
the  action  of  the  testator,  the  plaintiff  was  at  liberty  to  regard  the 
contract  as  rescinded,  leave  the  farm,  and  bring  suit  upon  a  quan- 
tum meruit  for  services  rendered  at  the  instance  and  request  of 
testator.  2  Parsons  Cont.,  32,  523,  678;  Robson  v.  Drummond,  2 
B.  &  Ad.,  303 ;  Planche  v.  Colburn,  8  Bing.,  14 ;  2  Smith  L.  C, 
18,  19  (notes  in  Cutter  v.  Powell). 

The  principles  involved  in  this  case  are  so  well  founded  in  nat- 
ural justice,  thaf  they  need  no  further  discussion  or  citation  of 
authority.     There  is  no  error. 

Per  Curiam.  Judgment  affirmed. 


478  EFFECT    OF    CONTRACT. 


(189)  RAILROAD  v.  RAILROAD, 

147  N.  C,  368,  61   S.  E.,  189,  23  L.  R.  A.   (N.  S.),  223,   125  A.  S.  R„  550, 

15  Ann.  Cas.,  223—1908. 

The  plaintiff  Railroad  Co.  executed  a  lease  to  the  Howland  Im- 
provement Co.  for  its  entire  road,  including  among  other  things 
therein  mentioned  "all  lands  and  interests  in  land,  timber,  timber 
rights  and  contracts  now  owned  by  the  lessor,"  and  there  was  a 
covenant  of  indemnity  that  the  said  Improvement  Co.  should  save 
the  lessor  harmless  from  all  damage  that  might  arise  from  the 
failure  of  the  lessee  to  perform  all  obligations  so  transferred  and 
assumed.  The  defendant  Railroad  Co.  succeeded  to  the  rights  of 
the  Howland  Improvement  Co. 

Before  the  lease  was  executed  the  plaintiff  had  made  a  contract 
with  one  Ives  to  cut  and  deliver  15,000  cords  of  wood  to  be  used 
as  fuel  in  its  locomotives,  and  Ives  had  cut  a  large  quantity  and 
was  proceeding  with  his  contract  when  the  lease  was  made.  After 
the  defendant  company  took  charge  of  the  road,  it  determined  to 
change  the  locomotives  to  coal  burners,  and  refused  to  carry  out 
the  contract  which  the  plaintiff  had  made  with  Ives.  Ives  sued 
the  plaintiff  and  recovered  over  $8,000  damages  for  the  breach  of 
the  contract;  and  the  plaintiff  sued  the  defendant  to  recover  the 
amount  so  paid  to  Ives.  There  was  judgment  for  the  plaintiff, 
and  defendant  appealed.  Affirmed. 

Hoke,  J.  .  .  .  Recovery  is  resisted  on  the  grounds  chiefly 
(1)  that  the  contract  in  question  was  not  assignable;  (2)  that  as 
a  matter  of  fact  it  was  not  assigned.  But  we  are  of  opinion  that 
neither  position  can  be  sustained. 

While  at  common  law  the  rights  and  benefits  of  a  contract,  ex- 
cept in  the  case  of  the  law  merchant  and  in  cases  where  the  crown 
had  an  interest,  could  not  be  transferred  by  assignment,  a  doctrine 
which  Lord  Coke  attributes  to  the  "wisdom  and  policy  of  the 
founders  of  our  law  in  discouraging  maintenance  and  litigation, 
but  which  Sir  Frederick  Pollock  tells  us  is  better  explained  as  a 
logical  consequence  of  the  archaic  view  of  a  contract  as  creating  a 
strictly  personal  obligation  between  the  debtor  and  creditor,"  the 
rule  in  its  strictness  was  soon  modified  in  practical  application  by 
the  common  law  courts  themselves  and  more  extensively  by  the 
decisions  of  the  courts  of  equity ;  and  the  principles  established  by 
these  cases  have  been  sanctioned  and  extended  by  legislation  until 
now  it  may  be  stated  as  a  general  rule  that,  unless  expressly  pro- 
hibited by  statute  or  in  contravention  of  some  principle  of  public 
policy,  all  ordinary  business  contracts  are  assignable,  and  that  ac- 


ASSIGNMENT    OF    CONTRACT.  479 

tions  for  breach  of  same  can  be  maintained  by  the  assignee  in  his 
own  name. 

The  general  doctrine  as  to  the  assignability  of   rights  is  very 
well  stated  in  Pomeroy's  Equity  Jurisprudence,  vol.  3,  sec.   1275, 
as  follows:     "What  things  in  action  are  or  are  not  assignable. — 
It  becomes  important,  then,  in  fixing  the  scope  of  the  equity  juris- 
diction, to  determine  what  things  in  action  may  thus  be  legally  as- 
signed.   The  following  criterion  is  universally  adopted :    All  things 
in  action  which  survive  and  pass  to  the  personal  representatives  of 
a  decedent  creditor,  or  continue  as  liabilities  against  the  represen- 
tatives   of    a    decedent    debtor,    are    in    general    thus    assignable; 
all   which   do   not  thus   survive,   but   which   die   with   the   person 
of  the  creditor  or  debtor,  are  not  assignable.     The  first  of  these 
classes,  according  to  the  doctrine  prevailing  throughout  the  United 
States,  includes  all  claims  arising  from  contract,  express  or  im- 
plied, with  certain  well-defined  exceptions;  and  those  arising  from 
torts   to   real   or  personal  property  and   from   frauds,   deceits  and 
other   wrongs    whereby    an    estate,    real    or    personal,    is    injured, 
diminished  or  damaged.     The  second  class  embraces  all  torts  to 
the  person  or  character,  where  the  injury  and  damage  are  con- 
fined to  the  body  and  to  the   feelings;  and  also  those  contracts, 
often   implied,   the   breach   of   which   produces   only   direct   injury 
and  damage,  bodily  or  mental,  to  the  person,  such  as  promises  to 
marry,  injuries  done  by  the  want  of  skill  of  a  medical  practitioner 
contrary  to  his  implied  undertaking,  and  the  like;  and  also  those 
contracts,  so  long  as  they  are  executory,  which  stipulate  solely  for 
the  special  services,  skill  or  knowledge  of  a  contracting  party." 

And  an  interesting  and  well-considered  article  by  Prof.  Fred- 
erick C.  Woodard  on  the  assignability  of  contracts  will  be  found 
in  18  Harv.  Law  Rev.,  vol.  18,  No.  1,  p.  23.  There  is  an  excep- 
tion, as  indicated  in  the  last  part  of  this  citation  from  Pomeroy, 
to  the  effect  that  executory  contracts  for  personal  services  involv- 
ing a  personal  relation  or  confidence  between  the  parties  can  not 
be  assigned.  Lawson  on  Cont.,  sec.  355.  And  another,  equally 
well  established  and  well  nigh  as  broad  as  the  rule  itself,  is  that 
executory  contracts  imposing  liabilities  or  duties  which  in  express 
terms  or  by  fair  intendment  from  the  nature  of  the  liability  them- 
selves import  reliance  on  the  character,  skill,"  business  standing  or 
capacity  of  the  parties  can  not  be  assigned  by  one  without  the 
assent  of  the  other.  This  last  exception  and  the  reason  upon 
which  it  rests  are  stated  by  Justice  Gray,  delivering  the  opinion  in 
Delaware  v.  Diebold,  133  U.  S.,  488,  as  follows:  "A  contract  to 
pay  money  may  doubtless  be  assigned  by  the  person  to  whom  the 
money  is  payable,  if  there  is  nothing  in  the  terms  of  the  contract 
which  manifests  the  intention   of  the  parties  that  it  shall  not  be 


480  EFFECT    OF    CONTRACT. 

assignable.  But  when  rights  arising  out  of  contract  are  coupled 
with  obligations  to  be  performed  by  the  contractor  and  involve 
such  a  relation  of  personal  confidence  that  it  must  have  been  in- 
tended that  the  rights  should  be  exercised  and  the  obligations  per- 
formed by  him  alone,  the  contract,  including  both  his  right  and 
his  obligations,  can  not  be  assigned  without  the  consent  of  the 
other  party  to  the  original  contract,"  citing  the  case  of  Arkansas 
Co.  v.  Belden  Co.,  127  U.  S.,  379.  And  the  same  principle  is 
stated  in  Clark  on  Contracts,  364:  "It  may  be  said  generally  that 
anything  which  involves  a  right  of  property  is  assignable,  with  the 
exception  that  rights,  when  coupled  with  liabilities  under  an  ex- 
ecutory contract  for  personal  service  or  under  contracts  otherwise 
involving  personal  credit,  trust  or  confidence,  can  not  be  assigned." 

It  is  contended  that,  by  reason  of  those  exceptions  stated  in  the 
authorities  referred  to,  the  contract  before  us  was  not  assignable 
so  as  to  impose  liability  of  performance  on  the  defendant  lessee, 
but  we  think  the  position  is  not  well  taken.  In  the  first  place,  the 
exception  noted  arises  for  the  protection  of  the  other  party,  and 
if  such  party  assents,  as  he  did  in  this  instance,  the  restriction  no 
longer  exists.  But,  apart  from  this,  it  will  be  noted  that  the  ex- 
ception referred  to  does  not  arise  or  apply  when  the  contract  is 
entirely  objective  in  its  nature,  and  gives  clear  indication  that  the 
personality  of  the  other  contracting  party  was  in  no  way  consid- 
ered. Anson  on  Cont.,  p.  288;  Clark  on  Cont.,  p.  360.  And  this 
limitation  imposed  on  the  exception  itself  is  applied  and  extended 
in  numerous  and  well-considered  decisions  of  courts  of  the  highest 
authority.  Horner  v.  Wood,  23  N.  Y.,  350;  Devlin  v.  City,  63 
N.  Y.,  8;  New  York  v.  Railway  Co.,  113  N.  Y.,  311 ;  Lantern  Co. 
v.  Stiles,  135  N.  Y.,  209;  Citv  of  St.  Louis  v.  Clement,  42  Mo., 
69 ;  Galey  v.  Mellon,  172  Pa.'  St.,  443  ;  Tolhurst  v.  Cement  Co., 
H.  L.  App.  Cas.  (1893),  414;  Wagon  Co.  v.  Lea  &  Co.,  L.  R.  Q. 
B.  (vol.  5,  1879-1880),  149. 

In  Devlin  v.  City  of  New  York,  supra,  the  general  principle  we 
are  discussing  is  stated  and  applied  as  follows:  "1.  Where  an  ex- 
ecutory contract  is  not  necessarily  personal  in  its  character,  and 
can,  consistent  with  the  rights  and  interests  of  the  adverse  party, 
be  fairly  and  sufficiently  executed  as  well  by  an  assignee  as  by 
the  original  contractor,  and  where  the  latter  has  not  disqualified 
himself  from  a  performance  of  the  contract,  it  is  assignable.  2. 
The  assignment  by  the  contractor  with  a  municipal  corporation  for 
work  is  not  against  public  policy  so  long  as  the  corporation  retains 
the  personal  obligation  of  the  original  contractor  and  his  sureties  ; 
and  in  the  absence  of  anything  in  the  statute  which  authorized  the 
work  prohibiting  it,  such  assignment  is  valid.  It  does  not  termi- 
nate the  contract  or  authorize  the  corporation  to  repudiate  it.     3. 


ASSIGNMENT     ()F     CONTRACT.  481 

Accordingly  held  that  an  assignee  of  a  contract  for  street  clean- 
ing, made  between  the  corporation  of  the  city  of  New  York  and 
another  under  authority  of  the  act  entitled  'An  act  to  enable  the 
supervisors  of  the  county  of  New  York  to  raise  money  by  tax  for 
city  purposes  and  to  regulate  the  expenditure  thereof,'  etc.  (chap. 
509,  Laws  of  1860),  could  maintain  an  action  against  the  city  for 
money  due  thereon  and  for  damages  resulting  from  a  repudiation 
of  the  contract  and  an  interference  on  the  part  of  the  city  author- 
ities, preventing  a   further  performance." 

And  in  Wagon  Co.  v.  Lea,  supra.  Chief  Justice  Cockburn,  deliv- 
ering the  opinion,  discusses  the  principle  as  follows :     "We  entirely 
concur  in  the  principle  on  which  the  decision  in  Robson  v.  Drum- 
mond    (  1  )    rests,  namely,  that  where  a   person  contracts  with  an- 
other to  do  work  or  perform  service,  and  it  can  be  inferred  that 
the  person  employed  has  been  selected  with  reference  to  his  indi- 
vidual  skill,   competency   or  other   personal   qualification,   the   ina- 
bility or   unwillingness   of   the   party   so   employed  to   execute  the 
work  or  perform  the  service  is  a  sufficient  answer  to  any  demand 
by  a  stranger  to  the  original  contract  of  the  performance  of  it  by 
the  other  party,  and  entitles  the  latter  to  treat  the  contract  as  at 
an  end,  notwithstanding  that  the  person  tendered  to  take  the  place 
of  the  contracting  party  may  be  equally  well  qualified  to  do  the 
service.     Personal  performance  is  in  such  a  case  of  the  essence  of 
the   contract,    which   consequently   can   not    in    its   absence   be    en- 
forced against  an  unwilling  party.     But  this  principle  appears  to 
us  inapplicable   in  the  present   instance,   inasmuch   as   we  can   not 
suppose  that  in  stipulating  for  the  repair  of  these  wagons  by  the 
company — a  rough  description  of   work   which   ordinary   workmen 
conversant  with  the  business  would  be  perfectly  able  to  execute — 
the   defendants    attached   any   importance   to    whether   the    repairs 
were  done  by  the  company  or  by  anyone  with  whom  the  company 
might  enter  into  a  subsidiary  contract  to  do  the  work.     All  that 
the  hirers,  the  defendants,  cared   for  in  this  stipulation  was  that 
the  wagons  should  be  kept  in  repair;  it  was  indifferent  to  them 
by  whom  the  repairs  should  be  made.     Thus,  if  without  going  into 
liquidation  or  assigning  these  contracts  the  company  had  entered 
into  a  contract  with  any  competent  party  to  do  the  repairs,  and  so 
had  procured  them  to  be  done,  we  can  not  think  that  this  would 
have  been  a  departure  from  the  terms  of  the  contract  to  keep  the 
wagons  in  repair.     While  fully  acquiescing  in  the  general  principle 
just  referred  to,  we  must  take  care  not  to  push  it  beyond  reason- 
able limits.     And  we  can  not  but  think  that  in  applying  the  prin- 
ciple the  Court  of  Queen's  Bench,  in  Robson  v.  Drummond    (1), 
went  to  the  utmost  length  to  which  it  can  be  carried,  as  it  is  diffi- 
cult to  see  how  in  repairing  a  carriage  when  necessary  or  painting 


482  EFFECT    OF    CONTRACT. 

it  once  a  year  preference  would  be  given  to  one  coachmaker  over 
another.  Much  work  is  contracted  for  which  it  is  known  can  only 
be  executed  by  means  of  subcontracts ;  much  is  contracted  for  as 
to  which  it  is  indifferent  to  the  party  for  whom  it  is  to  be  done 
whether  it  is  done  by  the  immediate  party  to  the  contract  or  by 
someone  on  his  behalf.  In  all  these  cases  the  maxim,  Qui  facit 
per  alium  facit  per  se,  applies." 

It  will  be  noted  here  that,  while  the  case  of  Robson  v.  Drum- 
mond,  frequently  cited  in  support  of  the  position  that  contracts 
imposing  liabilities  can  not  be  assigned,  is  not  overruled,  there  is 
decided  intimation  that  it  has  gone  too  far  in  the  application  of 
this  principle,  and  there  is  doubt  if  the  case  of  Boston  Ice  Co.  v. 
Potter,  123  Mass.,  28,  is  not  subject  to  the  same  criticism.  Cer- 
tainly neither  one  of  these  cases  can,  it  seems  to  us,  be  supported, 
except  on  the  theory  that  there  were  terms  in  the  contract  import- 
ing reliance  on  the  personal  skill,  business  standing  or  methods  of 
the  other  contracting  party.  A  correct  application  of  the  principle 
established  by  these  cases  leads  to  the  conclusion  that  the  contract 
in  question  was  assignable.  It  was  an  ordinary  business  contract 
for  the  delivery  of  so  much  cordwood  on  the  lessee's  right  of 
way,  not  requiring  or  importing  any  special  reliance  on  Ives'  skill 
or  business  qualifications.  It  could  be.  performed  as  well  by  one 
man  as  another.  As  a  matter  of  fact,  there  is  testimony  to  the 
effect  that  it  was  to  be  done  in  this  instance  by  convicts  and  that 
quarters  had  already  been  constructed  for  their  protection  and 
accommodation  while  doing  the  work.  As  said  by  Justice  Walker 
in  the  opinion  of  Ives  v.  Railroad,  supra,  "It  was  a  contract  of 
employment  in  the  sense  that  it  was  to  be  performed  by  means  of 
personal  labor,  but  not  in  the  sense  that  it  was  expected  that  it 
should  be  performed  by  Ives."  Nor  did  the  credit  or  business 
responsibility  of  the  original  parties  affect  the  matter  one  way  or 
the  other ;  nor  that  of  Ives,  for  the  wood  was  not  to  be  paid  for 
until  it  was  delivered,  and  so  the  defendant  assignee  was  fully 
protected ;  nor  that  of  the  assignor,  for  unless  Ives  had  agreed  to 
accept  the  defendant's  responsibility  instead  and  place  of  the  as- 
signor, making  it  a  new  contract  by  way  of  novation,  the  assignor 
would,  notwithstanding  the  assignment,  still  remain  liable.  Crane 
v.  Kildorf,  91  111.,  567;  Martin  v.  Orndoff,  22  Iowa,  447.  And 
see  the  article  of  Prof.  Woodard,  supra,  wherein  it  is  shown  that 
the  assent  of  the  other  party  to  an  assignment  does  not  always 
necessarily  import  that  the  assignor  is  relieved  of  liability. 

This,  ordinarily,  is  all  the  books  mean  when  they  state  the  prop- 
osition in  general  terms  that  a  contract  imposing  liability  can  not 
be  assigned  ;  that  the  assignment  of  such  a  contract  does  not,  as 
a  rule,  relieve  the  assignor  from  responsibility.     It  may  be  well  to 


ASSIGNMENT    OF    CONTRACT.  483 

note  that  we  are  speaking  of  the  assignment  of  the  contract  and 
not  of  the  transfer  of  the  property  about  which  parties  may  have 
contracted.  In  the  last  case  it  is  a  generally  accepted  doctrine 
that,  in  the  absence  of  an  agreement,  express  or  implied,  a  party 
who  buys  property  from  a  vendee,  to  whom  the  owner  has  con- 
tracted to  sell  it,  does  not,  as  a  rule,  come  under  personal  obli- 
gation to  the  owner  to  pay  the  purchase  price.  Adams  v.  Wad- 
hams,  40  Bar.,  225 ;  Comstock  v.  Hitt,  37  111.,  542.  We  have  so 
held  in  effect  at  the  present  term  in  Bridgers  v.  Matthews. 

The  contract  in  question  here,  being  for  the  delivery  of  so  much 
cordwood  on  defendant's  right  of  way,  may  be  classed  with  a 
contract  of  sale  of  a  given  quantity  of  staple  goods  having  a 
known  market  value,  and,  under  the  principle  established  by  the 
authorities  referred  to,  we  hold  that  it  was  assignable,  so  as  to 
impose  on  defendant  the  obligation  to  pay  for  the  wood  when  de- 
livered according  to  its  terms.  And  we  are  also  of  the  opinion 
that  by  the  terms  of  the  lease  the  contract  was,  and  was  intended 
to  be,  assigned.  ...  If  we  are  correct  in  our  position  that  the 
contract  was  assignable  and  that  as  a  matter  of  fact  it  was  as- 
signed, then  we  are  of  opinion  that  plaintiff  has  the  undoubted 
right  to  recover  of  the  defendant  the  amount  of  the  judgment, 
together  with  the  costs  and  reasonable  attorney's  fees  incurred  in 
resisting  the  suit  instituted  by  Ives.     .     .     .  Affirmed. 

Younce  v.  Lumber  Co.,  148 — 34 :  Mueller  v.  Xorhwestern  Univ.,  195  111., 
236,  63  N.  E.,  110,  88  A.  S.  R.,  201 ;  Simmons  v.  Zimmerman,  144  Cal.,  256, 
1  Ann.  Cas.,  850;  Rappleve  v.  Racine  Seeder  Co.,  79  Iowa,  220,  44  N.  W., 
363,  7  L.  R.  A.,  139:  Sloan  v.  Williams.  138  111.,  43,  27  N.  E.,  531,  12  L.  R. 
A.,  496 ;  2  Am.  &  Eng.  Encyc,  1017 ;  4  Cyc,  22 ;  2  R.  C.  L.,  598. 

One  to, whom  an  apprentice  is  bound  can  not  assign  his  agreement  to  an- 
other ;  it  is  a  contract  of  personal  confidence.  Futrell  v.  Vann,  30 — p.  404. 
A  member  of  a  firm  can  not  make  the  firm  responsible  for  his  individual  debt 
without  the  consent  of  the  firm.  Xorment  v.  Johnston.  32 — 89.  A  agreed 
to  make  a  certain  article  for  B  in  payment  of  a  debt ;  afterwards  he  took  C 
in  as  a  partner  they  made  the  article ;  they  could  not  claim  pavment  from  B. 
Joyner  v.  Pool,  49—293. 

(190)   MORRISON  v.  CHAMBERS, 

122  N.  C,  689,  30  S.  E,  141—1898. 

Civil  action  on  a  promissory  note.  The  defendant  pleaded  mer- 
ger and  counterclaim.  Chambers  sold  a  tract  of  land  to  one  Fox, 
giving  bond  for  title  and  taking  notes  for  the  purchase-money, 
$625.  Afterwards  Chambers  executed  his  note  to  the  plaintiff  for 
$240,  and  gave  the  Fox  notes  as  collateral  security.  Fox  then  as- 
signed to  the  plaintiff  his  entire  interest  under  the  bond  for  title. 
The  plaintiff  sued  on  the  $240  note,  and  asked  that  it  be  declared 
a  lien  on  the  land  and  that  the  land  be  sold  to  pay  the  debt. 
Chambers  resisted  the  recovery  on  the  ground  that  by  the  purchase 


484  EFFECT    OF    CONTRACT. 

of  the  interest  of  Fox  in  the  land,  the  plaintiff  assumed  the  lia- 
bility of  Fox  for  the  purchase-money,  and  claimed  that  the  plain- 
tiff owed  him  the  difference  between  $240  and  $625,  and  demanded 
judgment  for  that  amount. 

Judgment    was    rendered    for    the    plaintiff,    and    defendant    ap- 
pealed. 

Douglas,  J.     .     .     .     We  see  no  error  in  the  judgment.     The 
defendant  contends  that  where  a  bond  for  title  is  given  to  secure 
the  conveyance   of   the   land   upon   the   payment   of   the   purchase- 
money  the  relations  of  vendor  and  vendee  are  similar  to  those  of 
mortgagor  and  mortgagee.     This  is  true,  but  it  does  not  help  the 
defendant.     The  legal  title   remained  in  him  after  the  title  bond 
was  given,  and  still  remains  in  him.     His  further  contention  that 
the  legal  title  was  conveyed  to  the  plaintiff  pro  tanto  by  the  hy- 
pothecation of  the  notes  for  the  purchase-money,  can  not  be  sus- 
tained on  any  authority.     The  assignment  to  the  plaintiff  of   the 
bond  for  title  simply  vested  in  him  the  right  to  demand  a  convey- 
ance of  the  land  upon  the  payment  of   the  purchase-money.     To 
that  extent  he  had  an  equitable  interest  in  the  land,  but  he  could 
not  be  considered  the  beneficial  owner  thereof  until  such  payment. 
There  is  no  allegation  that  the  plaintiff  expressly  assumed  the  pay- 
ment of  the  purchase-money,  and  there  is  no  legal  implication  to 
that  effect.     The  vendee  may  assign  his  bond  for  title  as  security 
for  another  debt,  just  as  he  could  execute  a  second  mortgage  if  he 
had  originally  held  the  legal  title.     Because  a  vendee  mortgages  his 
land  to   the   vendor  to   secure   the   purchase-money,   or   any   other 
debt,    and    subsequently    executes    a    second    mortgage    to    a    third 
party,  the  second  mortgagee  can  not  be  held  liable  to  the  vendor. 
There  is  no  privity  of  contract  between  them.     It  is  true  that  the 
first   mortgage   must    be    satisfied    before    any    subsequent    encum- 
brance; but  a  junior  mortgagee  can  sell  subject  to  the  prior  lien; 
that  is,  he  can  sell  the  mortgagor's  equity  of  redemption,  or  he  can 
abandon  his  own  lien.     If  the  first  mortgagee  sell  and  the  proceeds 
are  not  sufficient  to  pay  the  debt,  he  can  obtain  judgment  for  the 
surplus  only  against  the  makers  or  endorsers  of  the  note.     This 
court  has  repeatedly  held  that,  "the  note  evidencing  the  debt  is  the 
personal  obligation  of  the  debtor;  the  mortgage  is  a  direct  appro- 
priation of  tiie  property  to  its  security  and  payment.     Capehart  v. 
Dettrick,  91    N.   C,   344;   Bobbin   v.    Stanton,   120  N.   C,  253,   at 
page  256.      Tt    follows   that   after  the   appropriation   has   been   ex- 
hausted, the  debtor  alone  can  lie  pursued.     The  judgment  is 

Affirmed. 
See  Woodcock  v.   Bostic,  118—822.  ante  (184V 


ASSIGNMENT    OF     CONTRACT.  485 

2.  Assignment  of  rights. 
1.    AT    COMMON    LAW    AND    IN    EQUITY. 

(191)    STEDMAN  v.  RIDDICK, 
UN.  C,  29—1825. 

Trover  for  the  value  of  a  slave.  The  plaintiff  presented  a  hill 
of  sale  executed  by  the  defendant  to  one  Voight,  and  also  a  hill 
of  sale  from  Voight  to  himself  for  a  slave.  Voight  was  not  in 
possession  at  the  time  the  hill  of  sale  was  executed,  hut  the  de- 
fendant was  in  possession  claiming  the  slave  as  his  own,  and  after- 
wards sold  her  to  another  man,  who  took  her  out  of  the  State. 

The  court  charged  that  Voight  had  but  a  right  of  action,  which 
could  not  be  assigned  so  that  plaintiff  could  maintain  his  action, 
at  law.  There  was  a  judgment  for  defendant,  and  plaintiff  ap- 
pealed. 

Tayeor,  C.  J.  At  the  time  when  Voight  sold  the  slave  to  the 
plaintiff,  the  defendant  had  the  possession,  claiming  it  adversely 
against  all  the  world ;  and  the  question  is  whether  this  chose  in 
action  is  assignable,  so  as  to  enable  the  plaintiff  to  sue  in  his  own 
name.  For  a  chose  in  action  comprehends  specific  chattels,  as 
well  as  the  right  to  recover  a  debt  or  damages,  and  extends  to 
every  sort  of  chattel  property  of  which  a  man  hath  not  the  actual 
occupation,  but  a  bare  right  to  occupy  it,  and  a  suit  in  law  is  nec- 
essary to  recover  the  possession,  on  account  of  an  adversary  claim. 

The  distinction  in  our  law  between  choses  in  action  and  in  pos- 
session, corresponds  with  a  similar  one  in  the  civil  and  canon  laws, 
in  which  property  in  possession  is  termed  jus  in  re,  property  in 
action,  jus  ad  rem.  It  is  a  settled  maxim  of  the  common  law,  that 
no  chose  in  action  can  be  granted  or  assigned,  founded  upon  the 
policy  of  preventing  an  increase  of  lawsuits,  by  restraining  those 
who  would  not  assert  their  own  rights  from  transferring  them  to 
others  of  a  more  litigious  disposition.  The  rule  was  doubtless  more 
extensive  than  any  mischief  that  could  be  apprehended ;  and  it  has 
accordingly  been  limited  by  various  exceptions,  as  by  the  law  mer- 
chant relative  to  bills  of  exchange,  and  in  some  instances  respon- 
dentia bonds,  by  the  acts  making  bonds  and  notes  negotiable,  and 
to  the  equitable  sanction  which  is  given  to  the  assignment  of 
choses  in  action  for  a  valuable  consideration.  In  many  respects 
the  rule  at  law  is  merely  formal ;  for  it  is  held  that  policies  of  in- 
surance, and  judgments,  may  be  sued  for  by  the  assignee  in  the 
name  of  the  original  claimant.  But  I  know  of  no  authority  for 
the  position,  that  a  vendee  or  assignee  may  sue  for  property  in  his 
own  name,  which  the  vendor  or  assignor,  at  the  time  of  sale,  could 


486  EFFECT    OF    CONTRACT. 

only  recover  by  suit.  It  seems  to  me  that  much  of  the  mischief 
which  the  rule  aimed  originally  to  prevent  would  still  arise  under 
such  a  practice;  and  it  is  not  called  for  by  the  necessity  of  trade 
or  commerce,  or  any  of  those  causes  which  introduced  the  relaxa- 
tions. The  case  of  Morgan  v.  Bradley  (10  N.  C,  559),  was  deter- 
mined on  its  own  peculiar  circumstances ;  the  steer  was  turned  out 
in  the  range  a  very  short  time  before  the  sale,  at  which  time  both 
the  vendor  and  the  vendee  believed  it  to  be  still  there,  and  when 
driven  up  by  the  defendant  with  his  own  cattle,  he  believed  the 
steer  to  be  one  of  them.  The  possession  at  that  time  proceeded 
from  mistake,  and  could  scarcely  be  considered  adverse.  The 
judgment  must  be  affirmed.  Affirmed. 

See  Smith  v.  Grav,  18—42;  Monday  v.  Siler,  47—389;  Waugh  v.  Miller, 
33—235;  Bisph.  Eq.,*  sec.  162;  Page  Cont.,  1256;  Clark  Cont.,  362;  2  R.  C. 
L.,  593. 

(192)  HOPPISS  v.  ESKRIDGE, 

37  N.  C,  54—1841. 

Daniel,  J.  The  bill  [in  equity]  states  that  Richard  Eskridge, 
by  his  will  bequeathed  several  slaves  to  his  wife  for  life,  remainder 
to  his  daughter,  Martha ;  that  Martha  married  Thomas  Lipscombe, 
and  died,  in  the  lifetime  of  her  mother,  the  tenant  for  life ;  that 
subsequently  the  tenant  for  life  died;  that  William  Eskridge  ad- 
ministered on  the  estate  of  Martha  Lipscombe,  and  sold  the  slaves ; 
that  Lipscombe,  the  husband,  assigned  by  deed  to  the  plaintiff  all 
his  equitable  interest  in  the  estate  of  his  late  wife  in  the  hands  of 
her  administrator  for  the  sum  of  $1,000.  The  bill  is  filed  by  the 
assignee  against  the  assignor  and  the  administrator  of  his  late 
wife,  Martha,  for  an  account.     .     .     . 

A  person,  out  of  possession,  can  not  at  law  convey  anything  to 
a  stranger;  he  can  only  give  a  release  to  one  in  possession.  Un- 
derwood v.  Lord  Courstown,  2  Scho.  &  Lefr.,  65.  But,  in  equity, 
choses  in  action  are  assignable  for  a  valuable  consideration  and 
bona  fide — Townsend  v.  Windham,  2  Ves.,  6;  Whitfield  v.  Faucett, 
1  Ves.,  332,  391 — and  especially  equitable  choses  in  action,  as  in 
this  case ;  and  such  assignment  is  supported  in  equity  on  the 
ground  that  it  is  an  agreement,  by  which  the  assignor  is  bound  to 
give  to  the  assignee  the  benefit  of  that  which  he  has  assigned.  It 
is  by  agreement,  in  most  cases  of  choses  in  action,  that  the  assignee 
takes.  The  covenant  of  the  assignor  is,  in  this  court,  a  disposition 
of  the  thing  assigned  that  could  be  enforced  against  him.  Upon 
principle,  therefore,  the  right  of  an  assignee  of  a  chose  in  action 
is  derived  from  his  right  to  call  upon  the  assignor  for  a  specific 
performance  of  the  agreement  between  them.  He  is  entitled  to 
whatever  interest  the  assignor  himself  possesses,  or  is  capable  of 


ASSIGNMENT    OF    CONTRACT.  487 

procuring.  6  Ves.,  394;  2  Roper  on  Hus.  &  Wife,  510.  While  we 
make  these  remarks,  it  may  be  proper  to  state  that  the  rule  does 
not  extend  to  land.  For  every  grant  of  land,  except  as  a  release, 
is  void  as  an  act  of  maintenance,  if  at  the  time  the  lands  were 
in  the  actual  possession  of  another  person,  claiming  under  a  title 
adverse  to  that  of  the  grantor.  Such  assignments  were  offenses  in 
England,  both  by  the  common  law  and  under  the  statutes.  4 
Kent's  Com.  (3  Ed.),  446-450.  And  all  agreements  tainted  with 
maintenance  or  champerty  are  void  in  equity  as  well  as  at  law. 
Wallis  v.  Duke  of  Portland,  3  Ves.,  494;  Powell  v.  Knowler,  2 
Atk.,  224;  Stephens  v.  Bagwell,  15  Ves.,  139;  Wood  v.  Downs,  18 
Ves.,  120;  Harrington  v.  Long,  2  Mylne  &  Keen,  590.  Champerty 
consists  in  the  unlawful  maintenance  of  a  suit,  in  consideration  of 
a  bargain  for  a  part  of  the  thing,  or  some  profit  out  of  it.  But  in 
this  case,  the  deed  of  assignment  to  the  plaintiff  appears  on  its 
face  to  be  absolute,  and  for  the  consideration  of  $1,000;  the  proof 
is  that  the  plaintiff  gave  that  sum,  and  there  is  no  evidence  of 
champerty  offered  by  the  defendants.  The  assignor  is  made  a  de- 
fendant, and  he  suffers  the  bill  to  be  taken  pro  confesso;  which, 
we  think,  is  in  this  case  an  admission  that  the  assignment  was 
made  as  stated  in  the  bill,  or,  at  least,  precludes  the  other  defend- 
ant from  raising  the  objection.  The  defendant  acknowledges  a 
balance  in  his  hands,  belonging  to  the  estate  of  his  intestate,  of 
$1,480.10.  Under  all  the  evidence  in  the  case,  we  are  of  the  opin- 
ion that  the  plaintiff  is  entitled  to  a  decree  for  that  sum,  and  also 
to  a  decree  for  an  account,  if  he  wishes  it.     .     .     . 

Per  Curiam.  Decree  for  the  plaintiff. 

The  common  law  rule  as  to  a  conveyance  of  land  held  adversely  to  the 
grantor  was  in  force  in  this  State  (The  Code,  sec.  1333,)  in  that  it  was  void 
onlv  in  relation  to  the  person  holding  the  land  and  those  claiming  under  him, 
but  was  valid  as  to  all  others.  The  Code.  sec.  177,  gave  the  right  of  action 
to  the  grantee  in  his  own  name,  whenever  he,  or  any  grantor,  or  other  per- 
son through  whom  he  mav  derive  title,  might  maintain  such  action.  Johnson 
v.  Prairie,  94—773.  The  Code,  sec.  1333,  was  repealed  by  ch.  42,  Laws  1899. 
See  Revisal,  400. 

(193)  SWEPSON  v.  HARVEY, 
69  N.  C,  387—1873. 

Civil  action,  in  which  there  was  a  judgment  for  the  plaintiff, 
and  the  defendant  appealed. 

Reade,  J.  It  appears  that  the  defendants  were  indebted  by  bond 
to  one  Palmer,  and  that  Palmer  made  an  equitable  assignment  of 
the  bond  before  due  to  one  Ireland,  and  that  Ireland  made  an 
equitable  assignment  of  the  bond  before  due  to  the  plaintiff.  Of 
all  which  the   defendants  had  notice,   so  that  the  defendants  be- 


488  EFFECT    OF    CONTRACT. 

came  the  debtors  of  the  plaintiff.  This  was  prior  to  the  adoption 
of  the  present  Constitution,  abolishing  the  distinction  between 
courts  of  law  and  courts  of  equity.  And  in  suing  the  defendants 
in  a  court  of  law,  as  the  plaintiff  did,  he  was  obliged  to  sue  in  the 
name  of  Palmer,  the  payee  of  the  bond.  And  Palmer  moved  to 
dismiss  the  suit,  which  compelled  the  plaintiff  to  file  a  bill  in 
equity  to  enjoin  Palmer  from  dismissing,  and  to  compel  him  to 
allow  the  use  of  his  name  in  prosecuting  the  suit.  Upon  the  com- 
ing in  of  Palmer's  answer  denying  plaintiff's  equity  the  injunction 
was  dissolved;  and  then  Palmer  dismissed  the  suit  at  law  which 
the  plaintiff  had  instituted  in  his  name  against  the  defendants. 
And  the  plaintiff's  equity  suit  against  Palmer  was  dismissed  also. 
This  was  in  the  fall,  1867.  In  1868  the  new  Constitution  was 
adopted  uniting  the  courts  of  law  and  courts  of  equity;  and  soon 
afterwards  The  Code  was  adopted  enabling  the  real  party  in  in- 
terest to  sue,  and  subsequently  the  plaintiff  brought  this  suit. 

1.  The  defendants'  first  objection  to  the  plaintiff's  right  to  re- 
cover is  that  the  equity  suit  against  Palmer,  whether  pending  or 
dismissed,  is  a  bar  to  this  action.  We  do  not  think  so.  The  ob- 
ject of  that  equity  suit  was  not  the  recovery  of  the  debt,  but  to 
compel  Palmer  to  allow  the  plaintiff  to  use  his  name  in  a  suit  at 
law  upon  the  bond  against  the  defendants.  And  his  failure  to 
secure  the  right  to  sue  in  Palmer's  name  is  certainly  no  bar  to  su- 
ing in  his  own  name  as  soon  as  that  remedy  was  provided  by  law. 

2.  The  defendants'  second  objection  is,  that  after  Palmer  dis- 
missed the  action  at  law  which  the  plaintiff  had  instituted  in  his 
name  against  the  defendants,  they  paid  off  the  debt  to  Palmer. 
This  is  their  loss,  and  if  done  in  good  faith,  it  is  their  misfortune. 
But  still  it  can  not  affect  the  plaintiff's  rights.  (The  court  held 
that  there  was  error  in  admitting  the  judgment  in  the  case  of  Pal- 
mer against  Ireland  for  the  purpose  of  showing  an  assignment  to 
the  plaintiff,  since  the  defendant  was  not  a  party  to  that  action.) 

2.    UNDER   THE    LAW    MERCHANT. 

(194)   MARTIN  v.  HAYES, 

44  X.  C,  423—1853. 

Action  of  assumpsit,  brought  on  defendant's  assignment  of  a 
note  under  seal,  as  follows:  "Due  Newton  &  Haves  nine  hundred 
and  thirty-seven  dollars— six  hundred  and  sixty-three  dollars  and 
seven  cents  to  be  paid  to  J.  M.  Martin  when  called  upon,  and  the 
balance  to  be  paid  to  said  Newton  &  Hayes  for  value  received  of 
them.     Witness  my  hand  and  seal.     5th   Inly,  1851. 

(Signed)  M.  Fain.  (Seal.)" 


ASSIGNMENT    OF    CONTRACT.  489 

Endorsed  as  follows:  "For  value  received  I  assign  to  John  M. 
Martin  six  hundred  and  sixty-three  dollars  and  seven  cents  in  this 
note,  with  the  interest  on  that  amount  from  5th  July,   1851. 

(Signed)       G.  W.  Hayes." 

Upon  the  plea  of  general  issue  and  no  assignment  to  plaintiff, 
there  was  a  judgment  for  the  plaintiff,  and  defendant  appealed. 

Pearson,  J.  In  the  court  below  the  defendant  insisted  that  to 
fix  him  with  liability,  it  was  necessary  for  the  plaintiff  to  prove  a 
demand  on  Fain,  the  obligor,  and  nonpayment  by  him.  His  Honor 
was  of  opinion  that  the  defendant  was  liable  without  such  proof. 

We  are  at  a  loss  to  see  any  ground  on  which  the  defendant  was 
liable  to  pay  the  amount,  even  if  such  demand  and  nonpayment 
had  been  proved.  He  made  no  express  promise  to  pay,  and  we  are 
left  to  conjecture  that  His  Honor  was  of  opinion  that  a  promise 
to  pay  was  implied  by  some  principle  of  the  "law  merchant." 

According  to  the  "law  merchant,"  which  is  incorporated  into 
the  common  law,  a  bill  of  exchange  may  be  assigned  by  endorse- 
ment. This  was  an  exception  to  the  common  law  maxim,  "choses 
in  action  can  not  be  assigned,"  and  was  forced  upon  the  courts  as 
soon  as  England  aspired  to  be  a  commercial  nation.  A  conse- 
quence of  the  assignment  was  to  make  the  endorser  liable  for  the 
amount  of  the  bill,  provided  it  was  presented  and  due  notice  given 
of  its  dishonor.  The  Statute  of  Anne  makes  promissory  notes  as- 
signable in  the  same  way,  as  inland  bills  of  exchange  were  assign- 
able according  to  the  law  merchant ;  and  our  statute  makes  notes 
under  seal  for  the  payment  of  money,  assignable  in  the  same  way 
as  inland  bills  of  exchange  and  promissory  notes. 

The  effect  of  the  assignment  is  to  vest  the  legal  interest  in  the 
assignee,  and  to  give  him  the  right  to  sue  in  his  own  name  upon 
the  bill,  note  or  bond.  As  a  matter  of  course,  therefore,  the  as- 
signment must  be  of  the  whole  bill,  note  or  bond.  An  assignment 
by  piecemeal  of  a  part  to  one  man,  and  a  part  to  another,  is  an 
idea  unknown  to  the  law  merchant,  and  wholly  repugnant  to  every 
principle  of  law  and  of  good  sense.  If  the  payee  can  assign  $663.07 
of  a  bill,  note  or  bond  to  one  man,  and  keep  the  balance  himself, 
he  may,  on  the  same  principle,  divide  it  into  smaller  parts,  and 
assign  portions  to  fifty  different  men,  all  of  whom  would  acquire 
a  legal  title,  and  have  a  separate  cause  of  action  for  their  re- 
spective shares:  so,  there  might  be  fifty  lawsuits  for  different 
parts  of  one  note.  This  is  against  reason,  and  is,  therefore,  not  law. 
The  written  statement  made  on  the  note  by  the  defendant  is  not 
an  assignment  according:  to  the  law  merchant  for  another  reason. 
An  assignment  can  only  be  made  by  the  payee,  or  the  person  hav- 
ing the   legal   title   and   right   to   sue.      Newton   &   Hayes   are  the 


490  EFFECT    OF    CONTRACT. 

payees,  and  the  defendant,  in  making  the  statement,  does  not  pro- 
fess to  act  for,  or  in  the  name  of  the  firm. 

As  there  has  been  no  assignment,  according  to  the  law  merchant, 
and  a  liability  to  pay  is  implied  only  from  the  fact  of  an  assign- 
ment, it  follows  that  the  defendant  is  not  liable,  and  the  plaintiff 
has  no  cause  of  action  against  him.  There  is  no  express  promise 
or  guaranty  and  there  is  no  ground  upon  which  a  liability,  either 
absolute  or  qualified,  can  be  made  by  implication. 

We  are  aware  that  there  is  a  general  impression  among  the  peo- 
ple, that  an  assignment  of  any  paper  creates  a  qualified  liability, 
and  it  is  evident  from  the  ground  taken  by  the  defendant  on  the 
trial  below  that  he  supposed  his  assignment,  according  to  the  law 
merchant,  imposed  upon  him  a  qualified  liability,  viz.,  upon  due 
notice  of  demand  and  nonpayment.  In  this,  unfortunately  for 
the  plaintiff,  there  was  a  mistake.  The  common  law,  as  distin- 
guished from  the  law  merchant,  required  an  express  guaranty. 
The  law  merchant  implied  a  qualified  liability  from  the  fact  of  an 
assignment  according  to  the  custom  of  merchants.  What  the 
plaintiff  calls  an  assignment  among  merchants  has  no  legal  effect, 
but  is  simply  an  entry  or  memorandum  in  writing. 

Per  Curiam.     Judgment  reversed,  and  venire  de  novo  awarded. 

In  Etheridge  v.  Vernoy,  74 — 800,  the  payee  assigned  parts  of  the  note  to 
two  different  persons,  and  a  suit  in  equity  to  which  they  were  all  parties  was 
sustained,  the  first  assignee  having  priority  in  payment.  One  holding  a  bond 
for  title  to  land  may  assign  part  of  his  interest,  and  the  assignee  gets  an 
equitable  interest.     Cannon  v.  Young,  89 — p.  264 ;  3  Page  Cont.,  sec.  1265. 

(195)   BANK  v.  BYNUM, 
84  N.  C,  24,  37  A.  R.,  604—1881. 

Controversy  submitted  without  action,  upon  facts  agreed.  The 
defendants,  Bynum  &  Daniel,  executed  an  instrument  of  writing 
to  the  Taylor  Manufacturing  Company  for  $250,  payable  "with 
exchange  on  New  York,  .  .  .  and  also  all  counsel  fees  and  ex- 
penses in  collecting,  .  .  .  expressly  providing  that  the  machinery 
for  which  the  note  was  given  should  remain  the  property  of  the 
payees,  and  "said  company  have  full  power  to  declare  this  note 
due  and  take  possession  of  the  said  engine  and  separator  at  any 
time  they  may  deem  this  note  insecure,  even  before  the  maturity 
of  the  same." 

The  company  endorsed  the  note  to  the  plaintiff  before  maturity 
and  without  notice  of  any  defense.  At  the  time  of  the  endorse- 
ment to  the  plaintiff,  the  company  was  indebted  to  the  defendants 
in  the  sum  of  $305.15,  and  this  is  still  unpaid. 

The  court  held  that  the  paper  was  not  negotiable,  and  that  de- 


ASSIGNMENT    OF    CONTRACT.  491 

fendants   were   entitled   to   the   counterclaim.      From   a   judgment 
against  it,  the  plaintiff  appealed. 

Ashe,  J.  The  only  question  presented  by  the  appeal  is  whether 
the  indebtedness  to  the  defendants  can  avail  them  as  a  set-off, 
counterclaim,  or  defense  against  the  demand  of  plaintiff,  and  that 
depends  upon  the  character  of  the  writing  declared  on — whether  it 
is  negotiable  or  not. 

The  essential  element  of  a  negotiable  promissory  note  is,  that  it 
should  be  certain.  Certainty,  first  as  to  the  payee ;  secondly,  as 
to  the  maker;  thirdly,  as  to  the  amount  to  be  paid;  fourthly,  as  to 
the  time  when  the  payment  is  to  be  made;  and  fifthly,  as  to  the 
fact  itself  of  the  payment.  1  Parsons  on  Bills  and  Notes,  30. 
The  instrument  under  consideration  is  wanting  in  two  of  these 
qualities,  to  wit,  in  the  amount  to  be  paid  and  the  time  of  pay- 
ment. In  addition  to  the  specific  sum  promised,  it  stipulates  for 
the  payment  of  "all  counsel  fees  and  expenses  in  collecting  the 
note  if  it  is  sued  on  or  placed  in  the  hands  of  an  attorney  for  col- 
lection ;"  and  is  made  payable  in  current  rate  of  exchange  on  New 
York.  The  stipulation  in  a  written  promise  to  pay  a  certain  sum 
and  also  "all  fines  acording  to  rules,"  "all  other  sums  that  may  be 
due,  the  current  rate  of  exchange  to  be  added,"  or  "deducting  all 
advances  or  expenses,"  have  been  held  to  deprive  the  instrument 
of  the  character  of  negotiability.     1  Parsons,  37. 

In  Wood  v.  North,  84  Penn.  St.  Rep.,  407,  where  the  action  was 
on  a  note  in  which  there  was  a  promise  to  pay  a  certain  sum,  and 
five  percent  collection  fee,  if  not  paid  when  due,  Sharswood,  J., 
says :  "It  is  a  necessary  quality  of  a  negotiable  paper  that  it  should 
be  simple,  certain,  unconditional,  and  not  subject  to  any  contin- 
gency." And  it  was  held  in  that  case  that  the  insertion  in  the 
note  of  the  clause,  "and  five  percent  collection  fee  if  not  paid 
when  due,"  rendered  the  note  uncertain  and  destroyed  its  nego- 
tiability. 

In  Missouri  it  has  been  held  that  an  instrument  whereby  the 
maker  promises  to  pay  a  specific  sum,  and  agrees,  if  the  sum  be 
not  paid  at  maturity  and  the  note  is  placed  in  the  hands  of  an 
attorney  for  collection,  to  pay  ten  percent,  in  an  addition  as  an 
attorney's  fee,  is  not  a  promissory  note,  as  a  part  of  the  amount 
agreed  to  be  paid  is  uncertain  and  contingent.  Bank  v.  Gay,  63 
Mo.,  33 ;  Goodloe  v.  Taylor,  10  N.  C.  458. 

But  there  is  another  serious  objection  to  the  claim  set  up  for 
the  negotiability  of  this  instrument.  It  stipulates  that  the  payees 
shall  have  full  power  to  declare  the  note  due  at  any  time  they  may 
deem  the  note  insecure,  even  before  the  maturity  of  the  same. 
This  divests  it  of  the  quality  of  certainty  in  the  time  of  payment, 
which  as  has  been  shown  is  one  of  the  essential  elements  of  nego- 


492  HFFKCT    OF    CONTRACT. 

tiability.  The  time  of  payment  may  be  hastened  at  the  option  of 
the  payees,  and  is  therefore  uncertain.  And  it  has  been  held  in 
Michigan  that  it  is  essential  to  a  promissory  note  that  it  be  payable 
at  a  time  that  must  certainly  arrive  in  the  future,  upon  the  hap- 
pening of  some  event,  or  the  completion  of  some  period,  not  de- 
pending upon  the  volition  of  anyone.  Brooks  v.  Hargreaves,  21 
Mich.,  254. 

Relying  upon  these  authorities,  we  hold  that  the  instrument  in 
question  is  not  negotiable. 

The  next  inquiry  is,  can  the  defendants,  the  note  being  assigned 
before  maturity,  avail  themselves  of  the  indebtedness  of  the  as- 
signor to  them,  as  a  valid  defense  to  the  action? 

In  the  early  history  of  the  law,  the  transfers  of  all  choses  in 
action,  including  bills  and  notes,  were  forbidden  by  the  common 
law,  the  rigid  rule  of  which  was  first  relaxed  by  the  use  of  bills  of 
exchange,  which  was  the  result  of  commercial  convenience ;  and 
hence  the  law  on  this  subject  is  termed  the  "Law  Merchant." 
Promissory  notes  were  first  made  negotiable  in  England,  like  in- 
land bills  of  exchange,  by  the  statute  of  3  and  4  Anne,  ch.  9,  and 
in  this  State  by  our  Act  of  1762,  which  is  a  literal  copy  of  that 
statute.  But  to  attain  the  negotiability  intended  to  be  conferred  by 
that  act,  it  must  possess  all  the  attributes  of  an  inland  bill  of  ex- 
change as  to  certainty,  etc. ;  and  if  it  should  lack  any  of  its  essen- 
tial qualities,  it  would  still  be  a  common  law  instrument  and  sub- 
ject to  the  principles  of  that  law  in  regard  to  choses  in  action.  As 
for  instance,  where  a  nonnegotiable  note  is  assigned,  the  action  at 
law  must  be  brought  by  the  assignee  in  the  name  of  the  assignor ; 
and  the  assignee  is  put  by  the  assignment  in  no  better  condition 
than  the  assignor,  and  only  steps  into  his  shoes,  and  the  note  as- 
signed is  subject  to  all  the  equities  and  defenses  which  existed  be- 
tween the  original  parties  before  notice  of  the  assignment ;  and  it 
made  no  difference  whether  the  note  was  assigned  before  or  after 
maturity.  The  rule  that  the  endorsee  of  a  bill  or  note  before  ma- 
turity  takes  it  freed  from  all  equities  and  defenses,  except  endorsed 
payments,  is  a  principle  of  the  law  merchant,  and  applies  to  nego- 
tiable instruments,  but  has  no  application  to  notes  that  are  not 
negotiable.  Where  an  action  is  brought  on  a  note  of  the  latter 
class  by  the  assignee  in  the  name  of  the  assignor,  the  rule  is,  that 
the  equities  set  up  by  the  defendant  against  the  assignee  must  be 
such  as  subsisted  at  the  time  the  defendant  received  notice  of  the 
assignment.  1  Dan.  Neg.  Inst.,  555;  1  Parsons,  46;  Harris  v.  Bur- 
well.  65  N.  C,  584.  But  the  common  law  rule  that  an  action  by 
the  assignee  of  a  paper  that  is  not  negotiable  must  be  brought  in 
the  name  of  the  assignor  has  been  changed  in  this  State  by  section 
55  of  The  Code,  so  as  to  enable  him  to  sue  in  his  own  name,  but 


ASSIGNMENT     OF     CONTRACT.  493 

without  prejudice  to  any  setoff  or  other  defense  existing  at  the 
time  of  or  hefore  notice  of  assignment.  This  section,  it  will  be 
seen,  makes  no  change  whatever  in  the  law,  except  as  to  allowing 
the  assignee  to  sue  in  his  own  name,  instead  of  that  of  the  assignor. 
There  is  no  error,  and  the  judgment  of  the  Superior  Court  of 
Wilson  must  be  Affirmed. 

The  term  negotiation  refers  to  the  transfer  of  negotial  le  instruments  ac- 
cording to  the  law  merchant,  and  this  involved  two  rights  in  the  transferee: 
one  to  sue  in  his  own  name,  and  the  other  to  take  the  instrument  discharged 
of  all  defenses  against  the  original  holder.  Assignment  refers  to  the  transfer 
of  claims  other  than  negotiable  instruments,  and  the  assignee  was  required 
to  sue  in  the  name  of  the  assignor,  and  took  only  such  rights  as  the  assignor 
had.  By  statute,  hereafter  noticed,  the  action  must  now  be  brought  in  the 
name  of  the  assignee  as  the  real  party  in  interest,  and  the  principal  distinc- 
tion is  in  the  rights  conferred.  Shaw  v.  R.  R.,  101  U.  S.,  557 ;  2  R.  C.  L., 
636 :  4  Cyc,  92. 

What  is  a  negotiable  instrument  is  determined  by  the  law  merchant,  except 
as  modified  by  statute,  and  in  many  of  the  States  the  law  has  been  fixed  and 
rendered  more  uniform  by  the  adoption  of  the  Negotiable  Instrument  Law. 
See  Revisal,  2151  et  seq.  Under  sec.  2152,  specifying  payment  with  exchange 
does  not  affect  negotiability;  nor  does  specifying  a  particular  kind  of  money, 
sec.  2155;  requiring  the  payment  of  an  attorney's  fee  can  not  be  enforced 
and  does  not  affect  negotiability,  sec.  2346.  Where  the  contracts  are  not 
negotiable  in  form,  they  are  governed  by  the  common  law  as  to  the  rights  of 
the  parties.  Havens  v.  Potts,  86—31;  Wright  v.  Kenney,  123—618:  Bank  v. 
Warlick,  125 — 593:  Johnson  v.  Lassiter.  155 — 47. 

3.      UNDER   STATUTE. 

BANK  v.  BYNUM, 
Ante   (195). 

In  North  Carolina,  The  Code,  sec.  41,  provides  that  "all  bonds,  bills,  and 
notes  for  money,  with  or  without  seal,  and  expressed  or  not,  to  be  payable  to 
order  and  for  value  received,  may  be  assigned  over  in  like  manner  as  inland 
bills  of  exchange  are  by  the  custom  of  merchants  in  England,  and  the  as- 
signee may  maintain  an  action  thereon  in  his  own  name,  provided  the  original 
obligee  could  have  maintained  an  action."  This  was  enacted  in  1762  and 
1786,  and  was  following  substantially  the  statute  3  &  4  Anne.  In  the  Revisal 
of  1905  this  was  not  carried  forward,  except  as  included  in  the  Negotiable 
Instr.  Law,  and  in  section  400,  which  provides  that  "Every  action  must  be 
prosecuted  in  the  name  of  the  real  party  in  interest,  except  as  otherwise 
provided;  but  this  section  shall  not  be  deemed  to  authorize  the  assignment 
of  a  thing  in  action  not  arising  out  of  contract.  ...  In  the  case  of  an 
assignment  of  a  thing  in  action  the  action  by  the  assignee  shall  be  without 
prejudice  to  any  setoff  or  other  defense,  existing  at  the  time  of,  or  before 
notice  of,  the  assignment :  but  this  section  shall  not  apply  to  a  negotiable 
promissory  note  or  bill  of  exchange,  transferred  in  good  faith,  and  upon 
good  consideration,  before  due."     See  Pell's  Revisal,  400,  and  cases  cited. 

WOODCOCK  v.  BOSTIC, 
Ante   (184). 


494  EFFECT    OF    CONTRACT. 

RAILROAD  CO.  v.  RAILROAD  CO., 

Ante   (189). 

The  general  test  of  assignability  of  a  chose  in  action  is  whether  or  not  it 
would  survive  to  the  personal  representative.  2  Am.  &  Eng.  Encyc,  1017; 
Clark  Cont.,  365.     See  Revisal,  156,  157. 

"Contracts  other  than  personal  contracts,  or  contracts  containing  a  pro- 
vision against  assignment,  or  contracts  forbidden  to  be  assigned  by  statute, 
may  be  assigned  at  modern  law."  3  Page  Cont.,  sees.  1259,  1262,  1263;  12 
L  R  A.,  493;  14  L.  R.  A.,  126;  2  R.  C.  L.,  598;  4  Cyc,  20;  Pearson  v.  Mil- 
lard, 150—303. 

A  contingent  interest  or  expectancy  may  be  assigned.  McDonald  v.  Mc- 
Donald 58—211;  Masten  v.  Marlow,  65—595;  Fortescue  v.  Satterthwaite, 
23—566';  Watson  v.  Dodd,  68—528;  Bodenhamer  v.  Welch,  89—78;  Petty  v. 
Rousseau,  94—355;  Watson  v.  Smith,  110—6;  Foster  v.  Hackett,  112—546; 
Wright  v.  Brown,  116—26;  Taylor  v.  Smith,  116—531;  Brown  v.  Dail,  117— 
41 ;  Kornegav  v.  Miler,  137—659.  A  bare  possibility  of  reverter  is  not  as- 
signable. Helms  v.  Helms,  137—206.  A  purchaser  at  sheriff's  sale  may  assign 
his  bid.  Blount  v.  Davis,  13—19.  An  entry  on  land  is  a  right  that  may  be 
assigned.  Bryan  v.  Hodges,  107—492.  Insurance  policy  is  assignable.  Fer- 
tilizer Co.  v.  Reams,  105—283.  "Unplanted  crop  is  assignable,  provided 
location  is  definite.  Rountree  v.  Britt,  94—104.  Claims  against  U.  S.  Gov- 
ernment can  not  be  assigned,  but  the  fees  of  a  U.  S.  Marshal  as  between  him 
and  his  deputies  may  be  assigned,  Wallace  v.  Douglas,  103—19.  A  pension 
payable  in  the  future  is  not  assignable.     48—547;  131—87. 

4.    MODE    OF    ASSIGNMENT. 

(196)  WINBERRY  v.  KOONCE, 

83  N.  G,  351—1880. 

Civil  action,  in  which  there  was  a  judgment  for  plaintiff,  and 
defendant  appealed. 

Diixard,  J.  The  case  was  this:  One  Mills  had  a  judgment 
docketed  against  W.  M.  Coston,  which  was  a  prior  lien  to  any 
other  on  the  lands  of  the  debtor.  Subsequently  Coston  executed  a 
mortgage  on  his  land  to  secure  the  creditors  therein  named,  and 
that  being  duly  registered  became  the  second  lien  on  the  land,  and 
after  the  registration  of  the  mortgage  the  present  plaintiff  recov- 
ered two  justice's  judgments  against  Coston  and  had  them  dock- 
eted, whereby  he  acquired  the  third  lien. 

In  this  situation  the  two  judgment  creditors,  Mills  and  Win- 
berry,  issued  executions,  under  one  of  which,  the  entire  estate  in 
the  land,  and  under  the  other,  only  the  equity  of  redemption  could 
have  been  sold,  and  when  the  property  was  being  cried  by  the 
sheriff,  the  plaintiff  as  he  alleges  sold  his  two  judgments  to  Koonce 
at  the  price  of  one-third  of  their  amount,  and  the  money  not  being 
paid,  this  action  was  brought  to  recover  the  agreed  price.  The 
defendant  by  his  answer  denies  any  sale,  executed  or  executory,  of 
plaintiff's  judgments  to  him  at  any  price,  and  to  settle  the  ques- 


ASSIGNMENT    OF    CONTRACT.  495 

tion  of  sale  or  no  sale,  the  court  submitted  to  the  jury  the  issue: 
"Did  plaintiff  sell  the  judgments  to  defendant  for  one-third  of 
their  amount?"  and  the  jury  in  their  verdict  responded  "yes." 

[The  court  then  discusses  two  questions:  1.  The  consideration, 
holding  that  the  transfer  of  the  judgments  was  a  sufficient  con- 
sideration for  the  defendant's  promise  to  pay,  whether  he  col- 
lected anything  or  not.  2.  That  while  the  judgments  were  a  lien 
on  land,  they  were  not  any  interest  in  land  that  required  a  transfer 
in  writing  under  the  statute  of  frauds.] 

3.     The  point  was  taken  that  judgment  should  be  rendered  for 
defendant,  on  the  ground  that  what  is  called  an  assignment  was 
incomplete  and  inoperative  to  pass  any  equitable  right  to  defendant 
in  the  two  judgments:     It  is  unquestionable,  that  while  the  judg- 
ments were  assignable,  they  must  have  been  assigned  in  such  man- 
ner as  to  be  legally  sufficient  to  pass  the  equitable  interest  therein, 
or  otherwise  it  would  be  but  executory  and  the  action  could  not 
be  maintained.     No  particular  mode  of  assignment  is   prescribed 
or  required.     It  may  be  done  with  or  without  writing,  and  in  any 
form  of  words,  provided  the  intent  to  assign  be  clear  and  some  act 
be  done  between  the  parties  amounting  to  an  appropriation,  or  a 
constructive  delivery.     Adams  Eq.,  54;  2  Schouler  on  Per.  Prop., 
676.     An  intent  to  sell  by  one  and  intent  to  buy  in  the  other,  at  a 
price  paid  or  agreed  to  be  paid,  with  such  conduct  or  acts  as  means 
that  the  one  resigns  all  future  control  of  the  chose,  and  the  other 
assumes  to  regard  it  as  his  own,  is  an  appropriation  inter  se,  and 
on  notice  to  the  party  who  is  to  pay  it,  approximates  a  delivery  of 
a  chattel,  and  is  then  called  a  constructive  delivery,  and  thereupon 
the  right  of  the  assignee  is  perfected  against  any  possible  further 
control  of  the  assignor.    Adams  Eq.,  55 ;  Schouler  Per.  Prop.,  678. 
Now  here  the  jury  find  the  sale  of   the   judgments,   and  by  the 
evidence   sent   up   as   a  part   of   the   judge's   case,   taking   it   most 
strongly  against  the  appellant,  the  fact  was  that  after  the  land  was 
knocked  down  to  the  plaintiff,  the  defendant  in  execution  of  the 
agreement  had  the  entry  of  the  sale  to  plaintiff  changed  into  his 
own  name,  and  he  then  and  there  rehearsed  the  terms  of  the  trade 
and  procured  an  indulgence  from  the  plaintiff  for  the  money  which 
was  to  be  paid  him,  until  the  next  court.     And  herein  there  was 
plainly  the  assent  of  the  plaintiff  to  cease  any  further  control  of 
the  judgments,  and  of  defendant  to  hold  himself  to  be  owner,  thus 
making  in  law  an  appropriation  of  the  judgments  to  the  defend- 
ant ;  and  besides  this,  there  was  a  recital  before  Coston,  the  judg- 
ment debtor,  of  the  sale  and  its  terms,  and  therein  the  equitable 
interest  of  defendant  was  perfected  as  much  so  as  by  delivery  in 
the  case  of  a  tangible  chattel.     We  hold  therefore  that  the  assign- 
ment was  executed  and  the  equitable  title  passed. 


496  EFFECT    OF    CONTRACT. 

4.  It  was  urged  that  the  judgment  docket  stood  in  the  name  of 
the  plaintiff  and  he  still  had  control  and  therefore  judgment  should 
not  be  entered  for  the  plaintiff.  The  answer  is,  it  might  be  most 
desirable  that  the  assignment  should  have  been  entered  of  record, 
but  it  was  not  necessary.  It  is  enough  if  the  assignment  be  made 
in  such  manner  as  to  give  defendant  the  right  to  go  into  court  and 
have  the  aid  of  the  court  to  enforce  the  judgments,  upon  any  proof 
of  ownership,  whether  by  record  or  other. 

5.  Upon  the  point  as  to  the  measure  of  damages,  the  assignment 
of  the  judgments  being  determined  to  be  a  sufficient  consideration, 
it  is  evident  that  the  plaintiff  was  entitled  to  recover  the  third  of 
the  judgments  as  held  by  the  court  below. 

There  is  no  error  in  His  Honor's  rulings  upon  the  numerous 
points  made  by  the  defendant  against  the  rendition  of  the  judg- 
ment on  the  verdict  of  the  jury,  and  the  verdict  must  be  affirmed. 
Let  this  be  certified. 

(197)  WALLSTON  v.  BRASWELL, 

54  N.  C,  137—1853. 

Pearson,  J.  .  .  .  In  our  case  an  executor  held  a  residuary 
fund  to  be  divided  among  the  children  of  the  testator.  The  hus- 
band of  one  of  the  children  assigned  his  share.  Afterwards  the 
executor,  having  no  notice  of  the  assignment,  took  his  note  with- 
out security  and  paid  off  debts  at  his  request,  with  an  express  un- 
derstanding that  the  amount  advanced  should  be  deducted  from 
his  share.  We  think  it  clear  that  he  is  entitled  to  a  credit  for  the 
amount  in  a  settlement  with  the  assignee. 

Such  an  interest  is  not  assignable  at  law.  Equity  permits  it  to 
be  assigned,  but  to  guard  against  fraud  the  assignment  is  consid- 
ered imperfect  until  consummated  by  notice  to  the  trustee.  It  is 
supposed  that  prudent  men  will  make  inquiries  of  him  before  deal- 
ing with  the  cestui  que  trust;  and  the  object  of  requiring  notice  to 
be  given  to  the  trustee  is  to  put  it  in  his  power  to  give  correct  in- 
formation. 

In  regard  to  land,  fines  and  common  recoveries,  which  are  mat- 
ters of  record,  livery  of  seizin  and  the  enrollment  of  deeds  of  bar- 
gain and  sale  give  notoriety  to  the  change  of  ownership.  A  lease 
for  years  is  consummated  by  the  entry  of  the  lessee,  the  purchaser 
of  chattels  may  take  them  into  possession  (if  he  fails  to  do  so  it 
is  a  strong  badge  of  fraud,  Twyne's  case),  and  the  change  of  pos- 
session is  evidence  of  a  change  of  ownership.  The  endorsement 
of  negotiable  instruments  or  the  possesison  of  the  paper,  when 
payable  to  bearer,  shows  for  itself;  but  a  trust,  when  the  subject 
is  personal  property  and  choses  in  action  other  than  negotiable  in- 


ASSIGNMENT     OF     CONTRACT.  497 

struments,  are  not  susceptible  of  actual  possession,  and  equity,  pur- 
suing the  analogy  of  the  law  in  allowing  the  assignment,  requires 
that  the  change  of  ownership  shall  be  shown  by  giving  notice  to 
the  trustee  or  the  person  liable,  which  is  taken  as  tantamount  to 
a  change  of  possession.  Notice  is  necessary  to  perfect  the  assign- 
ment so  as  to  deprive  the  assignor  of  any  subsequent  control. 
Adams  Eq.,  54.  Before  notice  is  given  to  the  trustee  or  person 
liable  the  assignment  is  binding  upon  the  assignor  and  volunteers 
and  all  who  are  affected  with  notice,  but  the  assignment  is  imper- 
fect and  is  put  on  the  footing  of  a  mere  contract  of  purchase. 
After  such  notice  the  title  is  perfect  and  the  assignee  has  a  com- 
plete right  in  rem.     .     .     . 

No  particular  form  of  assignment  required.  An  order  payable  out  of  a 
particular  fund  may  be  an  assignment  either  in  whole  or  in  part ;  so  with  a 
check  for  an  entire  deposit ;  but  a  mere  promise  to  pay  out  of  a  particular 
fund  is  not  an  assignment,  nor  is  a  simple  check  on  a  deposit.  Bispham's 
Eq.,  sec.  167.  Nimocks  v.  Woody,  97—1:  Bank  v.  Bank,  118—783;  Perry  v. 
Bank,  131—117;  Hawes  v.  Blackwell,  107—196;  79— p.  136;  105—11;  Hall  v. 
Jones.  151—419;  Revisal,  2339:  4  Cyc,  29.  37;  2  R.  C.  L.  614,  620. 

Notice  to  the  adverse  party  is  necessary  to  complete  the  assignment  as 
between  him  and  the  assignee,  but  not  between  the  assignor  and  assignee. 
This  notice  must  be  plain,  positive  and  direct  information;  mere  rumor  is 
not  enough.  "Debtors  are  bound  to  seek  their  creditors,  but  they  are  not 
bound  to  search  the  world,  but  may  pay  the  original  creditor,  unless  distinct 
notice  of  the  right  of  the  assignee  is  brought  home."  17— p.  279;  Bispham's 
Equity,  sees.  168,  169.  Something  in  the  note  may  be  notice,  as  a  note  pay- 
able to  guardian.  36—340:  for  further  instances  of  notice,  see  65—175;  94— 
122;  104—589;  109—291;  111—243;  111—516;  114-543;  131—405;  135—428; 
Bisph.  Eq.,  sec.  168;  Chem.  Co.  v.  McNair,  139—326;  Clark  Cont.,  366:  Page 
Cont.,  sees.  1271-1282 ;  4  Cyc,  32 :  2  R.  C.  L.,  622. 

(198)  DAVIDSON  v.  POWELL, 

114  N.  C,  575,  19  S.  E.,  601—1894. 

Civil  action  against  defendants  as  endorsers  of  two  notes  under 
seal.  One  Davis  executed  notes  to  John  A.  Powell  for  $138.90, 
and  he  endorsed  them,  "I  assign  over  the  within  note  to  S.  M. 
Powell ;"  and  S.  M.  Powell  endorsed  them,  "For  value  received  I 
assign  over  the  within  note  to  G.  A.  Davidson."  The  defendants 
claim  that  they  are  not  liable  as  principals,  sureties  or  endorsers, 
and  that  the  transfer  to  plaintiff  was  with  the  understanding  that 
they  were  not  to  be  liable.  There  was  judgment  for  plaintiff,  and 
defendants  appealed. 

MacRae,  T.  The  endorsement  of  a  note,  as  generally  under- 
stood, is  its  transfer  or  assignment  by  writing  upon  its  back,  al- 
though a  negotiable  note  may  be  transferred  without  endorsement. 
If  endorsed  it  may  be,  and  generally  is,  in  blank,  it  having  long 
been  the  practice  for  the  counsel  to  fill  up  the  blank  on  the  trial, 
if  an  action  is  brought  upon  it.     The  blank  may  be  filled  by  the 


498  EFFECT    OF    CONTRACT. 

holder  in  any  way  which  will  not  enlarge  the  liability  of  the  en- 
dorser. The  usual  words  by  which  the  endorser  may  limit  his  lia- 
bility are  "without  recourse;"  and  by  these  or  similar  words  it  is 
at  once  understood  that  the  endorser  is  not  to  be  held  liable  unless 
it  turns  out  that  the  note  is  not  a  valid  obligation  of  those  whose 
names  are  upon  it. 

The  exact  and  legal  meaning  of  the  word  "endorsement,"  as  ap- 
plied to  notes  and  bills,  is  "the  transfer  of  a  negotiable  note  or  bill 
by  the  endorsement  of  some  person  who  has  the  right  to  endorse. 
Nor  can  there  be  an  endorsement  in  this  sense  of  the  word,  except 
by  the  payee  of  the  bill;  but  he  may  be  the  original  payee,  or  he 
may  have  become,  by  previous  endorsement,  a  second  or  subse- 
quent payee."  2  Parsons  Bills  &  N.,  1.  To  assign  is  to  transfer 
to  another.  Abbott's  Law  Dictionary.  A  bill  or  note  may  be  as- 
signed by  delivery,  and  without  endorsement,  in  which  case  his 
liability  is  somewhat  different  from  that  of  an  endorser.  Dan. 
Neg.  Instr.,  sec.  730.  When  assigned  or  transferred  by  endorse- 
ment he  becomes  simply  an  endorser  unless,  by  the  terms  of  the 
assignment,  his  liability  is  limited.  When,  as  in  this  case,  he  uses 
the  words,  "I  assign  over  the  within  note  to  S.  M.  Powell,"  and 
S.  M.  Powell  endorses,  "For  value  received  I  assign  over  the 
within  note  to  G.  A.  Davidson,"  there  is  no  restriction  upon  their 
liability. 

The  effect  of  endorsements,  where  expressions  like  those  used  in 
our  case  are  employed  by  the  endorser,  is  discussed  in  1  Daniel, 
supra  (sec.  688c),  where  he  states  his  conclusion  thus:  "It  is  from 
the  fact  that  a  payee  assigns  a  bill  or  negotiable  note  by  endorse- 
ment of  his  name  on  the  back  of  it  that  the  law  implies  his  liabil- 
ity as  an  endorser.  His  relation  to  the  instrument  creates  the  im- 
plication, and  the  circumstance  that  he  sets  forth  that  relation  in 
express  terms  does  not  change  it,  for  the  maxim  applies,  'Bxpressio 
eorum  quae  tacite  insunt  nihil  operatur!  Did  the  payee  intend 
merely  to  pass  to  title,  he  should  use  the  words  'without  recourse,' 
or  some  phrase  of  equal  import." 

By  section  50  of  The  Code,  "Whenever  any  bill  or  negotiable 
bond  or  promissory  note  shall  be  endorsed,  such  endorsement, 
unless  it  be  otherwise  plainly  expressed  therein,  shall  render  the 
endorser  liable  as  surety  to  any  holder  of  such  bill,  bond  or  prom- 
issory note."  In  the  hands  of  the  original  payee  an  endorsement 
may  be  shown  to  be  upon  certain  conditions  ;  but  a  bona  fide  holder 
for  value  before  maturity  and  without  notice  is  not  affected  by  any 
equities  existing  between  the  original  parties.  The  same  rule  will 
apply  between  the  last  payee  and  all  subsequent  endorsers. 

It  appears  that  the  note  in  question  was  assigned  by  endorse- 
ment of  the  original  payee  to  S.   AT.  Powell  before  maturity  and 


ASSIGNMENT    OF    CONTRACT.  499 

by  him  to  plaintiff  after  maturity.  His  Honor,  therefore,  pre- 
sented an  issue  to  the  jury,  "Was  it  the  understanding  of  the  par- 
ties at  and  before  the  trade  that  the  notes  would  be  endorsed  by 
S.M.Powell  to  plaintiff?"  which  was  answered  in  the  affirmative. 

It  follows  from  what  we  have  said  that  there  was  no  error  in 
the  refusal  of  His  Honor  to  give  the  instructions  asked  by  defend- 
ants. The  effect  of  the  endorsement  was  to  make  the  endorsers 
liable  under  the  statute;  and  if  there  was  a  different  agreement 
between  the  parties  by  which  the  plaintiff  was  bound  the  burden 
was  upon  the  defendants  to  show  it. 

There  is  no  error.  Affirmed. 

A  debt  may  be  verbally  assigned.  Ponton  v.  Griffin,  72 — 362.  A  bond  or 
note  payable  to  A  or  bearer  is  transferable  by  delivery,  but  one  payable  to 
A  or  order,  is  transferable  bv  endorsement  and  deliverv,  to  become  complete. 
Fairley  v.  McLain,  33—158;  Tyson  v.  Joyner,  139—69;  Revisal,  2178-2199. 
Section  50  of  The  Code,  mentioned  in  the  above  case,  has  not  been  carried 
forward  in  the  Revisal,  and  the  liability  of  the  endorser  is  fixed  by  the 
Negotiable  Instr.  Law,  Revisal,  2215;  while  if  not  negotiable,  the  liability 
of  the  assignor  or  other  parties  is  determined  by  the  effect  of  their  agree- 
ment.   Johnson  v.  Lassiter,  155 — 47;  Barden  v.  Hornthal,  151 — 8. 

An  endorsement  to  a  person  deceased  is  a  nullity.  63 — 475.  A  chattel 
mortgage  may  be  assigned  with  or  without  seal,  and  assignment  need  not  be 
registered.  Hodges  v.  Williamson,  111 — 56.  A  qualified  endorsement  may 
be  shown  by  parol  evidence  between  the  immediate  parties,  but  not  as  to 
remote  parties.     Bank  v.  Pegram,  118 — 671;   Sykes  v.  Everett,   167 — 600. 

5.    EFFECT   OF   ASSIGNMENT. 

(199)   KING  v.  LINDSAY, 
38  N.  C,  77—1843. 

Appeal  from  interlocutory  order  of  court  of  equity.  On  Feb- 
ruary 21,  1840,  the  defendant,  Lindsay,  contracted  to  sell  the 
plaintiff  400  bushels  of  corn,  to  be  delivered  next  day,  for  1,280 
pounds  of  bacon,  to  be  delivered  on  the  15th  of  April  following. 
They  executed  separate  covenants  to  each  other  for  the  perform- 
ance of  this  agreement,  and  Lindsay  gave  the  plaintiff  a  letter  to  a 
person  in  whose  care  he  said  the  corn  was.  Lindsay  then  went  to 
another  county,  and  there  assigned  the  plaintiff's  covenant  to  one 
Black,  a  defendant,  in  satisfaction  of  a  debt  of  $75  and  for  the 
further  sum  of  $55.  Lindsay's  agent  did  not  deliver  the  corn  to 
the  plaintiff,  but  said  it  had  been  seized  under  attachments,  and 
Lindsay  left  the  country.  Black,  the  assignee,  sued  plaintiff  on  his 
covenant  for  the  bacon  and  recovered  judgment,  and  this  suit  is 
brought  for  an  injunction  against  enforcing  said  judgment.  Black 
alleges  that  plaintiff  got  some  corn,  and  that  he  is  a  purchaser  for 
value  and  without  notice  of  the  plaintiff's  right  against  Lindsay. 

The  court  issued  the  injunction  and  continued  it  to  the  hearing, 
and  the  defendant,  Black,  appealed. 


500  EFFECT    OF    CONTRACT. 

RuFFin,  C.  J.  In  the  view  of  this  court  the  two  covenants 
growing  out  of  the  same  contract  and  executed  at  one  and  the 
same  time,  are  to  be  taken  together  and  regarded  as  one  instru- 
ment; and  although  at  law,  from  the  forms  of  pleading,  the  pres- 
ent plaintiff  could  not  avail  himself  of  the  default  of  Lindsay  in 
not  performing  the  agreement  on  his  part,  but  was  obliged  to  sub- 
mit to  a  judgment  for  the  value  of  the  articles,  which  he  con- 
tracted to  deliver,  yet  there  is  no  principle  of  equity  better  settled 
than  that  a  person  shall  not  insist  upon  the  execution  of  a  contract 
by  another,  when  he,  himself,  has  failed  and  is  unable  to  fulfill  the 
stipulations  on  his  part,  which  formed  the  inducement  to  the  other 
party  to  enter  into  the  contract.  It  is  a  case  in  which  the  consid- 
eration wholly  fails ;  but  as  that  can  not  be  shown  at  law,  when 
the  contract  is  in  the  form  of  independent  covenants  in  separate 
instruments,  the  plaintiff  is  under  the  necessity  of  coming  here  to 
restrain  the  other  party  from  the  unconscientious  use  of  that  legal 
advantage.  There  is  a  clear  equity  in  favor  of  the  plaintiff  against 
Lindsay,  who  can  not  be  allowed  to  make  the  plaintiff  pay  for 
what  he  never  got  and  can  not  get.  That  equity,  indeed,  was  but 
feebly  questioned  at  the  bar ;  but  the  case  was  put  on  another  point. 

It  was  said  that  an  equal  or  superior  equity  arises  in  favor  of 
the  other  defendant,  Black,  as  a  purchaser  for  value  and  without 
notice  of  the  plaintiff's  equity.  But  that  is  contrary  to  settled 
principles.  For  the  advantage  of  trade  and  the  credit  of  nego- 
tiable paper,  the  assignee  of  such  instruments,  before  their  dis- 
honor, held  them  as  absolute  owners  both  at  law  and  in  equity, 
without  any  regard  to  the  state  of  the  dealings  between  the  original 
parties,  unless  the  assignee  have  notice  that  his  assignor  ought  not 
to  pass  off  the  paper.  That  is  by  force  of  the  law  merchant,  or 
the  statutes  which  authorize  and  encourage  the  negotiation  of  those 
instruments,  and  consequently  should  protect  those  who  innocently 
take  them.  But  for  that  reason  it  is  clear  that  an  assignee  could 
have  only  the  rights  of  the  assignor;  since  the  latter  can  pass  no 
more  than  he  has.  And  such,  therefore,  is  the  rule  of  equity  in 
respect  to  the  assignment  of  choses  in  action  or  instruments  not 
legally  negotiable.  The  rule  has  been  often  laid  down  and  never 
disputed.  In  Coles  v.  Jones,  2  Ver.,  692,  it  is  said  that  the  as- 
signee, though  he  comes  in  upon  full  and  valuable  consideration, 
takes  a  bond  (not  negotiable)  subject  to  the  same  equity,  as  it 
was  in  the  obligee's  hands.  In  Taston  v.  Benson,  2  Vern.,  764, 
it  is  again  said  that  the  assignment  to  the  creditors  did  not  alter 
the  case ;  a  bond,  being  assignable  only  in  equity,  is  still  liable  to 
and  attended  with  the  same  equity,  as  if  remaining  with  the 
obligee.  And  in  the  same  case,  as  reported  in  1  Pr.  Wms.,  496, 
the  doctrine  and  the  reasons  for  it  are  yet  more  fully  stated.     It 


ASSIGNMENT    OF    CONTRACT.  501 

is  there  declared  that  the  assignee  is  in  no  better  condition  than 
the  assignor;  for  suppose  one  should  assign  over  a  satisfied  bond 
as  security  for  a  just  debt,  the  assignee  could  not  set  it  up  in 
equity,  as  it  receives  no  new  force  from  the  assignment.     And  it 
was  laid  down  that  it  was  incumbent  on  anyone,  who  took  an  as- 
signment of  a  bond,  to  be  informed  by  the  obligor  concerning  the 
quantum  due  upon  it;  which,  if  he  neglected  to  do,  it  was  his  own 
fault,  and  he  should  not  take  any  advantage  of  his  own  laches. 
In  truth,   the  assignee  of   a   chose  in  action  gets   no  title   to   it, 
properly  speaking,  and  can  not  be  said  to  be  a  purchaser  without 
notice.     He  gets  only  the  right  to  use  the  assignor's  name  to  en- 
force the  claim,  and  therefore  to  recover  what  the  assignor  might; 
and  the  very  nature  of  the  subject  warns  him  of  the  necessity  of 
inquiring  respecting  the  obligor's  equity,  and,  therefore,  amounts 
to  notice  of  such  equity.     If,  upon  inquiry,  the  obligor  misinform 
him,  or  if  the  obligor  acquiesce  in  the  assignment,  and  delay  for  a 
long  time  to  bring  forward  his  equity,  such  conduct  might  vary  the 
rule,    and   give   the   assignee    rights,    which    the   assignment    itself 
would  not.     The  general  principle  has  also  been  long  recognized 
in  this  State;  Welch  v.  Watkins,  2  N.  C,  369,  and  was  recently 
acted  on  by  this  court  in  Moody  v.  Sitton,  37  N.  C,  381.     The 
present  plaintiff  has  by  no  conduct  of  his  impaired  his  equity,  as 
between  him  and  Black;  and,  therefore,  the  latter  stands  merely 
in  the  place  of  Lindsay,  and  the  plaintiff  has  the  right  to  have  de- 
ducted from  the  judgment  against  him  the  value  of  such  part  of 
the  corn  as  he  did  not  receive  and  interest  thereon.     What  that 
was  will,  of  course,  be  the  subject  of  inquiry  in  a  future  stage 
of  the  cause,  and  in  the  meantime  the  injunction  was  properly 
continued. 

It  will,  therefore  be  certified  to  the  court  of  equity  that  there  is 
no  error  in  the  decree  appealed  from ;  and  the  appellant  must  pay 
the  costs  of  this  court. 

Per  Curiam.  Ordered  accordingly. 

Under  the  present  practice  the  action  must  be  brought  by  the  assignee  in 
his  own  name,  and  everything  can  be  adjusted  in  one  action.  Vaughan  v. 
Davenport,  157—156,  159—369;  Stewart  v.  Price,  64  Kan.,  191,  64  L.  R. 
A.,  581. 

(200)   MILLER  v.  THAREL, 

75  N.  C,  148—1876. 

Civil  action  on  a  bond.  In  May,  1872,  the  defendant  sold  to  one 
Houston  a  tract  of  land  for  $1,600,  receiving  $300  in  cash  and 
Houston's  note  for  $1,300.  Later  he  repurchased  from  Houston 
at  $1,800,  giving  his  note  for  that  amount,  taking  a  bond  for  title, 
and  surrendering  Houston's  note  for  $1,300  which  was  to  be  cred- 


502  EFFECT    OF    CONTRACT. 

ited  on  the  $1,800  note.  In  about  two  weeks  they  rescinded  this 
contract,  the  defendant  surrendering  the  bond  for  title,  and  Hous- 
ton giving  up,  as  was  supposed,  the  defendant's  note,  which  was  at 
once  destroyed.  Afterwards,  and  before  maturity  of  the  note, 
Houston  transferred  the  defendant's  note  to  the  plaintiff  in  ex- 
change for  certain  notes  which  plaintiff  had  against  him  as  collat- 
eral security;  and  before  the  transfer  Houston  changed  the  credit 
from  $1,300  to  $130.  The  plaintiff  had  no  notice  of  such  defects, 
and  took  the  note  for  value.  There  was  a  judgment  against  the 
defendant  for  $570,  and  he  appealed. 

Rodman,  J.  When  the  contract  for  the  sale  of  land  from  Hous- 
ton to  Tharel  was  rescinded,  and  Tharel  gave  up  to  Houston  the 
bond  for  title  which  Houston  had  made  to  him,  and  received  from 
Houston  a  paper  which  Houston  said  and  Tharel  believed  was  the 
note  now  sued  on,  and  Tharel  destroyed  that  paper,  the  liability  of 
Tharel  on  the  note  was  as  much  discharged  as  if  he  had  paid  it  in 
money.  The  case  is  the  same  in  effect  as  if  he  had  received  the 
note  and  put  it  in  his  pocket,  from  which  it  was  afterwards  stolen, 
and  the  same  as  if  he  had  received  and  torn  it  in  pieces  and 
thrown  them  away,  and  the  pieces  had  been  afterwards  picked  up 
and  so  artfully  put  together  that  the  tearing  could  not  be  detected. 
It  must  be  concluded  that  at  that  time  he  was  under  no  legal  or 
equitable  liability  by  virtue  of  the  note  to  anyone. 

It  then  only  remains  to  consider  whether  such  liability  subse- 
quently arose,  by  reason  of  the  transfer  of  the  note  by  Houston  to 
the  plaintiff,  under  the  circumstances  stated  in  the  case.  The  note 
was  under  seal  and  was  payable  to  Houston  or  bearer.  Notwith- 
standing this,  it  is  to  be  regarded,  so  far  as  its  negotiability  is  con- 
cerned, and  its  liability  to  be  governed  by  the  commercial  law  ap- 
plicable to  promissory  notes,  as  if  it  were  a  promissory  note  [not] 
under  a  seal,  and  payable  to  a  payee  or  order.  The  Act  of  As- 
sembly, Rev.  Code,  chap.  13,  sec.  1  (Bat.  Rev.,  chap.  10,  sec.  1), 
enacts  in  substance :  "All  notes  signed  by  any  person 
whereby  such  person  .  .  .  shall  promise  to  pay  any  person  .  .  . 
the  money  mentioned  in  such  note,  shall  be  considered  to  be  by 
virtue  thereof  due  and  payable  to  such  person  ...  to  whom 
the  same  is  made  payable,  and  the  person  ...  to  whom  such 
money  is  payable  may  maintain  an  action  for  the  same  as  they 
might  upon  inland  bills  of  exchange ;  and  the  same  as  likewise  all 
bonds,  bills  and  notes  for  money,  with  or  without  seal,  and  ex- 
pressed or  not  to  be  payable  to  order,  or  for  value  received,  may 
be  assignable  over  in  like  manner  as  inland  bills  of  exchange  are 
by  the  custom  of  merchants  in  England;  and  the  person  ...  to 
whom  such  promissory  note,  bill,  bond  or  sealed  note  is  assigned 
or  endorsed  may   maintain   an   action   against  the  person 


ASSIGNMENT    OF    CONTRACT.  503 

who  shall  have  signed  such  promissory  note,  etc.,  or  any  who  shall 
have  endorsed  the  same,  as  in  cases  of  inland  bills  of  exchange: 
Provided,  etc. 

It  is  conceded  that  Houston  transferred  the  note  to  the  plaintiff 
for   a   valuable  consideration   before   its   maturity,   in   the   regular 
course  of  business,   and   without  actual   notice,  or  anything   from 
which  notice  would  be  implied,  of  any  defense  to  it.     If  Houston 
had  endorsed  the  note  to  the  plaintiff  at  the  time  of  such  transfer 
he  would  thereby  have  passed  the  legal  title  according  to  the  law 
merchant,  and  the  plaintiff's  right  would  probably  have  been  good 
against  the  maker  by  whose  misfortune  or  negligence  it  had  been 
permitted  to  remain  in  the  hands  of  the  payee  after  it  had  been 
paid.     We  say  probably,  because  it  is  not  necessary  to  decide  the 
question.     The  note  sued  on  was  not  endorsed  to  the  plaintiff,  but 
was  assigned  to  him  by  an  oral  contract.    It  is  true  that  under  this 
assignment,  by  virtue  of  our  recent  legislation  (C.  C.  P.,  sec.  55), 
the  assignee  may  sue  in  our  courts  in  his  own  name,  as  an  equita- 
ble assignee  or  cestui  que  trust  could  formerly  have  done  in  equity ; 
but  he  does  not  acquire  by  such  assignment  the  peculiar  rights  by 
which  the  law  merchant  founded  on  the  policy  of  promoting  the 
circulation  of  promissory  notes,  attached  to  the  endorsee  of  such 
paper.     All  the  authorities  from  Parsons  on  Bills  and  Notes,  cited 
by  the  learned  counsel  for  the  plaintiff,  to  sustain  the  proposition 
that  a  holder  of  a  promissory  note,  taken  under  the  circumstances 
stated,  can  recover  against  the  maker,  notwithstanding  any  equita- 
ble or  other  defense,   such   as   payment  before  maturity,  he  may 
have,   apply   only   to   holders   who   hold   by   an   assignment   recog- 
nized by  the  law  merchant,  viz.,  an  endorsee.     The  distinction  be- 
tween a  title  by  assignment  and  by  endorsement  is  stated,  but  not 
as  clearly  as  it  might  be,  in  2  Pars.  Notes  and  Bills,  526.     It  is 
also  made  in  Thigpen  v.  Home,  36  N.  C,  20;  Lindsay  v.  Wilson, 
22  N.  C,  85. 

The  case  of  Whistler  v.  Forster,  14  C.  B.,  248  (108  E.  C.  L. 
R.),  which  probably  escaped  the  attention  of  Mr.  Parsons,  is  in 
point  and  is  decisive  of  the  question.  The  defendant  drew  the 
check  sued  on  before  the  3d  day  of  October,  and  handed  it  to 
Griffiths  without  any  other  consideration  than  a  promise  to  furnish 
funds  to  take  it  up,  which  he  failed  to  perform.  On  the  3d  of 
October  Griffiths  gave  the  check  to  plaintiff  for  value,  but  did  not 
then  endorse  it.  Afterwards  he  did.  At  the  time  the  plaintiff  re- 
ceived the  check  he  had  no  notice  of  the  way  in  which  Griffiths 
had  obtained  it,  but  at  the  time  of  the  endorsement  he  had.  The 
judgment  was  for  the  defendant.  The  observations  of  Willis,  J., 
are  so  clear  that  I  extract  from  them : 

"The  general  rule  of  law  is  undoubted  that  no  one  can  transfer 


504  EFFECT   OE    CONTRACT. 

a  better  title  than  he  himself  possesses.  Nemo  dat  quod  non  habet. 
To  this  there  are  some  exceptions ;  one  of  which  arises  out  of  the 
law  merchant  as  to  negotiable  instruments.  .  .  .  This  rule, 
however,  is  only  intended  to  favor  transfers  in  the  ordinary  and 
usual  manner  whereby  a  title  is  acquired  according  to  the  law 
merchant  and  not  to  a  transfer  which  is  valid  in  equity  according 
to  the  doctrine  respecting  the  assignment  of  choses  in  action,  now 
indeed  recognized,  and  in  many  instances  enforced  by  courts  of 
law ;  and  it  is,  therefore,  clear  that  in  order  to  acquire  the  benefit 
of  this  rule  the  holder  of  the  bill  must,  if  it  be  payable  to  order, 
obtain  an  endorsement,  and  that  he  is  affected  by  notice  of  fraud 
received  before  he  does  so.  Until  he  does  so  he  is  merely  in  the 
position  of  the  assignee  of  an  ordinary  chose  in  action,  and  has 
no  better  right  than  his  assignor."  To  the  same  effect  is  Haskill 
v.  Mitchell,  53  Me.,  468. 

The  right  of  the  plaintiff  to  recover,  if  it  has  any  foundation  at 
all,  must  stand  not  on  his  having  the  legal  title,  or  any  principle 
of  mercantile  law,  but  on  his  having  some  equity  which  makes  it 
unconscientious  in  the  defendant  to  refuse  payment.  It  is  said 
that  such  an  equity  arises  out  of  the  fact  that  the  defendant,  by 
his  negligence,  permitted  the  note  to  exist  and  to  remain  in  the 
hands  of  Houston  after  it  had  been  discharged  by  payment,  and 
thus  enabled  Houston  to  commit  a  fraud  on  the  plaintiff ;  and  that 
the  maxim  applies  that  where  one  of  two  innocent  persons  must 
suffer  by  the  fraud  of  another,  he  must  be  the  victim  whose  negli- 
gence enabled  that  other  to  commit  the  fraud.  The  rule  is  not  dis- 
puted, but  probably  it  will  be  found  to  be  confined  in  its  applica- 
tion to  cases  in  which  the  defendant  is  guilty  of  some  complicity 
in  the  fraud,  or  where  by  his  negligence,  he  has  enabled  the  person 
committing  the  fraud  to  pass  a  legal  right  to  the  plaintiff.  In  this 
last  case  the  maxim  would  apply  that  where  equities  are  equal  the 
legal  title  will  prevail.  But  where  no  legal  title  passed  the  case 
would  come  under  the  maxim  that  where  the  equities  are  equal 
the  prior  equity  prevails.  The  authorities  to  this  effect  are  very 
numerous.  Tn  Turton  v.  Benson,  1  Pr.  Wms.,  496,  the  payee  of 
an  unnegotiable  bond  assigned  it  to  one  of  his  creditors  as  a  se- 
curity, and  it  was  held  that  the  maker  could  avail  himself  of  an 
equitable  defense.  The  Master  of  the  Rolls  said :  "Supposing  a 
man  should  assign  over  a  satisfied  bond,  the  assignee  could  not  set 
up  this  bond  in  equity,  which  being  satisfied  before,  could  receive 
mi  new  force  from  the  assignment."  On  appeal  Lord  Chancellor 
Parker  considered  all  the  arguments  which  could  be  used  by  the 
plaintif]  in  ibis  case,  considering  him  as  a  mere  assignee,  and  con- 
firmed  the  decree. 

Sec  2  vol.,  2  part.    Leading  Cases   in  Eq. ;   Note  to  Royall  v. 


ASSIGNMENT    OF    CONTRACT.  505 

Rowles,  218—36;  Moody  v.  Sutton,  37  N.  C,  382;  King  v.  Lind- 
say, 38  N.  C,  77;  Hosteller    v.  Bost,  42  N.  C,  39. 

We  think  there  was  error  in  the  judgment  below. 

Per  Curiam.  Judgment  reversed,  and  judgment  that  defendant 
go  without  day  and  recover  his  costs  in  this  court. 

(201)  LEWIS  v.  LONG, 

102  N.  C,  206,  9  S.  E.,  637,  11  A.  S.  R.,  725—1889. 

Civil  action  on  a  note  under  seal,  executed  by  Aaron  Prescott 
and  W.  W.  Long  to  J.  W.  Grizzard,  and  endorsed  by  him  to  Mrs. 
Cooper,  for  value  before  maturity  and  without  notice  of  any  equity, 
and  by  her  endorsed  to  plaintiff  for  value,  after  maturity  and  with- 
out notice.  Long  was  only  surety  on  the  note,  and  this  was  known 
to  Grizzard,  but  not  to  Mrs.  Cooper  nor  to  plaintiff.  More  than 
three  years  had  elapsed  since  the  maturity  of  the  note,  and  Long 
relied  upon  this  as  a  defense.  There  was  a  judgment  against  Long 
before  a  justice  of  the  peace,  and  he  appealed  to  the  Superior 
Court,  where  judgment  was  rendered  in  favor  of  Long,  and  the 
plaintiff  appealed. 

Shepherd,  J.  Whether  a  joint  promisor  may  show  by  parol 
that  he  signed  only  as  surety,  has  been  the  subject  of  conflicting 
decisions,  both  in  England  and  America.  That  he  can  do  so  in 
this  State,  where  the  payee  has  notice,  is  well  settled.  Capell  v. 
Long,  84  N.  C,  17;  Goodman  v.  Litaker,  84  N.  C,  8;  Welfare  v. 
Thompson,  83  N.  C,  276. 

But  such  a  defense  can  not  be  made  against  a  bona  fide  holder 
without  notice.  Randolph  Com.  Paper,  sec.  907 ;  Daniel  Neg.  Inst., 
sec.  1338;  Edwards  Bills  and  Notes,  vol.  2,  692;  Goodman  v. 
Litaker,  supra. 

The  note  sued  upon  was  under  seal,  but  was  endorsed,  and  is 
"to  be  regarded,  so  far  as  its  negotiability  is  concerned,  and  its  lia- 
bility to  be  governed  by  the  commercial  law  applicable  to  promis- 
sory notes,  as  if  it  were  a  promissory  note  not  under  seal."  Miller 
v.  Tharel,  75  N.  C,  150;  Spence  v.  Tapscot,  93  N.  C,  246. 

It  was  endorsed  to  Mrs.  Cooper,  and  the  law  presumes  that  she 
took  it  "for  value  and  before  dishonor,  in  the  regular  course  of 
business."     Tredwell  v.  Blount,  86  N.  C,  33. 

Mrs.  Cooper  being  a  bona  fide  holder,  and,  having  no  notice, 
would  have  been  unaffected  by  the  defense  relied  upon  in  this  ac- 
tion. Does  the  fact  that  the  plaintiff  purchased  from  her  after 
maturity  (but  without  notice)  put  him  in  a  worse  position  than 
that  occupied  by  his  assignor?  Very  clearly  it  does  not.  Mr.  Ran- 
dolph (supra),  sec.  987,  says:  "So  a  purchaser  after  maturity 
from  a  bona  fide  holder,  who  took  the  paper  for  value,  before  ma- 


506  EFFECT   OF    CONTRACT. 

turity,  is  entitled  as  a  bona  fide  holder,  before  maturity,  to  the 
rights  of  his  endorser." 

To  the  same  effect  is  Edwards,  supra,  vol.  2,  692,  note;  Daniel, 
supra,  sec.  695. 

The  cases  of  Harris  v.  Burwell,  65  N.  C,  586,  and  Capell  v. 
Long,  supra,  cited  by  the  defendants,  do  not  conflict  with  this 
view.  In  the  former  case  the  plaintiff  purchased  the  note  after 
maturity,  and,  therefore,  took  it  subject  to  the  defense  of  "set- 
off,'' which  the  maker  had  against  his  assignor  at  the  time  of  the 
assignment.  In  Capell's  case  the  payee  had  notice,  and  assigned 
after  maturity.  In  both  of  these  cases  it  was  held  that  the  pur- 
chaser took  subject  to  any  defense  which  existed  against  their  as- 
signors. In  our  case,  as  we  have  seen,  no  defense  existed  against 
Mrs.  Cooper,  the  plaintiff's  assignor,  and  it  is,  therefore,  clearly 
distinguishable. 

Error.  Reversed. 

(202)   HARRIS  v.  BURWELL, 

65  N.  C,  584—1871. 

The  defendant  executed  a  note  to  one  Merryman,  payable  on 
December  25,  1866;  on  December  1,  1866,  Merryman  endorsed  the 
note  for  value  to  Hughes ;  the  defendant  paid  Hughes  $280,  which 
with  a  debt  due  from  Hughes  to  defendant  was  more  than  the 
amount  of  the  note;  on  May  7,  1867,  Hughes  endorsed  the  note 
for  value  to  the  plaintiff ;  the  defendant  set  up  the  debt  of  Hughes 
as  a  setoff  against  the  plaintiff.  There  was  a  judgment  for  the 
plaintiff,  and  defendant  appealed. 

Pearson,  C.  J.  The  case  presents  the  question  whether  a  note 
assigned  after  maturity  is  subject  in  the  hands  of  the  assignee  to 
any  setoff  or  other  defense  existing  at  the  time  of  the  assignment, 
against  the  assignor.  In  Neal  v.  Lea,  64  N.  C,  678,  it  is  held 
that  by  the  proper  construction  of  C.  C.  P.,  sec.  101,  no  collateral 
demand  against  the  assignor  can  be  set  up  against  the  assignee, 
and  "that  to  make  it  available,  the  demand  must  have  attached 
itself  to  the  note  in  the  hands  of  the  assignor;  for  instance,  a 
payment  made  to  him  not  entered  on  the  note,  or  a  claim,  which 
the  assignor  had  agreed  should  be  taken  in  satisfaction ;"  and  for 
reasons  therein  set  forth,  this  court  adopts  the  principle  of  Bor- 
ough v.  Moss,  10  B.  &  C,  558  (21  E.  C.  L..  128),  which  had  been 
departed  from  by  Haywood  v.  McNair,  19  N.  C,  283. 

Sec.  55,  C.  C.  P.,  was  not  called  to  the  attention  of  the  court 
upon  the  argument,  or  the  consideration  of  Neal  v.  Lea,  and  was 
cited  for  the  first  time  upon  the  argument  of  this  case  at  the  last 
term  ;  we  find  that  section  has  a  most  important  bearing  upon  the 


ASSIGNMENT    OF    CONTRACT.  507 

question,  and  is  expressed  in  words  so  plain  and  direct  as  to  con- 
trol the  construction  of  sec.  101,  for  it  abrogates  the  principle 
of  the  common  law,  that  a  chose  in  action  can  not  be  assigned; 
confers  an  unlimited  right  to  assign  "anything  in  action,"  arising 
out  of  contract,  and  subjects  the  assignee  to  any  setoff  or  other 
defense  existing  at  the  time  of  or  before  notice  of  the  assignment. 
The  only  saving  being  in  regard  to  "negotiable  promissory  notes 
and  bills  of  exchange,  transferred  in  good  faith,  and  upon  good 
consideration  before  due."  This  language  is  as  broad  as  it  can 
well  be ;  so  that  a  note  assigned  after  it  is  due,  a  half  dozen  times, 
will  be  subject  to  any  setoff  or  other  defense  that  the  maker  had 
against  any  one  or  all  of  the  assignees  at  the  date  of  the  assign- 
ment, or  before  notice  thereof.  The  effect  will  be  to  put  a  very 
effectual  check  to  the  trading  of  notes  after  maturity,  and  to  put 
it  in  the  power  of  debtors  to  buy  up  claims  against  their  creditors 
and  take  the  control  entirely  in  their  own  hands.  Whether  this 
be  good  or  bad  policy  is  a  matter  with  which  the  courts  have  no 
concern — "it  is  ours"  to  expound  the  law,  not  to  make  it,  and  al- 
though not  very  pleasant,  it  is  our  duty  to  correct  any  misappre- 
hension into  which  we  fall,  and  to  do  so  in  plain  and  direct  terms, 
and  as  soon  as  may  be  after  becoming  satisfied  of  the  error  in 
order  to  avoid  the  inconvenience  that  might  otherwise  result.  Neal 
v.  Lea  is  overruled.  .  .  .  The  judgment  of  the  Superior  Court 
is  reversed. 

Assignment. — The  assignee  of  an  ordinary  chose  in  action  gets  only- 
such  interest  as  his  assignor  had  at  the  time  of  assignment,  or  when  the 
adverse  party  had  notice  of  the  assignment.  37 — 382  ;  65 — 382  ;  70 — 283  ; 
84 — 552 ;  86 — 31 ;  3  Page  Cont.,  sec.  1269.  There  is  a  conflict  of  opinion  in 
regard  to  the  equities  of  intermediate  assignees.  Martin  v.  Richardson,  68 — 
255 ;  Adrian  v.  McCaskill.  103—182 ;  French  v.  Barnev,  23—219 ;  3  Page  Cont., 
sec.  1271;  46  L.  R.  A.,  753;  25  Am.  &  Eng.  Encyc,  532;  Bisph.  Eq.,  sees. 
168-171  ;  4  Cyc,  91  ;  Vann  v.  Marbury,  100  Ala.,  438,  14  So.,  273,  23  L.  R. 
A.,  325 ;  Bills  and  Notes,  Cent.  Dig.,  sec.  1355 ;  Cumberland  Bank  v.  Hann, 
18  N.  J.  L„  222 ;  Revisal,  400.  An  increase  in  the  contract  price  of  railroad 
ties  goes  to  the  assignee,  50 — 111;  but  the  assignment  of  a  judgment,  which 
had  not  been  properly  docketed  and  thereby  lost  its  lien,  does  not  entitle  the 
assignee  to  sue  the  clerk  for  such  failure,  though  this  right  might  have  been 
assigned.     Redmond   v.   Staton,   116 — 140. 

Endorsee  for  value,  before  maturity  and  without  notice,  takes  free  from 
all  equities  that  the  maker  or  any  one  claiming  under  him  might  have  against 
the  payee.  Lawrence  v.  Weeks,  107 — 119:  except  (1)  where  the  paper  is  void 
by  statute :  (2)  where  the  original  consideration  is  illegal  or  fraudulent,  or 
it  is  taken  as  collateral,  the  right  of  recovery  is  restricted  to  the  considera- 
tion actually  paid  before  notice.  Bank  v.  McXair,  116 — 156.  A  note  payable 
on  demand  is  dishonored  unless  presented  within  a  reasonable  time.  19 — 
338;  44 — 40.  If  endorsee  has  notice,  he  takes  subject  to  equities.  Hurlburt 
v.  Douglass,  94—122;  Bank  v.  Hatcher,  151—359;  Smathers  v.  Hotel  Co.,  162 
—346;  Revisal,  2205. 

The  endorsement  of  a  negotiable  instrument  transfers  title  and  implies 
CI)  that  the  note  is  genuine  and  valid;  (2)  that  the  amount  specified  is  due. 
79— p.  170;  2  Pars.  Bills,  26  to  29;  1  Dan.  Neg.  Instr.,  sec.  669;  Revisal,  2214, 
2215.    Liability  of  endorser,  15 — 122.     Endorsement  in  blank  is  presumed  to 


508  EFFECT    OF    CONTRACT. 

be  a  transfer,  but  may  be  shown  to  be  a  receipt.  64 — 570.  Name  of  payee 
stamped  on  a  note  may  be  an  endorsement,  but  it  does  not  prove  itself.  139 — 
69;  140—640. 

For  value  means  for  a  fair  and  reasonable  price,  20 — 420;  76 — 82;  132 — ■ 
109;  137 — 317.  Execution  and  endorsement  admitted  or  proved,  it  is  pre- 
sumed to  be  for  value,  and  possession  and  production  of  the  paper  makes  a 
prima  facie  case.  36 — p.  453;  86 — 33;  105 — 407;  but  when  fraud  is  shown, 
the  endorsee  must  show  that  he  is  a  bona  fide  holder  for  value  and  without 
notice.  108—63;  110—267;  116—122;  115—335;  113—481;  Revisal,  2208.  A 
collecting  bank  is  not  a  purchaser  for  value.  113 — 485;  114 — 335;  114 — 343; 
118—548;  118—566;  Bank  v.  Oil  Mills,  150—718;  whether  a  preexisting  debt 
is  a  sufficient  consideration  to  constitute  a  purchaser  for  value,  so  as  to  take 
discharged  for  defenses,  is  regulated  by  Revisal,  2173;  Brooks  v.  Sullivan, 
129—190;  Smathers  v.  Hotel,  162—346;  Bank  v.  Seagroves,  166—608;  R.  R. 
Co.  v.  Bank,  102  U.  S.,  14. 

A  qualified  endorsement  may  be  shown  as  between  the  immediate  parties, 
but  not  as  to  remote  holders.  118 — 671.  A  note  endorsed  by  one  not  named 
in  the  note,  the  liability  is  presumed  to  be  that  of  an  endorser.  Revisal, 
2345;  Lilly  v.  Baker,  88—151;  Hoffman  v.  Moore,  82—313;  Barden  v.  Horn- 
thai,  151 — 8.  A  holder  with  notice  taking  from  one  without  notice  is  pro- 
tected, but  a  surety  may  notify  the  holder  that  he  is  a  surety  and  take 
advantage  of  the  statute  of  limitations,  if  suit  is  not  brought  within  three 
years  thereafter.     Coffey  v.  Reinhart,  114 — 506. 

A  note  endorsed  after  maturity  or  assigned  without  endorsement,  unless 
pavable  to  bearer,  is  subject  to  the  equities  of  the  maker  against  the  payee. 
2—273;  19—283;  28—107;  33—331;  33—505;  42—39;  50—360;  86—49;  127 — 
464.  The  same  is  true  of  a  note  under  seal.  Formerly  they  could  not  be 
made  payable  to  bearer,  but  after  endorsement  they  were  like  other  negotiable 
paper.  Marsh  v.  Brooks,  33 — 409;  Pate  v.  Brown,  85 — 166;  Spence  v.  Tap- 
scott,  93 — 246;  Christian  v.  Parrott,  114 — 215;  if  transferred  without  en- 
dorsement, or  endorsed  by  one  without  authority,  it  is  subject  to  equities. 
Spence  v.  Smith,  101 — 234 ;  Bresee  v.  Crumpton,  121 — 122.  It  seems  that  a 
bond  as  negotiable  paper  is  now  like  a  promissory  note  so  far  as  assignment 
is  concerned.  Revisal,  2155.  A  strictly  personal  agreement  does  not  bind 
the  assignee,  as  where  the  assignor  hired  a  slave  upon  condition  that  he  was 
not  to  be  used  in  a  certain  way,  33 — 421 ;  a  note  which  is  part  of  the  assign- 
or's personal  property  exemption,  loses  that  quality  by  assignment,  104 — 642  ; 
A  contracted  to  sell  land  to  B  and  took  notes  for  the  purchase  money ;  he 
then  conveyed  the  land  to  C  and  assigned  the  notes  to  him ;  C  could  enforce 
payment,  78 — 37.  When  a  draft  with  a  bill  of  lading  attached  as  security 
is  discounted  in  due  course,  the  holder  has  an  interest  in  the  property  to  the 
amouhPof  his  claim,  and  is  not  liable  to  the  consignee  for  any  breach  of 
warranty  between  the  original  parties.  Mason  v.  Cotton  Co.,  148 — 492,  18 
L.  R.  A.  (N.  S.),  1221;  overruling  Finch  v.  Gregg,  126—176,  49  L.  R.  A., 
679;  nor  can  the  assignee  retain  the  price  of  such  goods  against  such  assignee 
for  any  debt  due  him  by  the  consignor.  Manfg.  Co.  v.  Tierney,  133 — 631 ; 
also  Haas  v.  Cit.  Bank,  144  Ala.,  562,  39  So.,  129,  1  L.  R.  A.  (N.  S.), 
242:  Cosmos  Cot.  Co.  v.  First  Xat.  Bank,  171  Ala.,  392,  54  So.,  621,  32  L. 
R.  A.  (X,  S. ).  1173;  Springs  v.  Hanover  Nat.  Bank,  209  N.  Y.,  224,  103  N. 
1    .  156,  52  I..  R.  A.   (X.  S.),  241. 

Possession  of  unendorsed  note  raises  presumption  of  ownership  as  between 
the  holder  and  maker,  but  not  between  the  holder  and  pavee,  Jackson  v.  Love, 
82—401;  Holly  v.  Holly,  94—670;  87—191;  116—64;  121—122;  132—68;  nor 
when  a  relation  of  trust  or  agency  exists.  116 — 616.  But  the  mere  introduc- 
tion of  a  note  with  endorsement  is  not  sufficient  evidence  to  vest  the  title  and 
defeat  equities.  139—69.  Possession  of  an  open  account  is  no  evidence  of 
title.  Ill — 74:  a  mere  holder  of  an  insurance  policy  has  no  interest  in  it. 
127 — 138;  but  a  transfer  by  the  president,  though  not  in  the  form  required, 
is   valid.     134-   60. 

Assignment  of  a  note  and  mortgage  to  a  third  person  does  not  vest  the 
title   to   the   property   nor   the   power   of    sale   in   the   assignee.      Williams    v. 


ASSIGNMENT    OF    CONTRACT.  509 

Teacher,  85—402;  Dameron  v.  Eskridge,  104—601;  Hussey  v.  Hill,  120— 
312;  Burris  v.  Brooks,  118—789;  Xorman  v.  Halsey,  132—6;  Collins  v.  Da\b, 
133 — 106;  but  a  transfer  even  by  delivery  without  endorsement  carries  with 
it  the  security.  41—269;  63—624;  Jenkins  v.  W'ilkins,  113—532;  129—67. 
The  assignment  of  the  mortgage  without  the  debt  is  invalid.  20  Am.  &  Eng. 
Encyc,  1033.  A  conveyance  of  his  interest  in  the  land  by  deed  by  the  mort- 
gagee mav  carrv  with  it  the  power  of  sale.  Morton  v.  Lumber  Co.,  154 — 
336;  Weil  v.  Davis,  —  X.  C,  — ,  84  S.  E.,  395. 

Where  the  interest  is  assigned  pending  suit,  the  action  may  lie  continued 
in  the  name  of  the  assignor  or  assignee.  63 — 175;  115 — 385;  120 — 264.  A 
judgment  mav  be  assigned  subject  to  equities,  and  the  assignee  may  sue  on 
it  in  his  own  name.    94—265;  99—233;  109—150;  132—62;  23  L.  R.  A.,  335. 

A  surety  who  pays  a  judgment  or  bond  satisfies  it,  unless  he  has  it  as- 
signed to  a  third  person  for  his  benefit.  14 — 253;  14 — 380;  21 — 366;  57 — 
262;  101—589;  113—197;  115—38;  116—62;  129—114;  15—424;  74—250:  87— 
294;  36—190;  8 — 483;  Bank  v.  Hotel  Co.,  147—594;  Livermore  v.  Cahoon, 
156—187;  other  courts  hold  that  the  payment  itself  may  operate  as  a  trans- 
fer.    37  Cyc,  418;  Nelson  v.  Webster,  100  N.  \V.,  411,  68  L.  R.  A.,  513. 

A  bill  of  exchange,  payable  to  a  third  person  and  protested,  when  taken 
up  by  the  drawer,  can  not  be  put  in  circulation  again  ;  but  a  negotiable  note, 
coming  back  to  the  original  payee,  may  be  again  negotiated  without  prejudice 
to  previous  endorsers.  2 — 214;  24 — 417.  A  took  B's  note  for  the  purchase- 
money  of  land,  and  endorsed  it  to  C ;  C  sued  A  and  recovered  judgment;  A 
paid  the  judgment  and  had  the  note  reassigned  to  him,  and  then  endorsed 
it  to  D ;  D  could  recover  the  amount  from  B,  the  first  judgment  being  only 
on  the  contract  of  endorsement.     87 — 399. 

For  collection. — A  endorsed  a  note  to  B  for  collection  and  B  endorsed 
it  to  C,  after  maturity,  for  value  and  without  notice ;  C  got  a  valid  title. 
Parker  v.  Stallings,  61—590;  Hill  v.  Shields,  81—250;  69—93;  76—410;  91—7. 
An  attorney  holding  a  note  for  collection  has  no  authority  to  endorse  it  in 
his  own  name  or  his  principal's,  114 — 136;  where  A  gave  a  note  to  her  son 
to  give  to  a  lawyer  for  collection,  and  the  son  sold  it  to  B,  the  title  did  not 
pass,  68 — 341.  An  assignment  for  collection  did  not  make  the  assignee  the 
real  party  in  interest,  so  as  to  sue  in  his  own  name,  Abrams  v.  Cureton,  74 — 
523;  Boykin  v.  Bank,  118 — 566;  Revisal,  2186;  or  any  assignment  for  the 
benefit  of  the  assignor,  77 — 277;  but  if  the  assignee  is  to  collect  the  money 
and  apply  it  to  other  debts  in  his  hands,  he  is  a  trustee,  and  may  sue.  Wynne 
v.  Heck.  92—414.  As  to  what  constitutes  holder  in  due  course,  see  Revisal, 
2201,  2208. 

A  bill  of  lading  for  goods  not  actually  received  does  not  bind  the  carrier, 
even  when  transferred  bona  fide  for  value,  93 — 42;  9  L.  R.  A.,  263;  Peele  v. 
R.  R.,  149—390 ;  Roy  v.  N.  Pac.  R.  R.,  42  Wash.,  572,  85  Pac,  53,  6  L.  R.  A. 
(N.  S.),  302;  Thomas  v.  R.  R.,  85  S.  C,  537,  34  L.  R.  A.  (X.  S.).  1177. 

Sec.  2.  Assignment  by  operation  of  law. 
1.  Transfers    of   interests    in    land. 

(203)   BARBEE  v.  GREENBERG, 

144  X.  C,  430.  57  S.  E,  125,  12  Ann.  Cas.,  967—1907. 

Civil  action  to  recover  possession  of  a  storehouse.  There  was  a 
judgment  for  the  defendant,  and  plaintiff  appealed. 

Hoke,  J.  It  appears,  from  the  facts  found  by  the  trial  judge, 
that  the  storehouse  in  question  belonged  to  feme  plaintiff,  Virginia 
E.  Barbee,  and  that  on  14  August,  1903,  she  and  her  husband,  W. 
R.  Barbee,  executed  and  delivered  to  A.  S.  Greenberg  and  J.  Dean, 


510  EFFECT    OF    CONTRACT. 

a  mercantile  firm  doing  business  under  the  name  and  style  of  A. 
S.  Greenberg  &  Co.,  the  premises  in  question  for  three  years,  ''with 
privilege  of  three  years  more,"  from  11  August,  at  $55  per  month, 
R.  W.  Winston,  Esq.,  to  collect  the  first  year's  rent  and  W.  R. 
Barbee  to  collect  the  balance;  that  said  lease  was  duly  registered, 
and  the  lessees  entered  upon  their  occupation  and  possession  of  the 
property  in  the  transaction  of  the  firm's  business. 

That  some  six  or  eight  months  after  the  lease  had  been  executed 
Dean  sold  his  interest  in  the  firm  to  A.  S.  Greenberg,  and  A.  S. 
Greenberg  continued  the  business  under  the  firm  name  of  A.  S. 
Greenberg  &  Co.  That  W.  R.  Barbee  knew  that  J.  Dean  had  sold 
his  interest  to  A.  S.  Greenberg  about  twelve  months  after  the  sign- 
ing of  the  lease,  and  continued  to  collect  the  rents  from  A.  S. 
Greenberg  to  the  expiration  of  the  lease. 

That  in  May,  1906,  before  the  three  years'  lease  expired,  A.  S. 
Greenberg  gave  formal  notice  that  he  had  determined  to  avail  him- 
self of  "the  three  years  additional  referred  to  in  the  contract,  and 
that  he  would  continue  to  occupy  the  store  for  the  three  years  be- 
ginning 11  August,  1906.  (Signed)  A.  S.  Greenberg  &  Co.,  suc- 
cessors to  Greenberg  &  Dean." 

That  in  February,  1906,  W.  R.  Barbee  and  wife  leased  the  store 
to  their  coplaintiff,  M.  Bane,  to  commence  11  August,  1906,  and 
on  that  day  this  suit  was  instituted  in  the  names  of  W.  R.  Barbee 
and  wife  and  M.  Bane  against  the  defendant,  to  recover  possession 
of  the  property;  that  after  the  institution  of  the  action  the  rent 
was  tendered  monthly  by  defendant,  which  was  at  first  declined, 
but  afterwards,  and  pending  the  proceedings,  was  received  and  re- 
ceipted for  by  W.  R.  Barbee. 

Upon  these  facts,  the  court  adjudged  the  plaintiffs  are  not  en- 
titled to  recover  possession  of  the  property  and  that  defendants  are 
entitled  to  remain  in  possession  of  same  for  three  years  from  11 
August,  1906. 

By  the  terms  of  the  lease  the  storehouse  was  granted  to  Green- 
berg &  Co.  for  three  years,  ending  11  August,  1906,  "with  privi- 
lege of  three  years  more."  Whether  notice  was  required  to  be 
given  during  the  term  of  the  lessee's  election  to  renew  is  not  mate- 
rial here,  for  such  notice  was  given  ;  and  if  the  firm  of  Greenberg 
&  Co.,  as  now  constituted,  had  the  right  to  demand  a  renewal  of 
this  lease  Tor  its  own  benefit,  then  this  right  can  be  available  as 
a  defense  for  the  present  action,  though  the  same  was  instituted 
before  a  justice  of  the  peace.  McAdoo  v.  Galium,  86  N.  C,  419; 
Lutz  v.  Thompson,  87  N.  C,  334;  Levin  v.  Gladstein,  142  N.  C, 
482. 

These  covenants  to  renew  are  not  required  to  be  in  any  technical 
form  (McAdoo  v.  Callum,  supra;  Am.  &  Eng.  Enc.  (2  Ed.),  vol. 


ASSIGNMENT    OF    CONTRACT.  511 

18,  685),  and  when  sufficiently  definite  will  be  enforced  as  inci- 
dent to  the  lease;  and,  as  such,  conferring  a  right  which  consti- 
tutes a  part  of  the  tenant's  interest  in  the  land  itself. 

This  being  true,  in  the  absence  of  any  restraining  covenant,  the 
right  may  be  assigned  as  an  incident  of  the  lease  and  the  benefit 
enforced  by  the  assignee;  and  being  a  covenant  which  runs  with 
the  land,  it  will  also  be  enforced  against  the  lessor  or  his  assigns. 
Taylor  on  Landlord  and  Tenant  (9  Ed.),  sec.  413;  Cyc,  vol.  24, 
996;  Piggott  v.  Mason,  1  Paige,  412;  Betts  v.  June,  51  N.  Y.,  274; 
Blackmore  v.  Boardman,  28  Mo.,  420;  McClintock  v.  Joyner,  77 
Miss.,  678 ;  Cook  v.  Jones,  96  Ky.,  273 ;  Brook  v.  Bulkley,  2  Ves. 
Sr.,  497. 

In  Taylor  on  Landlord  and  Tenant  it  is  said:  "The  right  of 
renewal  constitutes  a  part  of  the  tenant's  interest  in  the  land ;  and, 
in  the  absence  of  a  covenant  to  the  contrary,  may  be  sold  and  as- 
signed by  him  and  the  benefits  of  the  right  may  be  enforced  by 
the  assignee." 

In  Wood  on  Landlord  and  Tenant,  supra,  it  is  said :  "A  cove- 
nant for  the  renewal  of  the  lease  on  the  landlord's  part  is  often 
inserted  in  a  lease ;  and  when  it  is,  it  is  binding  upon  the  landlord 
and  his  grantees  or  assignees,  as  such  covenants  relate  to  the  land 
and  pass  with  it."  And,  on  page  944,  the  author  further  says : 
"The  right  of  renewal  constitutes  a  part  of  the  tenant's  interest  in 
the  land ;  and,  unless  restricted,  may  be  sold  or  assigned  by  him, 
and  the  benefits  of  the  covenant  pass  to  the  assignee  and  may  be 
enforced  by  him."  And  in  Cyc,  supra,  it  is  stated :  "These  cove- 
nants to  renew  are  not  personal,  and  the  legal  successor  of  the 
lessee,  as  well  as  the  lessor,  are  entitled  to  the  benefits  and  are 
burdened  with  the  duties  and  obligations  which  such  covenants 
confer  on  the  original  parties."     See  also  Revisal,  sec.  1586. 

An  application  of  the  principles  indicated  by  these  authorities 
fully  sustain  the  trial  judge  in  holding  that,  on  the  facts  of  the 
case,  the  plaintiffs  have  no  present  right  to  recover  possession  of 
the  premises  in  question. 

There  was  no  stipulation  in  this  lease  restraining  the  lessees 
from  a  sale  or  assignment  of  their  term.  True,  when  the  lease 
was  made,  the  firm  of  Greenberg  &  Co.  was  composed  of  A.  S. 
Greenberg  and  J.  Dean.  But  it  is  found  as  a  fact  that,  six  or 
seven  months  after  the  execution  of  the  lease,  said  Dean  sold  his 
interest  in  the  firm  to  A.  S.  Greenberg,  who  continued  the  busi- 
ness under  the  firm  name  of  A.  S.  Greenberg  &  Co.  The  lease 
was  an  asset  of  the  partnership,  which  passed  to  the  purchaser, 
and  with  it  the  incidental  right  to  demand  a  renewal.  Betts  v. 
June,  supra;  Blackmore  v.  Boardman,  supra. 

In  this  last  case  it  was  held :     "A  covenant  for  the  renewal  of 


512  EFFECT    OF    CONTRACT. 

the  lease  is  an  incident  of  the  lease  and  will  pass  by  an  assign- 
ment of  the  unexpired  term." 

We  were  referred  by  counsel  to  the  cases  of  Finch  v.  Under- 
wood, Chancery  Div.,  2,  310;  James  v.  Pope,  19  N.  Y.,  324;  How- 
ell v.  Benlor,  41  W.  Va.,  610,  as  authorities  against  the  view 
which  we  have  taken  of  the  case;  but  we  do  not  so  understand 
these  decisions.     [The  court  then  discusses  and  distinguishes  these 

cases.] 

If  the  cases  cited  are  capable  of  the  interpretation  put  upon 
them  by  counsel,  we  would  not  hesitate  to  hold  that  they  are  not 
well  considered  in  that  they  contravene  the  principle  we  have  held 
as  controlling  on  the  facts  of  the  present  case;  that  in  the  absence 
of  a  restraining  covenant,  the  lease,  with  the  incidental  right  of 
renewal,  is  assignable ;  and  the  present  firm,  having  taken  such  as- 
signment during  the  existence  of  the  former  term,  and  having 
complied  with  all  the  stipulations  of  the  lease,  and  being  the  sole 
owner  of  the  right  and  interest  arising  by  reason  of  the  covenant 
to  renew,  is  entitled  to  remain  in  possession  of  the  premises,  and 
plaintiff's  demand  for  present  recovery  was  properly  denied. 

Affirmed. 

If  the  lessee  assigns  a  part  or  all  of  the  premises  for  the  whole  of  the 
term,  it  is  an  assignment  and  not  a  subletting.  Lunsford  v.  Alexander,  20— 
166;  privity  of  estate  and  privity  of  contract  exist  between  the  lessor  and 
assignee,  but  not  between  the  lessor  and  sublessee.  Krider  v.  Ramsay,  79— 
354;  Alexander  v.  Harkins,  120—452;  Mordecai's  Lectures,  508.  Same  point 
as  principal  case,  Greenville  v.  Gornto,   161 — 341. 

Rent  accrued  does  not  pass  to  the  assignee  of  the  reversion.  Kornegay  v. 
Collier,  65—69;  Wilcoxon  v.  Donnelly,  90—245;  Young  v.  Young,  115—105; 
but  rent  not  accrued  passes  as  incident  to  the  reversion.  Bullard  v.  Johnson, 
65—436:  Revisal,  1987,  1988. 

(204)   BLOUNT  v.  HARVEY, 

51  N.  C,  186—1858. 

Action  on  the  case  for  the  obstruction  of  an  easement.  Benja- 
min Edwards  and  James  Edwards  being  tenants  in  common  of  a 
mill,  Benjamin,  for  valuable  consideration,  conveyed  his  moiety  to 
James,  in  fee.  The  deed  is  executed  by  both,  and  contains  this 
clause:  "And  the  said  James  doth  for  himself  and  his  heirs  cove- 
nant and  agree  to  and  with  the  said  Benjamin  and  his  heirs,  that 
he,  the  said  Benjamin,  and  his  family,  shall  and  may  have  the 
privilege  of  grinding,  sawing  and  picking  cotton  at  the  mill,  toll- 
free,  for  his  family  use;  and  further,  that  if  Benjamin  shall,  at 
any  time  hereafter,  settle  either  one  of  his  sons  at  the  bridge  place, 
that  such  one  of  his  sons  as  may  be  there  settled,  shall  have  and 
enjoy  the  privilege  of  grinding,  sawing  and  picking  cotton  for  him- 
self and  his  family,  free  from  toll,  but  this  privilege  is  intended 
to  extend  no  further  than  to  such  son,  during  his  life,  and  for  his 


ASSIGNMENT    OF    CONTRACT.  513 

own  family  use."  James  died  intestate,  and  the  land  descended  to 
his  children,  who,  with  their  mother,  filed  petition  and  had  the 
land  sold  under  order  of  court,  and  defendant  became  the  pur- 
chaser, and  he  refused  to  allow  Benjamin  to  use  the  privilege 
above  granted.  Benjamin  began  this  action  and  died,  and  his  ex- 
ecutor was  made  a  party. 

The  defendant  contended  that  this  was  a  mere  personal  cove- 
nant, and  was  not  an  easement  attaching  to  the  corpus  of  the  land, 
but  His  Honor  being  of  a  different  opinion,  there  was  a  judgment 
for  the  plaintiff,  and  defendant  appealed. 

Pearson,  C.  J.  (after  stating  the  facts).  The  right  of  action  is 
put  on  the  ground  that  the  legal  effect  of  this  clause  is  a  grant  of 
the  easement  or  privilege  of  grinding,  toll-free,  and  not  a  covenant, 
whether  merely  personal  or  one  running  with  the  land. 

The  words  are  strictly  those  of  a  covenant,  and  a  construction 
converting  them  into  a  grant  can  only  be  justified  if  supported  by 
some  direct  authority,  or  very  clearly  by  "the  reason  of  the  thing." 

We  have  examined  the  cases  cited  on  the  argument,  and  do  not 
consider  any  of  them  "in  point."  Besides  the  words  "covenant 
and  agree,"  the  word  "grant,"  or  some  synonymous  term,  is  used 
in  all  the  instruments  which  are  construed  to  be  grants,  and  in  re- 
spect to  leases  for  years,  it  may  be  remarked,  that  "an  agreement 
to  lease,"  and  a  "lease,"  differ  very  slightly,  not  only  in  the  terms 
necessary  to  make  them,  but  in  legal  effect,  for  a  lease  is  a  con- 
tract to  permit  one  to  occupy  and  take  the  profits  of  land  for  some 
stated  time,  and  is  perfected  by  entry ;  whereas,  a  covenant  to  per- 
mit one  to  grind  at  a  mill,  toll-free,  and  a  grant  of  such  an  ease- 
ment, differ  very  widely,  both  in  legal  effect  and  in  respect  to  the 
persons  and  things  to  which  it  may  extend. 

The  "reason  of  the  thing,"  so  far  from  supporting  the  con- 
struction contended  for,  as  it  seems  to  us,  tends  the  other  way ;  at 
all  events,  it  does  not  preponderate  so  decidedly  as  to  overcome 
the  difficulty  of  converting  mere  words  of  covenant  into  a  grant. 

The  rule  "ut  res  magis  valcat  quam  pereat"  has  no  application. 
If  an  instrument  can  not  operate  in  the  mode  which,  from  its 
terms,  the  parties  seem  to  have  intended,  under  this  rule,  effect  is 
given  to  it  by  allowing  it  to  operate  in  some  other  mode ;  for  in- 
stance, if  a  deed  uses  terms  of  "release  only,"  and  the  relation  of 
the  parties  does  not  admit  of  its  operation  as  a  release,  effect  will 
be  given  to  it,  as  a  deed  of  "bargain  and  sale,"  provided  it  express 
a  valuable  consideration  which  will  create  a  use,  and  sets  out  the 
quantity  of  estate  intended  to  be  conveyed,  together  with  a  de- 
scription of  the  premises.  In  our  case,  the  deed  will  not  perish, 
but  will  avail  in  the  mode  which,  from  its  terms,  the  parties  seem 
to  have  intended,  i.  e.,  a  covenant. 


514  EFFECT    OF    CONTRACT. 

The  argument  that  to  treat  it  as  a  grant  will  be  most  beneficial 
to  the  vendor,  "cuts  both  ways,"  for  of  course  it  would  be  less  so 
to  the  vendee ;  and  would  fetter  his  estate  as  a  clog  upon  aliena- 
tion. The  parties  were  brothers,  and  while  the  privilege  was  to  be 
exercised  by  members  of  the  family,  and  amicable  relations  were 
kept  up,  it  might  do,  but  in  the  hands  of  a  stranger,  it  would  be 
impracticable.  The  idea  that  a  stranger  is  to  have  a  right  to  go  to 
another  man's  mill,  and  use  his  machinery  for  grinding,  sawing  or 
picking  cotton,  is  out  of  the  question.  No  sensible  man  could  be 
induced  to  buy  on  such  terms.  The  argument  is  against  the  plain- 
tiff in  another  aspect — that  of  public  policy — as  said  by  Lord 
Brougham,  in  Keppel  v.  Bailey,  2  Mylne  &  Keene,  577 :  "It  must 
not  be  supposed  that  incidents  of  a  novel  kind  can  be  devised  and 
attached  to  property  at  the  fancy  or  caprice  of  any  owner.  It  is 
clearly  inconvenient  to  the  science  of  the  law  and  the  public  weal 
that  such  a  latitude  should  be  given.  There  can  be  no  harm  in  al- 
lowing men  the  fullest  latitude  in  binding  themselves  or  their  rep- 
resentatives, that  is,  their  assets,  real  and  personal,  to  answer  in 
damages  for  breach  of  their  obligations.  This  tends  to  no  detri- 
ment and  is  a  reasonable  liberty  to  bestow  ;  but  great  detriment 
would  arise,  and  much  confusion  of  rights,  if  parties  were  allowed 
to  invent  new  modes  of  holding  and  enjoying  real  property,  and 
to  impress  upon  their  lands  a  peculiar  character  which  should  fol- 
low them  into  all  hands,  however  remote." 

The  remaining  argument,  which  is  the  one  most  relied  on,  drawn 
from  the  covenant  as  to  ponding  back  the  water,  and  which,  it  is 
contended,  must  be  allowed  to  operate  as  a  grant  of  the  easement, 
is  alike  inconclusive.  The  clause  is  as  follows :  "And  it  is  hereby 
covenanted  and  agreed  by  and  between  the  said  parties,  that  the 
said  James,  his  heirs  and  assigns,  shall,  at  no  time  hereafter,  be 
liable  to  any  action  or  demand  for  damages  which  may  arise  from 
the  overflowing  of  any  part  of  the  lands  of  the  said  Benjamin, 
which  are  not  contained  in  this  indenture,  which  may  be  occasioned 
by  the  erection  or  raising  of  the  milldam  of  the  said  mill."  In  re- 
spect to  the  easement  of  overflowing  the  land  as  the  mill-pond  then 
was  and  had  been  used,  it  was  implied  as  an  incident  of  the  grant 
of  the  mill,  and  the  covenant  was  superfluous.  In  respect  to  the 
supposed  right  to  make  the  dam  higher,  and  overflow  more  land, 
ad  libitum,  two  questions  of  doubtful  construction  are  presented: 
Was  it  the  intention  to  confer  any  such  right?  If  so,  was  a  cove- 
nant relied  on  to  secure  its  enjoyment,  or  was  a  grant  intended? 
One  matter  of  doubtful  construction  can  derive  but  little  aid  from 
another.  The  analogy,  however,  fails,  in  several  respects.  In  the 
covenant  as  to  overflowing  the  land,  the  word  "assigns"  is  used, 
and  it  is  likewise  used  in  each  of  the  three  covenants,  at  the  con- 


ASSIGNMENT    OF    CONTRACT.  515 

elusion  of  the  deed,  i.  c,  of  seisin,  of  quiet  enjoyment,  and  for 
further  assuranee ;  but  it  is  omitted  in  the  covenant  under  consid- 
eration. It  may  be  that  the  word  has  no  legal  effect  upon  the 
covenants  where  it  is  used,  but  it  sometimes  has  a  very  important 
effect.  See  notes  to  Spencer  case,  1  Smith's  Leading  Cases,  75, 
and  the  omission  of  it  in  one  covenant  shows  that  the  parties  con- 
sidered it,  or  intended  it,  to  be  of  a  different  nature  from  the  cove- 
nants in  which  it  is  used. 

The  right  to  overflow  more  land  may  have  been  considered  nec- 
essary to  the  full  enjoyment  of  the  mill,  and  being  connected  with 
the  property,  ought  to  be  of  like  duration  in  time;  but  the  priv- 
ilege of  grinding,  etc.,  toll-free,  is  a  thing  collateral,  or  constituted 
merely  a  part  of  the  price ;  for,  by  reason  of  it,  the  vendor  was 
able  to  take  less  for  the  mill ;  and  being  collateral,  full  compensa- 
tion can  be  made  in  damages.  This  view  is  much  strengthened 
by  the  fact  that  the  privilege,  in  respect  to  the  son,  is  expressly 
for  life  only,  and  is  impliedly  so  in  respect  to  the  vendor,  being 
restricted  to  the  use  of  his  family. 

Upon  the  whole,  there  is  nothing  to  convince  us  that  the  parties 
intended  to  do  more  than  the  terms  used  import,  i.  e.,  the  one  to 
make,  and  the  other  to  accept  a  covenant,  for  the  purpose  of  secur- 
ing the  enjoyment  of  the  limited  privilege  stipulated  for;  and  we 
are  unwilling,  by  a  strained  construction,  to  produce  a  consequence 
"inconvenient  to  the  science  of  the  law  and  the  public  weal." 

There  is  error;  judgment  reversed,  and  venire  de  novo.  As  the 
facts  were  not  contested,  it  is  to  be  regretted  that  the  case  was  not 
put  in  shape  for  final  judgment. 

Per  Curiam.  Judgment  reversed. 

(205)   NORFLEET  v.  CROMWELL, 

70  N.  C,  634—1874. 

Civil  action  upon  a  covenant  of  defendant's  assignor.  In  1855, 
the  plaintiffs  were  in  the  possession  and  use  of  a  canal  lying  partly 
on  their  own  lands  and  partly  on  the  lands  of  others,  of  whom  de- 
fendant was  one.  It  passed  near  to,  but  did  not  touch  certain 
lands  of  one  Gregory,  which,  upon  his  death,  descended  to  one 
Lloyd,  and  after  his  death  was  purchased  by  the  defendant  from 
Lloyd's  devisees. 

The  agreement  between  the  plaintiffs  fixed  the  terms  for  the  use 
of  the  canal  for  drainage,  and  how  the  expense  should  be  paid  by 
each  person.  In  1858,  they  made  an  agreement  with  Lloyd,  that 
he,  his  heirs  and  assigns,  might  drain  his  lands  into  the  canal 
under  certain  conditions,  and  under  the  same  rights,  privileges  and 
burdens  as  the  original  parties  had.  In  1860,  the  devisees  of  Lloyd 
conveved  the  land  to  the  defendant  in  fee,  "with  all  the  privileges, 


516  EFFECT   OF    CONTRACT. 

easements,  appurtenances,  rights,  advantages,  burdens,  and  encum- 
brances." After  this  deed  was  made,  the  plaintiff's  intestate  did 
some  work  on  the  canal,  and  called  on  the  defendant  to  pay 
Lloyd's  share  of  the  expense,  and  upon  his  refusal  to  do  so,  this 
action  was  brought. 

There  was  a  judgment  for  the  plaintiff,  and  defendant  appealed. 

Rodman,  J.  (after  stating  the  facts  and  discussing  the  right  of 
eminent  domain  involved).  The  defendant  contends  that  the  cove- 
nant of  Lloyd  does  not  run  with  the  land.  His  counsel  endeavored 
to  distinguish  the  present  case  from  that  in  64  N.  C,  1,  by  reason 
that  it  appeared,  or  was  assumed  there,  that  the  canal  was,  in  part, 
situated  on  the  Lloyd  lands,  when  it  appears  now  that  it  does  not 
touch  either  piece,  although  it  is  near  enough  to  them  to  affect 
them  somewhat. 

The  language  of  Lord  Coke  in  Spencer's  case  (1  Smith  L.  C, 
23),  does  not  require  a  physical  touch.     "But  although  the  cove- 
nant be  for  him  or  his  assigns,  yet  if  the  thing  to  be  done  be  merely 
collateral  to  the  land,  and  do  not  touch  or  concern  the  thing  de- 
mised in  any  sort,  there  the  assignee  shall  not  be  charged."     In 
this  case  the  thing  to  be  done  is  to  pay  for  work  done  on  a  canal 
which  does  not  touch  the  land  of  the  covenantor,  but  is  to  his  ben- 
efit, and  the  way  in  which  it  was  contemplated  to  obtain  that  ben- 
efit more  fully  and  directly  was  by  connecting  the  land  with  the 
canal  by  a  ditch,  which  must,  of  course,  touch  the  land;  and  its 
not  being  in  esse  at  the  time  makes  no  difference  when  assigns  are 
mentioned.     Looking  at  the  whole  agreement,  of  which  the  cove- 
nant was  a  part,  it  is  clear  that  it  did  directly  concern  the  land. 
Many  cases  have  held  that  where  a  covenant  is  not  to  be  per- 
formed on  the  land,  but  concerns  it,  the  covenant  will  be  enforced 
in   equity  against  an  assignee  of   the  covenantor,   with   notice,   as 
the  defendant  here  is.     Tulk  v.  Moxhay,  2  Phil,  776;  22  Cond. 
E.  Ch.  R.;  11  Bew.,  571;  Western  v.  McDermot,  1  Eq.  R.,  449, 
2  Ch.  Ap.,  72;  Barrow  v.  Richard,  8  Paige,  351;   St.  Andrew's 
Church,  appeal,  67  Pa.,  512. 

Independently  of  this,  however,  there  are  two  arguments  which 
might  be  out  of  place  in  a  mere  court  of  law,  but  which  a  court 
of  equity  is  entitled  to  notice,  that  must  be  considered  conclusive 
of  the  question : 

1.  The  consideration  for  the  covenant  was  the  grant  of  an  ease- 
ment which  became  appurtenant  to  the  land,  and  passed  with  it  to 
the  defendant  on  his  purchase.  This  easement  he  has  accepted  and 
enjoyed,  and  it  is  his  only  title  to  drain  the  land  into  the  canal. 
The  principle  is  generally  conceded,  and  it  is  certainly  equitable, 
that  when  the  benefit  and  burden  of  a  contract  are  inseparably 
connected,  both  must  go  together,  and  liability  to  the  burden  is  a 


ASSIGNMENT    OF    CONTRACT.  517 

necessary  incident  to  the  right  to  the  benefit.  Qui  sentit  commo- 
dum  sentire  debet  et  onus.  Notes  to  Spencer's  case,  1  Smith  L. 
C,  143;  Savage  v.  Mason,  3  Cush.,  318;  Coleman  v,  Coleman,  7 
Harriss,  100. 

2.  If  Lloyd  had  obtained  his  right  to  drain  into  the  canal  by 
proceeding  under  the  Revised  Code,  chap.  40,  as  he  might  have 
done,  it  is  clear  by  section  13  that  the  obligation  to  contribute  to 
repairs  would  have  run  with  the  land.  When  the  same  rights  are 
obtained  and  the  same  burdens  assumed  by  a  contract  which  ex- 
pressly stipulates  that  the  burdens  shall  run  with  the  land,  there 
can  be  no  reason  why  such  a  stipulation  must  be  held  unlawful 
and  forbidden  to  have  that  effect".  If  Lloyd  had  proceeded  under 
the  act,  he  might  have  made  the  defendant  a  party  for  the  pur- 
pose of  condemning  his  intervening  lands ;  but  the  defendant  would 
not  have  been  a  party  to  that  part  of  the  proceedings  which  gave 
Lloyd  a  share  in  the  canal  and  adjusted  his  duties  with  the  other 
owners,  for  the  defendant  had  no  share  in  the  canal  and  no  con- 
cern in  those  matters. 

3.  Defendant  contends  plaintiffs  had  no  right  to  permit  stran- 
gers to  the  decree  of  the  court  to  drain  into  the  canal,  whereby  a 
greater  quantity  of  water  and  sand  has  been  brought  down  upon 
his  lands  than  was  contemplated  in  the  decree,  and  that  by  such 
misuser  of  their  rights  they  forfeited  them. 

1.  The  first  answer  which  may  be  given  to  this  proposition  is, 
that  the  defendant  is  not  in  court  as  the  owner  of  the  lands  which 
he  owned  at  the  time  of  the  decree,  and  which  are  the  lands  in- 
jured by  the  misuser,  but  as  the  assignee  of  Lloyd,  and  the  whole 
issue  is  upon  his  liability  as  such.  The  Lloyd  lands  are  not  in- 
jured by  the  misuser,  and  that  in  other  respects  he  is  injured,  is 
not  pertinent  to  the  issue.  Besides,  Lloyd  could  not  complain  of 
the  alleged  misuser.  He  derived  his  right  from  the  new  owners, 
and  by  his  covenant  with  them  admits  their  rightful  ownership, 
and  the  defendant  stands  in  Lloyd's  shoes  in  respect  to  the  Lloyd 
lands.  If  the  defendant  is  damaged  in  these,  by  the  omission  of 
the  parties  to  the  covenant  to  repair  the  lower  portion  of  the 
canal,  the  covenant  points  out  his  remedy.  He  may  determine 
what  repairs  are  necessary  and  do  them,  and  compel  contribution 
from  the  other  parties. 

2.  Supposing,  however,  that  the  defendant  can  avail  himself  of 
a  defense  not  open  to  his  assignor,  and  assuming  that  the  lands 
which  he  owned  at  the  date  of  the  decree  are  damaged  by  the  mis- 
user, is  his  remedy  by  defeating  the  present  action? 

The  principle  established  by  the  authorities  cited  by  the  learned 
counsel  we  conceive  to  be  this :  If  the  owner  of  an  easement  over 
the  land  of  another  unlawfully  enlarges  it  to  the  injury  of  the 


518  EFFECT    OF    CONTRACT. 

owner  of  the  servient  land,  the  easement  is  lost  or  suspended  dur- 
ing the  continuance  of  the  misuser.  Washburn,  538 ;  Jones  v.  Tap- 
ling,  11  C.  B.  N.  S.,  283;  Wood  v.  Copper  Miners  Co.,  14  C.  C, 
428;  Sharpe  v.  Hancock,  7  Man.  &  Gr.,  354. 

In  the  last  case  the  easement  was  a  right  to  drain  over  the  land 
of  the  defendant ;  the  plaintiff  altered  that  part  of  the  drain  which 
was  on  his  own  land  so  as  to  throw  an  increased  quantity  of  water 
into  that  part  of  it  on  defendant's  land,  and  which  the  defendant 
was  bound  to  maintain  in  repair,  thereby  increasing  his  burden. 
In  the  present  case,  the  defendant  (independently  of  his  liability 
as  assignee)  is  under  no  obligation  to  repair.  The  conclusive  an- 
swer to  the  defendant's  proposition  is  this :  The  Act  of  1795  im- 
plicitly allows,  and  the  Revised  Code  expressly  provides  that 
strangers  to  the  original  decree  may  drain  into  the  canal  (sec.  9), 
and  it  would  be  absurd  to  hold  that  what  may  be  done  in  invitum 
may  not  be  done  by  the  voluntary  agreement  of  the  parties.  The 
possible  future  enlargement  of  the  use  of  the  easement  was  con- 
templated in  the  grant  of  it,  and  was  therefore  not  unlawful.  If, 
however,  the  defendant  is  damaged  by  such  a  change ;  if  the  ca- 
pacity of  the  canal  at  its  mouth  is  insufficient  to  vent  the  increased 
quantity  of  water  flowing  down,  or  if  the  owners  of  the  canal  neg- 
lect to  repair  it,  so  that  the  water  spreads  over  the  defendant's 
land,  it  is  clear  that  he  has  a  remedy. 

The  acts  cited  and  the  common  law  cast  on  the  owners  of  the 
easement  the  burden  of  repair.  Washington,  564;  Egremont  v. 
Pulman,  Moody  &  M.,  404;  Bell  v.  Twentyman,  C.  B.,  766.  But 
a  right  of  the  defendant  to  damages  for  a  breach  of  this  duty 
would  not  relieve  him  from  the  present  liability. 

Per  Curiam.  Judgment  affirmed. 

Where  an  easement  is  granted,  reserving  $20  a  year,  it  is  not  rent,  but  a 
covenant  to  be  enforced  by  an  action  of  debt;  the  grantee  of  the  land  would 
take  it  subject  to  the  easement,  and  would  be  entitled  to  the  compensation. 
Raby  v.  Reeves,  112—688.     See  also  Barringer  v.  Trust  Co.,  132—409. 

Covenants  restricting  the  use  of  land  will  be  enforced  against  the  parties 
and  those  taking  with  notice.  Cobb  v.  Clegg,  137—153;  Herring  v.  Lumber 
Co.  163—486;  Parrott  v.  R.  R..  165—295;  Guilford  v.  Porter,  167—366; 
Newhold  v.  Peabody  Heights  Co.,  70  Md.,  493,  17  Atl.,  372,  3  L.  R.  A.  579; 
Chippewa  Lumber  Co.  v.  Tremper,  75  Mich.,  36,  42  N.  W.,  532,  4  L.  R.  A., 
262;  Hawlev  v.  Kafitz,  148  Cal.,  393,  83  Pac,  248,  3  L.  R.  A.  ( N.  S.L  741: 
Evans  v.  Foss,  194  Mass.,  513,  80  N.  E.,  587,  9  L.  R.  A.  (X.  S.L  1039.  11 
\nn.  Cas..  171  ;  Sprague  v.  Kimball,  213  Mass.,  380,  100  X.  E.,  622,  45  L.  R. 
\  (X  S  ).  962,  Ann.  Cas..  1914  A,  431;  Sjoblom  v.  Mark,  103  Minn.  193.  14 
Ann.  Cas.,  125;  Ames  Cas.  Eq.  Juris.,  Parts  I-VI,  135;  11  Cyc,  1077:  7  R. 
C.  L..  1114. 

Covenants  in  a  (Wed  which  run  with  the  land, — warranty  and  quiet  enjoy- 
ment; nut  running  witli  the  land — seisin,  right  to  convey,  and  against  encum- 
brances. Mordecai's  Lectures,  pp.  757.  77X,  783,  799,  ct  scq.:  3  Page  Cont, 
sees.  12S5.  1289;  Wiggins  v.  Pender,  132—628  (61  L.  R.  A.,  772),  where  the 
subject  is  fully  discussed.  The  covenant  can  not  be  assigned  separate  from 
tlu' land.  Lewis  v.  Cook,  35—193:  Ravenal  v.  Ingram,  131—549:  Smith  v. 
[ngram,    132— p.  963.      It   dues  not  extend  beyond  the  estate  granted.     35— 


ASSIGNMENT    OF    CONTRACT.  519 

193;  48 — 312.  The  word  "assigns"  is  not  necessary.  132 — p.  632,  overruling 
130 — 100.  Covenant  of  quiet  enjoyment.  18—94.  Duty  to  keep  a  bridge  in 
repair.  66 — 287;  Revisal,  2697.  A  grantee  accepting  a  deed  poll  is  bound 
bv  its  conditions,  though  he  does  not  sign  it,  and  his  assigns  are  also  bound. 
76—158;  23  L.  R.  A..  376;  11  Cyc,  1080;  7  R.  C.  L.,  1105. 

2.  By    Marriage. 

(206)  O'CONNOR  v.  HARRIS, 

81  X.  C,  279—1879. 

Harris  and  his  wife  were  married  in  1865,  and  in  1867  sued  the 
wife's  guardian  for  settlement;  in  1873,  while  this  suit  was  pend- 
ing, Harris  assigned  to  O'Connor  his  interest  in  the  estate ;  after- 
wards Harris  compromised  the  suit  with  the  guardian,  with  the 
understanding  that  the  guardian  was  to  pay  over  about  $1,800  for 
the  benefit  of  the  wife;  O'Connor  claimed  that  this  arrangement 
was  made  after  notice  of  the  assignment  to  him,  and  that  he  was 
entitled  to  the  interest  in  the  estate.  There  was  a  judgment  for 
the  plaintiff,  and  the  defendant  appealed. 

DiLLAkD,  ].  .  .  .  The  appeal  presents  this  question:  Did 
the  assignment  by  Harris  to  J.  O'Connor  in  1873  have  the  effect 
to  pass  to  the  assignee  a  right  to  have  the  funds  in  the  hands  of 
the  guardian  of  his  wife,  the  marriage  having  taken  place  and  the 
sum  being  due  before  the  adoption  of  the  Constitution  of  1868,  or 
was  the  wife  entitled  to  the  same  as  a  separate  estate  against  the 
claim  of  her  husband  and  his  assignee? 

At  common  law,  marriage  was  an  absolute  gift  to  the  husband 
of  all  the  personal  property  of  the  wife  in  possession,  and  the  same 
became  his  property  instantly  on  the  marriage ;  and  it  was  a  quali- 
fied gift  of  all  the  personal  property  adversely  held,  and  all  the 
choses  in  action  of  the  wife,  which  became  the  husband's  abso- 
lutely upon  his  reduction  of  the  same  into  possession,  during  the 
coverture,  with  the  right  in  case  the  wife  die  to  administer  on  her 
estate,  and  in  that  character  to  collect,  and  after  payment  of  her 
debts  to  hold  the  surplus  to  his  own  use,  without  obligation  to  dis- 
tribute to  anyone. 

It  was  also  competent  to  the  husband  having  choses  in  action 
jure  mariti  to  assign  the  same  for  value,  or  as  a  security  to  pay 
his  debts,  and  the  assignment  availed  to  pass  the  right  to  the  as- 
signee to  collect  and  have  the  proceeds  as  his  absolute  property, 
if  collected  during  coverture,  just  as  the  husband  might  have  done 
if  he  had  kept  and  reduced  it  into  possession  himself.  Bell,  Hus- 
band and  Wife,  55,  56;  Arrington  v.  Yarborough,  54  N.  C,  72. 

Such  has  ever  been  the  effect  of  marriage  in  this  State  as  to  the 
rights  and  powers  of  the  husband  in  the  choses  in  action  of  the 
wife,  legal  and  equitable.     And  accordingly,   without  the  concur- 


520  EFFECT    OF    CONTRACT. 

rence  of  the  wife,  the  husband  could  receive  and  grant  discharges 
for  any  sum  or  sums  of  money  due  her,  and  the  money  when  re- 
ceived became  his,  and  he  had  the  right  to  enforce  payment  of  all 
her  choses  in  action,  without  the  obligation,  here  as  in  England,  to 
make  a  settlement  out  of  her  equitable  choses.  And  so,  Harris, 
the  husband,  on  his  marriage  acquired  the  perfect  right,  and  J. 
O'Connor,  by  assignment,  succeeded  to  the  same,  to  have  an  ac- 
count and  settlement  of  any  sums  due  from  Carstarphen,  the 
former  guardian  of  the  wife,  liable  only  to  be  defeated  by  the  ac- 
cident of  the  husband's  death  before  the  death  of  the  wife. 

In  this  case,  the  chose  in  action  assigned  to  the  plaintiff,  J. 
O'Connor,  was  due  at  the  time  of  the  marriage,  and  a  suit  was 
brought  for  its  recovery  before  the  adoption  of  the  Constitution  of 
1868;  and  the  coverture  still  continuing,  the  assignee  of  the  hus- 
band has  still  the  right  to  have  the  proceeds  of  the  claim  assigned 
to  him,  unless  the  Constitution  operated  to  divest  or  take  away  the 
husband's  right  and  thus  disable  him  to  pass  any  right  by  assign- 
ment to  J.  O'Connor. 

In  Sutton  v.  Askew,  66  N.  C,  172,  the  husband  owned  land 
before  the  passage  of  the  Act  of  1867  enlarging  the  right  of 
dower,  so  as  to  include  all  the  lands  of  which  the  husband  was 
seized  at  any  time  during  the  coverture,  and  the  question  was  as 
to  the  effect  of  the  act  on  the  rights  of  alienation  by  the  husband, 
and  it  was  ruled  in  this  court  that  the  husband  might  sell  and  con- 
vey the  title  without  being  joined  by  the  wife,  upon  the  ground 
that  he  had  a  vested  right  to  sell  and  convey  on  his  single  deed  at 
the  marriage,  and  it  was  incompetent  to  the  Legislature,  by  the 
new  dower  act,  to  restrict  his  right  of  alienation,  or  do  more  than 
confer  an  inchoate  right  on  the  wife  defeasible  by  a  sale  and  con- 
veyance by  the  deed  of  the  husband  alone. 

In  Holliday  v.  McMillan,  79  N.  C,  315,  the  marriage  occurred 
before  the  adoption  of  the  Constitution  of  1868,  and  the  father 
having  given  his  daughter  some  articles  of  personal  property  after 
its  adoption ;  the  property  was  levied  on  by  creditors  of  the  hus- 
band, and  it  was  claimed  that,  as  an  incident  to  marriage,  the 
husband  not  only  had  the  right  to  the  property  of  the  wife  in  pos- 
session then,  but  also  to  all  such,  including  the  late  gift  to  his  wife, 
as  she  might  in  any  manner  acquire  during  her  coverture ;  and  it 
was  urged  that  this  right  of  the  husband  could  not  be  impaired  by 
the  Constitution  adopted  subsequently  to  the  marriage.  The  court 
ruled,  reaffirming  Sutton  v.  Askew,  supra,  that  it  was  only  vested 
rights  of  the  husband  that  were  secure  from  impairment  by  the 
Constitution  and  subsequent  legislation,  and  that  it  was  legitimate 
and  no  infringement  of  the  proper  rights  of  the  husband,  to  create 
a  separate  estate  in  the  wife  of  all  acquisitions  of  property  and 


ASSIGNMENT    OF    CONTRACT.  521 

possibilities  accruing  to  her  in  any  manner  subsequent  to  the  adop- 
tion of  the  Constitution  of  1868. 

In  Bruce  v.  Strickland,  decided  at  this  term  (81 — 267),  the 
marriage  took  place  and  the  land  was  acquired  before  the  act  re- 
storing the  common  law  right  of  dower  and  before  the  creation  of 
a  homestead  in  land,  and  the  husband,  by  deed,  in  1874,  without 
his  wife's  being  a  party  thereto,  conveyed  the  tract  with  a  right  of 
redeeming  the  same  within  two  years,  and  on  a  question  made,  it 
is  ruled  that  the  husband  had  a  vested  right  to  sell  his  land,  free 
alike  from  dower  or  homestead,  as  provided  by  the  Constitution  of 
1868,  and  having  exercised  that  right  it  is  beyond  recall. 

Adhering  to  the  correctness  of  the  decisions  above  referred  to, 
and  the  reasons  on  which  they  were  founded,  we  hold  that  the 
marriage  between  Harris  and  his  wife  clothed  him,  or  any  assignee 
claiming  under  him,  with  the  right  to  have  the  legal  and  equitable 
choses  in  action  of  the  wife,  and  that  such  right,  although  not 
absolute  so  as  to  exclude  survivorship  to  the  wife,  was  a  substan- 
tial and  vested  interest,  with  no  infirmity  in  it,  except  as  being  lia- 
ble to  be  defeated  on  the  death  of  the  husband  before  the  wife's 
death.  This  right  was  not  a  right  in  a  possibility  or  mere  ex- 
pectancy, but  a  right  fixed  and  established  by  law  in  the  husband 
as  an  incident  to  marriage  and  attaching  to  a  fund  due  and  out- 
standing in  the  hands  of  the  guardian,  and  presently  recoverable, 
with  nothing  to  defeat  it,  except  in  the  possible  survivorship  of 
the  wife. 

Such  being  the  character  of  the  right  of  Harris  as  husband  in 
the  fund  assigned,  his  rights  could  not  be  taken  away  and  given 
to  the  wife,  without  his  consent,  by  the  Constitution  of  1868,  cre- 
ating separate  estates  in  femes  covert. 

It  is  therefore  the  right  of  the  present  plaintiff,  O'Connor,  to 
recover  and  have  as  assignee  of  Harris,  for  the  purpose  of  the 
trust,  so  much  of  the  fund  in  the  hands  of  the  guardian,  or  which 
was  in  his  hands  after  notice  of  the  assignment,  as  will  answer 
the  purposes  of  the  assignment,  subject,  however,  to  the  continu- 
ing right  of  the  wife  to  have  the  fund  if  the  husband  shall  die 
before  it  is  collected. 

No  error.  Affirmed. 

To  the  same  effect  is  Morris  v.  Morris.  94 — 613.  The  Constitution,  Art. 
X.  sec.  6,  gives  the  wife  all  her  property  as  her  separate  estate.  The  husband 
still  has  the  right  to  administer  and  take  the  surplus  after  payment  of  her 
debts.  Revisal,  4 ;  Mordecai's  Lectures,  pp.  380,  966.  By  the  common  law  the 
husband  became  liable  for  the  wife's  debts,  but  that  is  changed  by  statute. 
Revisal,  2101.  2106;  86—136.     See  Married  Women's  Contracts,  ante. 


?22  KFFKCT    OF    CONTRACT 


3.  Assignment   by   death. 

Revisal,  156. — Upon  the  death  of  any  person,  all  demands  whatsoever, 
and  rights  to  prosecute  or  defend  any  action  or  special  proceeding,  existing 
in  favor  of  or  against  such  person,  except  as  hereinafter  provided,  shall 
survive  to  and  against  the  executor,  administrator  or  collector  of  his  estate. 

157.  The  following  rights  of  action  do  not  survive:  (1)  Causes  of  action 
for  libel  or  slander,  except  slander  of  title;  (2)  causes  of  action  for  false 
imprisonment  and  assault  and  battery;  (3i  causes  where  the  relief  sought 
could  not  be  enjoyed,  or  granting  it  would  be  nugatory,  after  death.  Amend- 
ed, Acts  1915,  ch.  38. 

For  injuries  resulting  in  death,  see  Revisal,  59,  60;  Bolick  v.  R.  R.,  138 — 
370. 

Revisal,  415,  Clark's  Code,  sec.  188,  provides  that  no  action  shall  abate  by 
death,  etc.,  if  the  cause  of  action  survive;  and  in  case  of  death,  etc.,  except 
in  suits  for  penalties,  and  for  damages  merely  vindictive,  on  motion  the  court 
may  allow  the  action  to  he  continued  by  or  against  the  representative. 

(207)    SILER,  Admr.,  v.  GRAY.  Admr., 
86  X.  C.  566—1882. 

Civil  action  for  breach  of  contract.  L.  F.  Siler,  the  defendant's 
intestate,  in  consideration  of  receiving-  a  deed  for  certain  land  from 
J.  R.  Siler.  the  plaintiff's  intestate,  agreed  to  care  for  and  support 
J.  R.  Siler  and  wife  during  their  lives  and  allow  them  to  occupy 
the  land  with  him,  and  he  also  agreed  to  pay  to  one  Moore  and 
Sloan  the  sum  of  $500,  each,  at  the  death  of  said  J.  R.  Siler  and 
wife;  upon  failure  to  perform  said  agreement  he  was  to  forfeit 
and  pay  to  J.  R.  Siler  or  his  heirs  the  sum  of  $5,000.  L.  F.  Siler 
performed  the  contract  as  to  the  service  as  long  as  he  lived,  hut 
J.  R.  Siler  and  wife  survived  him  several  years,  and  the  complaint 
alleges  that  no  provision  was  made  for  them  by  1,.  F.  Siler  or  liis 
representatives,  and  the  money  was  not  paid  to  Moore  and  Sloan. 
This  action  is  brought  to  recover  the  $5,000,  from  the  estate  of 
L.  F.  Siler. 

The  court  held  that  the  plaintiff  could  not  recover  of  the  defend- 
ant except  for  a  breach  of  the  contract  committed  in  the  lifetime  of 
his  intestate.     The  plaintiff  submitted  to  a  nonsuit,  and  appealed. 

RuFFlN,  J.  There  being  no  evidence  offered  in  support  of  the 
breach,  alleged  to  consist  in  the  nonpayment  of  the  sums  stipu- 
lated to  Roxanna  E.  Moore  and  Harriet  T.  Sloan,  that  part  of  the 
case  is  excluded  from  our  consideration,  and  the  plaintiff's  right 
to  recover  left  to  depend  upon,  as  the  only  matter  complained  of, 
the  failure  of  the  personal  representatives,  or  heirs  at  law,  of  the 
intestate  1,.  F.  Siler,  after  his  death,  to  contribute  to  the  support 
of  J.  R.  Siler  and  his  wife — as  to  which  this  court  fully  concurs 
in  the  ruling  of  Mis  Honor  in  the  court  below.  The  general  rule 
unquestionably  is.  that  the  personal  representatives  of  a  party  are 


ASSIGNMENT    OF    CONTRACT.  523 

bound  to  perform  all  his  contracts,  whether  specially  named  in 
them  or  not,  or  else  make  compensation  for  their  nonperformance 
out  of  his  estate.  But  to  this  there  is  the  exception,  as  well  estab- 
lished as  the  rule  itself,  of  all  such  contracts  as  require  something 
to  be  done  by  the  party  himself  in  person. 

In  Chilly's  Pleading,  19,  it  is  said  that  no  action  lies  against 
the  executor  upon  a  covenant  to  be  performed  by  the  testator  in 
person,  and  which  consequently  the  executor  can  not  perform;  and 
again,  in  Chitty  on  Contracts,  138,  that  death,  though  not  in  gen- 
eral a  revocation  of  an  agreement,  may  be  such  when  the  engage- 
ment is  a  personal  one,  to  be  performed  by  the  deceased  himself, 
and  requiring  personal  skill  or  taste. 

Jn  Pollock  on  Contracts,  367,  the  principle  is  thus  stated:  "All 
contracts  for  personal  service,  which  can  be  performed  only  during 
the  life  of  the  contracting  party,  are  subject  to  the  implied  condi- 
tion that  he  shall  live  to  perform  them,  and  should  he  die,  his  ex- 
ecutor is  not  liable  to  an  action  for  the  breach  of  contract  occa- 
sioned by  his  death." 

In  such  cases,  it  is  held  that  the  act  of  God  furnishes  an  excuse 
sufficient.  Accordingly  in  Bourt  v.  Firth,  4  Court  of  C.  P.,  1,  a 
plea  to  an  action  on  an  apprentice  bond  that  the  apprentice  was 
prevented  by  sickness  from  performing  the  contract,  was  ruled  to 
be  a  valid  plea  and  the  defense  a  good  one,  the  court  saying  that 
incapacity,  by  reason  of  the  intervention  of  an  act  of  Cod,  to  per- 
form personal  service,  is  an  excuse  for  its  nonperformance,  not- 
withstanding an  absolute  and  unconditional  covenant  to  render  the 
same  ;  and  again  in  Farrow  v.  Wilson,  reported  in  the  same  vol- 
ume, at  page  744,  it  was  held  that  where  one  party  covenanted  to 
serve  another  as  farm  bailiff,  the  death  of  either  party  dissolved 
the  contract — such  being  an  implied  condition,  it  was  said,  in  every 
contract  for  personal  services — and  the  same  doctrine  has  been 
recognized  in  Robinson  v.  Davidson,  6  Court  of  Exchequer,  268 ; 
Taylor  v.  Caldwell,  113  K.  C.  L.  Rep.,  826;  Dickey  v.  IJnscott, 
20\le.,  453. 

Assuming  such  to  be  the  law,  under  which  does  the  case  at  bar 
fall — the  general  rule,  or  the  exception  as  stated?  This  must  de- 
pend upon  the  intention  of  the  parties,  for  at  last,  it  is  in  every 
case  purely  a  question  as  to  their  intention. 

It  is  true  that  the  cases  put  down  in  the  books,  like  those  cited 
by  us,  are  generally  those  in  which  the  contracts  sued  on  have 
been  to  marry — to  teach  an  apprentice — to  render  services  as  an 
author,  or  as  a  doctor  or  a  lawyer — such  as  will  be  determined  by 
the  very  nature  of  the  services  to  be  rendered  or  the  skill  requisite 
to  perform  them,  to  the  exclusion  of  all  thought  of  performance 
l>v  any  other  person  than  the  contracting  party. 


524  EFFECT   OF    CONTRACT. 

But  still  this  is  so,  even  in  contracts  of  that  nature,  because  the 
law  implies  such  to  have  been  the  intention  of  the  parties,  and  for 
that  reason,  and  that  alone,  construes  them  to  be  personal  con- 
tracts, and  takes  them  out  of  the  general  rule. 

Now  if  such  be  the  consequence  of  an  implied  intention  of  the 
parties,  how  much  more  should  it  follow  in  the  case  of  a  contract, 
in  which  they  have  clearly  manifested  a  purpose  to  treat  their 
contract  as  personal,  and  the  very  circumstances  surrounding  them 
forbid  that  any  other  construction  should  be  put  upon  it? 

Here,  the  contract  on  the  part  of  the  defendant's  intestate  was 
that  he  would  administer  to  the  comfort  of  his  father  and  mother 
during  their  lives,  and  would  see  that  they  were  provided  for ;  and 
further,  that  he  would  jointly  occupy  with  them  their  home,  and 
he  and  his  family  become  members  of  their  family;  thus,  every 
feature  of  it  depending  upon  the  relation  which  he,  as  a  near  kins- 
man, bore  to  them,  and  upon  the  confidence  which  they  reposed 
in  him  personally. 

It  is  to  be  observed,  moreover,  that  the  contract  was  an  entire 
one,  to  be  performed  by  the  administrator  in  whole  or  not  at  all. 
If  bound  to  maintain  them,  and  see  to  their  comfort,  he  must 
needs  have  had  the  correlative  right  to  demand  admittance,  stran- 
ger though  he  might  have  been,  into  their  home,  that  he  might  be- 
come an  inmate  thereof. 

If  in  the  lifetime  of  all  the  parties  the  defendant's  intestate 
had  sought  to  introduce  a  stranger  into  the  family,  and  through 
his  agency  to  have  performed  the  services  stipulated  to  be  rendered 
by  himself,  can  it  be  supposed  that  the  law  would,  for  one  mo- 
ment, have  tolerated  such  a  course?  and  if  not,  then  should  the 
law,  after  his  death,  furnish  a  substitute  for  him,  in  his  adminis- 
trator, when  he,  himself,  could  not  appoint  one?  We  think  not; 
and  for  the  reason  that  the  parties  to  the  contract,  manifestly, 
never  contemplated  or  intended  that  there  should  be  one. 

Our  conclusion,  therefore,  is  that  so  much  of  said  agreement  as 
imposed  upon  the  defendant's  intestate  the  duty  of  providing  for 
the  plaintiff's  intestate  and  his  wife,  and  of  looking  after  their 
comfort,  was  purely  personal  in  its  nature,  and  inasmuch  as  the 
defendant  could  not  have  enforced  his  right  to  perform,  so  neither 
is  he  liable  to  an  action  for  not  having  done  so. 

There  is  no  error,  and  the  judgment  of  the  court  below  is 

Affirmed. 

General  rule. — "It  has  been  established  from  the  earliest  history  of 
the  law.  that  as  to  all  personal  claims,  such  as  are  founded  upon  any  obliga- 
tion, contract,  debt  or  other  duty,  upon  which  a  testator  might  have  been 
sued  in  his  lifetime,  the  right  of  action  survives  bis  death,  and  is  enforce- 
able against  his  executors."  95 — p.  231,  citing  2  Williams  on  Executors,  sec. 
1557. 

Under  a  contract  for  employment  for  a  specified  time,  the  employee  may 


ASSIGNMENT    OF    CONTRACT.  525 

recover  from  the  personal  representative  as  such  for  the  whole  term,  though 
part  of  the  service  was  rendered  after  the  employer's  death.  Pugh  v.  Baker, 
127—2;  8  Am.  &  Eng.  Encyc,  1008.  In  Shuler  v.  Millsaps,  71—297,  it  was 
held  that  a  cause  of  action  for  breach  of  promise  of  marriage  survived 
against  the  administrator,  and  this  was  sustained  in  Allen  v.  Baker,  86 — 91, 
though  with  some  doubt;  and  this  seems  to  be  in  conflict  with  the  principal 
case  and  the  general  authorities.  Action  for  deceit  in  the  sale  of  a  chattel 
survives,  A — 143.  A  judgment  survives,  as  other  debts;  but  a  judgment  in 
favor  of  a  dead  person  is  irregular,  while  one  against  a  dead  person  is 
voidable,  107 — 52;  99 — 51;  100 — 267.  A  purchase  at  a  sale  under  execution 
issued  before  the  debtor's  death,  but  sold  after,  is  valid,  107 — 705. 

Action  for  assault  in  putting  one  off  the  train  does  not  survive,  but  it 
might  survive  as  a  breach  of  contract  to  carry  him  as  a  passenger,  63 — 238; 
87 — 351 ;  so  with  action  for  mental  anguish  in  telegraph  case,  130 — 299. 
Cause  of  action  for  personal  injury  not  resulting  in  death,  does  not  survive, 
while  for  injury  causing  death  the  administrator  may  sue,  123 — 118;  138 — 
370,  as  he  may  for  injury  to  property,  140 — 533.  The  action  does  not  abate 
in  the  latter  case  by  the  death  of  defendant,  61 — 356. 

Warrant  for  pension  issued  after  the  death  of  the  pensioner  must  be  re- 
turned, 130 — 638.  Unused  mileage  book  goes  to  the  administrator,  and  the 
railroad  is  not  bound  to  transport  the  dead  body  of  the  purchaser  on  it,  135 — 
342.     Action  for  penalty  abates,  139—297. 

The  remedy  of  the  creditor  is  through  the  personal  representative,  118— 
518,  and  action  must  be  by  the  personal  representative,  76 — 377 ;  129 — 30. 
Personal  representative  may  foreclose  a  mortgage  by  sale,  but  could  not 
maintain  an  action  for  foreclosure.  132 — 50,  but  he  can  do  so  now.  Re- 
visal,  1031. 

Heirs  of  vendor  and  vendee  in  contract  for  sale  of  land,  when  parties. 
100 — 267;  Code.  1492;  Revisal,  83.  Surviving  partner  is  proper  person  to 
enforce  and  be  subject  to  firm  contracts.  114 — 22;  114 — 13;  116 — 806;  125 — 
503;  128—110;  129— 247 ;  139— 448 ;  Revisal,  2540-2547. 

For  history  of  legislation  in  regard  to  abatement  of  actions,  see  Tate  v. 
Morehead,  65 — 681.  For  numerous  cases  on  the  subject,  see  23  L.  R.  A.,  707, 
and  note;  Brown  v.  Fairhall.  213  Mass.,  290,  100  N.  E.,  556,  45  L.  R.  A.  (N. 
S.),  349;  Stone  v.  Bayley,  134  Pac,  120,  48  L.  R.  A.  (N.  S.),  429  (support  of 
child)  ;  Wilson  v.  Hinman,  182  X.  Y.,  408,  75  N.  E.,  236,  2  L.  R.  A.  (N.  S.), 
232  (alimony)  ;  Hawkins  v.  Ball,  18  B.  Mon.,  816,  68  A.  D.,  755. 


526  EFFECT    OF    CONTRACT. 


CHAPTER  III. 

Joint  Obligations. 

Sec.  1.  Joint  promisors. 

(208)   GRIER  v.  FLETCHER, 
23  N.  C,  417—1841. 

Ruffin,  C.  J.  This  is  an  action  of  covenant,  brought  against 
Nathan  Fletcher,  Elizabeth  Fletcher,  John  Fletcher,  and  Jacob 
Rhodes,  for  the  breach  of  a  covenant  of  general  warranty,  con- 
tained in  a  deed  of  bargain  and  sale,  made  by  them  to  the  plaintiff. 
The  defendants  pleaded  in  abatement  the  nonjoinder  of  James 
Fletcher,  Elizabeth  Rhodes,  wife  of  the  defendant  Jacob,  and  John 
Pack  and  his  wife,  Mary  Pack,  by  whom  also  the  deed  was  exe- 
cuted jointly  with  the  defendants;  and  to  this  plea,  the  plaintiff 
demurred  generally.     .     .     . 

His  Honor  was  of  opinion  that  the  case  was  not  within  the  Re- 
vised Statutes,  c.  31,  s.  89,  which  authorizes  "in  all  cases  of  joint 
obligations  or  assumptions  of  copartners  or  others,  suits  to  be 
brought  against  the  whole  or  any  one  or  more  of  the  persons  mak- 
ing such  obligations,  assumptions,  or  agreements ;"  but  that  suit 
must  be  brought  against  all  the  covenantors,  or  against  a  single 
one  only.  The  plea  was  therefore  sustained,  and  a  judgment  given 
thereon  for  the  defendants,  from  which  the  plaintiff  appealed. 

As  the  covenant  is,  according  to  its  terms,  joint  and  not  joint 
and  several,  it  would  at  common  law  have  been  necessary  to  sue 
all  the  parties,  or  all  those  living.  It  is,  however,  admitted  by  His 
Honor,  and  properly,  as  we  think,  that  several  actions  would  lie 
against  each  of  the  covenantors.  This  could  only  be  by  force  of 
the  Act  of  1789,  c.  314,  in  the  fourth  section  of  which  it  is  pro- 
vided, first,  that  a  joint  debt  or  contract  shall  survive  against  the 
heir  or  the  executor  of  a  deceased  obligor;  and  secondly,  that  on 
joint  obligations  or  assumptions  of  copartners  or  others,  suits  may 
be  brought  in  the  same  manner  as  if  such  obligations  or  assump- 
tions were  joint  and  several.  It  is  true,  that  under  the  latter 
branch  of  that  act,  an  action  would  only  lie  against  one  or  all  of 
the  joint  contractors,  and  not  against  any  intermediate  number  of 
them.  Bui  it  was  corrected  by  the  Act  of  1797,  c.  475,  s.  2, 
which  forms  the  89th  section  of  chap.  31.  of  Revised  Statutes, 
before   quoted.      Tint    not    only   uses   the   words   "obligations   and 


JOINT    OBLIGATIONS.  527 

assumptions,"    found   in   the   Act   of    1789,   but   adds   the   broader 
term    "agreements;"    and    provides    that    suits    may    be    brought 
"against  the  whole  or  any  one  or  more  of   such  persons  making 
such,"  that  is,  joint  "obligations,  assumptions  or  agreements."     It 
is   thus   quite  apparent   that  this   case  is  within   the  letter  of   the 
statute.     Being  so,  the  act  must,  we  think,  govern  it.     In  inter- 
preting it,  we  can  not  stop  short  of  the  meaning,  which  is  plainly 
imported  by  the  language  of  the  act.     On  the  contrary,  the  Acts  of 
'89  and  '97  have  been  looked  on  as  being  of  the  nature  of  statutes 
for  the  amendments  of  the  law,  and  been  construed  with  the  liber- 
ality to  which  remedial  statutes  are  entitled.     Thus,  in   Smith  v. 
Fagan,  13  N.  C,  298,  it  was,  in  accordance  with  the  previous  de- 
cisions there  cited,  held,  that  a  judgment,  upon  the  death  of  one  of 
the   defendants,   survived,   not  only   against  the  other   defendants, 
but  also  against  the  executor  of  him  who  died,  and  might  be  pro- 
ceeded on  against  them  all  jointly.    So,  if  one  of  these  covenantors 
had  died,  the  same  principle  would  authorize  a  joint  suit  against 
the  survivors,  and  the  executor  or  heir  of  the  dead  one.     It  is  for 
the  benefit  of  the  creditor  and  the  surviving  debtors  that  it  should 
be  so,  and,  indeed,   for  the  representatives  of  the  deceased  party 
also;  since  it  is  well  to  charge,  at  once  and  together,  all  those  who 
may  be  ultimately  charged,  and  without  the  necessity  of  incurring 
the  expense  of  separate  actions.     Now  if  the  case  thus  fall  within 
that  branch  of  the  act,  which  authorizes  a  joint  action,  where  one 
of  the  obligors  or  covenantors  is  dead,  it  would  seem  it  must  fall 
also  within  the  other,  which  allows  an  action  against  any  one  or 
more  of  the  persons  making  "a  joint  agreement,"  omitting  some  of 
the  parties.     There  is  nothing  in  the  nature  of  the  thing  or  in  the 
objects  of  the  acts,  which  would  confine  their  operation  to  con- 
tracts for  the  payment  of  money  merely.     Agreements,  generally, 
are  mentioned,  and  there  have  been  numberless  actions,  like  this, 
brought  on  bonds  with  collateral  conditions,  or  on  joint  covenants 
for  the  performance  of  specific  things,  other  than  the  payment  of 
money.     If  any  covenant  be  within  the  acts,  all  must  be ;  one  being 
as  much  an  agreement  as  another.     If  persons  owning  land  jointly 
or,  in  common,  do  not  mean  to  be  liable  for  each  other,  they  need 
not  be ;   as  they  may  make  several   conveyances,   or  in  the   same 
deed  may  covenant   severally,   each   one    for   himself   and   for   his 
share.     The  judgment  must  be  reversed,  the  demurrer  sustained, 
and  judgment  of  respondeat  ouster. 

Per  Curiam.  Judgment  accordingly. 


528  EFFECT   OF   CONTRACT. 

(209)  RUFTY  v.  CLAYWELL  et  al., 
93  N.  C,  306—1885. 

Civil  action  on  a  note  given  by  the  firm  of  Claywell,  Powell  & 
Co.  Process  was  issued  against  all  three  of  the  defendants,  and 
was  served  on  two,  but  not  on  the  defendant,  Claywell,  and  judg- 
ment was  rendered  by  consent  against  the  two  defendants  for 
$687.  About  two  years  later  the  plaintiff  sued  out  a  summons 
under  sec.  223  of  The  Code,  against  Claywell,  to  appear  at  next 
term,  and  show  cause  why  the  judgment  rendered  against  the 
other  partners  should  not  be  made  absolute  and  bind  him  individ- 
ually. The  defendant  denied  that  he  was  a  partner,  and  set  up 
the  statute  of  limitations  as  a  defense.  His  Honor  was  of  opinion 
that  the  statute  ran  in  favor  of  the  defendant  from  the  date  of 
the  note,  notwithstanding  the  former  action  and  judgment,  and  in- 
structed the  jury  to  return  a  verdict  for  defendant.  The  plaintiff 
appealed. 

Smith,  C.  J.  The  sole  question  presented  in  the  appeal  is 
whether  the  running  of  the  statute  was  arrested  as  to  all  the  part- 
ners by  the  institution  of  the  original  action,  or  continued  for  the 
protection  of  the  appellee,  because  not  prosecuted  by  the  issue  of 
an  alias  summons  against  him. 

The  preceding  section  of  The  Code  makes  separate  provisions 
for  the  prosecution  of  actions  on  liabilities  that  are  joint,  and  lia- 
bilities that  are  several ;  and  it  is  to  the  former  that  the  four  fol- 
lowing sections  apply.  Under  the  rules  of  pleading,  according 
to  our  former  system,  if  the  action  was  upon  a  joint  contract  and 
the  plaintiff  took  judgment  against  a  part  only  of  those  liable, 
there  could  be  no  recovery  in  a  subsequent  suit  against  those 
omitted,  for  the  reason  that  the  contract  was  merged  in  the  judg- 
ment, while  not  being  parties  to  the  judgment,  they  were  not 
bound  by  its  rendition. 

It  was  otherwise  as  to  contracts  that  created  a  several  liability, 
and  to  such,  as  in  case  of  torts,  a  judgment  against  one  or  more, 
left  their  separate  liabilities  in  force,  and  them  exposed  to  a  sub- 
sequent action  in  like  manner  as  if  no  judgment  had  been  ren- 
dered against  the  others. 

To  obviate  the  legal  consequences  of  a  judgment  against  some  of 
the  joint  obligors  in  extinguishing,  through  the  merger,  the  cause 
of  action  against  the  others,  is  the  manifest  purpose  of  this  inno- 
vating legislation  introduced  in  the  new  system  of  pleading  and 
practice.  Such  is  the  view  taken  by  Mr.  Freeman  in  his  work  on 
Judgments,  and  in  our  opinion  it  is  a  correct  view.  Sees.  231, 
233,  234. 


JOINT    OBLIGATIONS.  529 

In  this  State,  contracts  whether  made  by  copartners  or  other 
joint  obligors,  were  made  several  by  statute,  and  the  plaintiff  could 
sue  one  or  more  at  his  election  without  impairing  his  right  to  pro- 
ceed against  the  others  afterwards.  Rev.  Code,  ch.  31,  sec.  84. 
This  enactment  was  not  introduced  in  C.  C.  P.,  and  hence,  the 
principle  governing  contracts  as  construed  at  common  law  being 
restored,  the  necessity  arose  of  providing  the  remedy  contained  in 
The  Code.  The  omitted  section,  which  in  Merwin  v.  Ballard,  65 
N.  C,  168,  was  decided  to  have  been  repealed,  was  enacted  at  the 
session  of  the  General  Assembly  of  1871-72,  ch.  24,  sec.  1,  and 
now  constitutes  sec.  187  of  The  Code. 

The  result  is  to  render  contracts  joint  in  form,  several  in  legal 
effect,  and  to  neutralize,  if  not  displace,  those  provisions  which 
operate  only  upon  contracts  that  are  joint,  and  pursuant  to  which 
the  present  proceeding  is  conducted. 

That  the  contract  possesses  the  twofold  quality  of  being  joint  as 
well  as  several  in  law,  can  not  render  available  provisions  which, 
in  terms,  are  applicable  to  such  as  are  joint  only.  It  is  solely  to 
remove  the  resulting  inconveniences  of  an  action  prosecuted  to 
judgment  against  part  of  those  whose  obligation  is  joint  only,  that 
the  remedy  is  provided,  and  it  becomes  needless  when  the  obliga- 
tion is  several  also.  Such  is  the  construction  adopted  in  the  courts 
of  New  York.  Stannard  v.  Mattin,  7  How.  Pr.,  4;  Lakey  v. 
Kingan,  13  Abb.  Pr.,  192. 

We  are  then  constrained  to  regard  the  issue  of  the  summons 
against  the  appellee  as  the  beginning  of  a  new  suit,  and  the  action 
is  open  to  every  defense  which  could  be  set  up  if  there  had  been 
no  previous  recovery  of  the  other  partners. 

If  sec.  224  is  so  construed  as  to  cut  off  any  defense  which  the 
appellee  might  have,  and,  when  he  has  had  no  day  in  court  and  no 
notice  of  the  suit  against  his  associate  partners,  subject  his  indi- 
vidual property  to  the  payment  of  the  firm  debt,  it  would  be,  to 
say  the  least,  a  harsh  measure,  which  we  should  be  reluctant  to  at- 
tribute to  the  Legislature  as  an  intended  result,  without  a  very 
clear  declaration  of  such  intent  in  the  statute.  It  permits,  in  cases 
where  the  proceeding  may  be  authorized,  the  setting  up  any  de- 
fense that  may  have  arisen  thereto,  "subsequently  to  such  judg- 
ment," and  literally,  such  would  be  the  statutory  bar  that  since 
became,  and  was  not  when  that  action  began,  a  defense.  But  it  is 
not  necessary  to  pass  upon  this  point. 

There  is  no  error,  and  the  judgment  must  be  affirmed. 

See  also  Davis  v.  Sanderlin,  119 — 84;  Koonce  v.  Pelletier,  115 — 233. 

At  common  law  joint  contracts  rendered  each  one  liable  for  the  whole 
debt,  but  they  were  jointly  liable  and  all  had  to  be  sued;  in  case  of  death 
the  liability  rested  upon  the  survivor ;  and  a  release  of  one  by  the  obligee 
released  all.     The  joint  obligees  were  entitled  jointly,  all  had  to  join  in  the 


530  EFFECT    OF    CONTRACT. 

suit,  and  there  was  survivorship.  In  several  contracts,  the  liability  was  sep- 
arate, and  they  could  not  be  sued  jointly;  and  the  several  obligees  had  to  sue 
separately.  In  joint  and  several  contracts,  the  obligee  could  sue  all  jointly, 
or  each  one  separately,  but  not  otherwise.  Brown  v.  Clary,  2 — 107;  Wil- 
liamson v.  Chiles,  27—244;  6  R.  C.  L.,  879,  880;  Clark  Cont,  379,  383,  384. 

Bv  statutory  changes  all  joint  contracts  are  now  joint  or  several.  Re- 
visal,  413,  455-458;  Clark's  Code,  sees.  187,  222-225.  As  to  several  contracts, 
Revisal,  412;  Clark's  Code,  sec.  186.  On  joint  contracts,  see  also  23—389, 
32—55,  32—195,  112—253.  The  joint  liability  of  common  carrier,  lessor  and 
lessee.     Carleton  v.  R.  R..  143—43. 

Sec.  2.  Joint  promisees. 

(210)   RICHARDSON  et  al.  v.  JONES  ct  al, 
23  X.  C,  296—1840. 

Daniel,  J.  This  was  an  action  for  debt  on  a  specialty;  plea, 
non  est  factum.  The  plaintiffs  declared  on  a  bond  dated,  on  the 
16th  of  April,  1823,  for  the  sum  of  £3,500,  made  and  executed  to 
William  Ricbardson  and  John  Wall,  as  obligees.  In  the  trial, 
the  plaintiffs,  to  snpport  their  declaration,  offered  in  evidence  a 
bond  for  the  same  sum  and  date,  but  executed  by  the  defendants 
to  the  said  William  Richardson  and  John  Wall,  Esqrs.,  "and  the 
rest  of  the  justices  assigned  to  keep  the  peace  for  Rutherford 
County,"  "to  be  paid  to  the  said  William  Richardson  and  John 
Wall."  The  reading  of  this  bond  in  evidence  was  objected  to,  as 
it  appeared  to  be  a  bond  to  more  joint  obligees,  than  the  one  de- 
clared on  professed  to  be.  The  court  rejected  the  evidence;  and 
the  plaintiffs  were  nonsuited  and  appealed. 

If  the  obligors,  on  a  breach  of  the  bond,  had  paid  to  Richardson 
and  Wall,  it  would  have  been  a  good  satisfaction  and  discharge. 
But  if  the  obligors  failed  to  pay  as  it  is  alleged  they  did,  then  the 
instrument  offered  in  evidence  informs  us  that  the  obligors  have 
contracted,  under  their  seal,  with  several  other  obligees  besides 
Richardson  and  Wall.  Those  other  obligees  are  not  made  parties 
plaintiffs  in  the  declaration;  nor  is  there  any  averment  in  the  dec- 
laration that  they  are  dead,  so  as  to  enable  Richardson  and  Wall 
to  sue  as  survivors.  In  actions  ex  contractu,  the  omission  to  join 
as  plaintiffs  in  the  writ  and  declaration  of  all  those  that  ought  to 
be  joined  (viz.,  all  the  obligees  who  are  alive),  may  be  taken  ad- 
vantage of  on  the  trial  under  the  general  issue.  The  contract  and 
obligation  were  made  to  others  besides  Richardson  and  Wall.  The 
words  in  the  contract  "to  be  paid  to  the  said  Richardson  and 
Wall,"  do  not  restrict  the  legal  force  of  the  deed  to  those  two 
only;  but  as  the  contract  is  made  jointly  with  all  the  named 
obligees,  all  must  join  as  plaintiffs  in  the  action.  The  plaintiffs 
could  have  averred  in  their  declaration,  who  were  justices  at  the 
date   of    the   bond    and    have   made   them    parties    plaintiffs.      And 


JOINT    OBLIGATIONS.  531 

they  could,  and  ought  to  have  averred  the  death  of  any  of  the 
obligees,  if  any  had  died  since  the  date  of  the  bond,  to  enable  the 
survivors  to  sue  and  maintain  the  action.  The  bond  offered  in 
evidence  was  a  different  one  from  that  described  in  the  declaration, 
and  it  was  properly  rejected  by  the  court.  The  judgment  must  be 
affirmed. 

Per  Curiam.  Judgment  below  affirmed. 

An  action  against  one  of  two  or  more  joint  obligors  might  he  defeated  at 
common  law  by  a  plea  in  abatement:  changed  now  so  as  to  make  joint 
obligors  "joint  or  several."  An  action  by  one  of  two  or  more  joint  o  ligees 
was  fatally  defective.  Von  Glahn  v.  Harris,  73 — p.  332.  It  is  a  general  rule 
that  in  all  suits  relating  to  partnerships  all  the  partners  are  necessary  parties, 
either  plaintiffs  or  defendant.  Heaton  v.  Wilson,  123 — 35&.  Surviving  part- 
ner has  the  right  to  sue  and  settle  all  partnership  affairs.  Revisal,  2540, 
et  seq. 

For  regulation  as  to  parties  under  the  present  practice,  see  Revisal,  409, 
410;  Clark's  Code,  sees.  183,  239  (4);  Stewart  v.  Price,  64  Kan.,  191,  64  L. 
R.  A.,  581. 

Sec.  3.  Release  of  one  party. 

(211)    SCOTT  v.  HARRIS, 

76  X.  C,  205—1877. 

Civil  action  on  a  note.  The  defendants,  sureties,  resisted  the 
payment  on  the  ground  that  the  plaintiff,  for  a  valuable  considera- 
tion, had  agreed  with  the  principal  to  forbear  collection  for  a 
specified  time;  that  they  had  no  knowledge  of  such  agreement, 
and  that  the  plaintiff's  rights  against  them  were  not  reserved. 
There  was  a  verdict  and  judgment  for  defendants,  and  plaintiff 
appealed. 

Reade,  J.  There  is  sympathy  for  a  child  who  in  reaching  too 
far  for  a  flower  falls  over  the  brink  and  is  lost ;  but  a  creditor 
who  clutches  eighteen  percent  from  the  principal  debtor  under  a 
contract  for  indulgence  until  he  goes  into  bankruptcy  and  then 
reaches  further  to  collect  the  principal  money  out  of  the  sureties, 
deserves  a  fall. 

As  soon  as  a  debt  is  due  and  payable,  if  the  principal  debtor 
does  not  pay  it,  the  surety  may  pay  it  and  immediately  sue  the 
principal  for  money  paid  to  his  use.  If,  therefore,  the  creditor 
agrees  with  the  principal  debtor  in  such  a  manner  as  that  he  is 
bound  by  the  agreement  to  postpone  the  day  of  payment,  he  puts 
it  out  of  the  power  of  the  surety  to  pay  the  debt  and  sue  the  prin- 
cipal, and  he  thereby  puts  the  surety  in  jeopardy.  And  the  surety 
being  no  party  to  the  new  contract  for  indulgence  is  discharged 
from  all  liability. 

The  facts  in  this  case  show  the  propriety  of  that  rule. 


532  EFFECT    OF    CONTRACT. 

At  the  maturity  of  the  bond  the  principal  debtor  offered  to  pay 
it;  but  the  creditor  offered  to  forbear  the  collection  of  the  bond 
for  twelve  months  if  the  debtor  would  pay  him  in  advance  one 
and  a  half  percent  a  month  for  the  whole  time.  And  the  debtor 
agreed  to  it  and  gave  his  separate  note  for  the  amount,  to  be  paid 
in  goods,  some  of  which  were  paid.  The  sureties  knew  nothing 
of  this  and  supposed  the  debt  was  paid  until  some  time  afterwards 
and  before  the  time  of  forbearance  had  expired,  when  the  principal 
debtor  went  into  bankruptcy  and  they  learned  the  debt  had  not 
been  paid. 

Admitting  the  rule  to  be  as  stated,  still  the  plaintiff  insists  that 
the  sureties  are  not  discharged  because  his  agreement  with  the 
principal  debtor  was  not  a  valid  contract,  and  therefore  he  was 
not  bound  by  it,  in  this:  that  the  exacting  of  one  and  one-half 
percent  a  month  was  usurious  and  invalid.  It  is  not  for  the  cred- 
itor to  say  that.  His  conscience  takes  fright  at  a  danger  which 
may  never  approach  him.  The  debtor  may  plead  usury  or  not  at 
his  pleasure,  and  unless  and  until  he  does  so  the  note  which  was 
given  for  the  usury  is  valid,  and  a  part  of  it  has  already  been  paid 
in  goods.  The  contract  was  sufficient  to  prevent  the  sureties  from 
paying  the  debt  and  suing  the  principal.  And  that  is  the  wrong 
of  which  they  have  a  right  to  complain. 

But  again,  the  plaintiff  insists,  that  admitting  that  he  did  agree 
to  forbear  collecting  the  debt  out  of  the  principal  debtor,  yet  he 
reserved  the  right  to  collect  it  out  of  the  sureties ;  and  that,  there- 
fore, they  were  not  delayed,  for  they  might  have  paid  the  debt 
and  sued  the  principal,  although  he  could  not. 

The  jury  have  found  that  the  plaintiff  did  not  expressly  reserve 
that  right.  And  then  the  plaintiff,  as  a  last  resort,  says  that  al- 
though he  did  not  expressly  reserve  the  right,  yet  he  reserved  it 


"in  his  mind 


If  such  a  pretense  be  not  too  puerile  to  notice  at  all,  it  is  suffi- 
cient to  say,  that  the  contract  with  the  principal  debtor  was  what 
passed  between  them,  and  not  what  was  "reserved  in  his  own 
mind." 

Per  Curiam.  No  error — Judgment  affirmed. 

If  A  and  R  execute  a  joint  and  several  note,  a  judgment  against  A  is  no 
bar  to  an  action  against  B  on  the  same  note,  but  a  satisfaction  of  the  debt 
by  A  would  be  a  discharge  to  B,  and  a  partial  satisfaction  is  a  discharge 
pro  tanto.  Hix  v.  Davis,  68—231;  Bank  v.  Lumber  Co.,  123—24.  See  Bank 
v.  Lineberger,  83 — 454. 


JOINT    OBLIGATIONS.  533 

(212)   SMITH  v.  RICHARDS, 
129  N.  C,  267,  40  S.  E.,  5—1901. 

Civil  action,  in  which  there  was  a  judgment  for  the  defendants, 
and  the  plaintiff  appealed. 

Furches,  C.  J.  This  is  an  action  against  several  defendants 
upon  a  former  judgment  for  seven  hundred  and  odd  dollars — be- 
ing the  amount  of  costs  in  an  action  against  the  plaintiff,  in  which 
these  defendants  (plaintiffs  in  that  action)  had  failed,  and  judg- 
ment was  entered  against  them  and  in  favor  of  the  plaintiff  in 
this  action.  Since  the  rendition  of  said  judgment,  two  of  the 
defendants  have  paid  the  plaintiff  their  aliquot  parts,  and  the 
plaintiff  gave  them  separate  receipts  therefor,  as  follows :  "Re- 
ceived of  W  S.  Richards  ninety-two  94-100  dollars,  for  one-sixth 
the  costs  in  a  judgment  rendered  in  the  case  of  J.  B.  Richards 
et  al.  v.  J.  B.  Smith,  at  Spring  Term  of  the  Superior  Court, 
March,  1889.  This  is  to  release  W.  S.  Richards  in  full  of  the 
costs  of  suit  above  mentioned.  This  28th  day  of  December,  1896. 
(Signed)  John  B.  Smith."  The  other  receipt,  to  Fannie  Rut- 
ledge  and  husband,  J.  L.  Rutledge,  is  the  same  in  substance  as 
the  above. 

All  the  parties  against  whom  judgment  was  rendered  in  the  for- 
mer action  are  made  defendants  in  this  action ;  and  the  defend- 
ants, W.  S.  Richards  and  Fannie  Rutledge,  and  her  husband,  J.  L. 
Rutledge,  did  not  plead.  But  the  other  defendants  answered  and 
set  up  the  above-mentioned  receipt  as  a  release  and  discharge  of 
them  from  any  liability  on  said  judgment.  This  presents  the  only 
question  in  the  case. 

It  seems  that,  originally,  contribution  between  co-obligors  was 
held  to  rest  upon  a  moral  obligation  only,  and  courts  of  equity 
alone  could  enforce  it.  Moore  v.  Isley,  22  N.  C,  372.  But,  at  a 
later  date,  courts  of  law  in  many  jurisdictions  considered  it  a  joint 
obligation  in  the  nature  of  a  contract,  and  actions  at  law  were  sus- 
tained when  they  were  to  recover  only  an  aliquot  part.  Parsons 
on  Cont.  (3  Ed.),  34  and  35.  But  where  more  than  this  was  de- 
manded on  account  of  insolvency,  or  for  other  cause,  it  still  re- 
mained a  matter  for  the  courts  of  equity,  as  courts  of  law  could 
not  adjust  equities  between  the  parties.  But  it  seems  probable  the 
courts  of  law  in  this  State  still  declined  to  take  jurisdiction  of 
matters  of  contribution,  as  we  find  that  in  1807  the  Legislature 
passed  an  act  authorizing  co-sureties  to  bring  actions  on  the  case 
in  assumpsit  for  contribution.  Sherrod  v.  Woodard,  15  N.  C, 
360,  25  Am.  Dec,  714;  sec.  2094  of  The  Code.  But  this  act  only 
applied  to  co-sureties,  and,  it  would  seem,  left  the  law  as  to  co- 


534  EFFECT    OF    CONTRACT. 

principals  as  before  its  passage.  And  whether  this  remained  so  or 
not,  under  the  divided  jurisdiction,  it  is  now  so  under  the  Consti- 
tution of  1868  and  The  Code.  Russell  v.  Adderton,  64  N.  C,  417; 
Dudley  v.  Bland,  S3  N.  C,  220;  Craven  v.  Freeman,  82  N.  C, 
361.  The  rights  of  the  parties  may  now  be  administered,  whether 
legal  or  equitable  in  their  nature.  Russell  v.  Adderton  and  Dud- 
ley v.  Bland,  supra.  And  the  rights  of  the  defendants,  as  be- 
tween themselves,  may  be  adjusted  and  settled  in  an  action  against 
them.     Parrish  v.  Graham,  at  this  term   (129  N.  C,  230). 

This  is  not  an  action  for  contribution ;  that  right  does  not  arise 
at  law  or  in  equity  until  the  obligor  has  paid  the  money.  And 
none  has  been  paid  in  this  case  by  either  of  the  defendants  who 
are  contesting  the  plaintiff's  right  to  recover.  But  the  doctrine  of 
contribution  is  involved,  and  it  was  necessary  to  consider  it  in  de- 
termining the  rights  of  the  parties. 

The  defendants  contend  that  the  payments  of  W.  S.  Richards 
and  Rutledge  and  wife,  and  their  discharge,  was  a  discharge  of 
them.  It  was  admitted  by  defendant  that  the  "receipt"  was  not  a 
release,  as  it  was  not  under  seal.  But  it  was  ingeniously  argued 
that  the  reason  that  a  partial  payment  and  receipt,  stating  that  it 
was  in  full,  were  not  a  discharge,  was  because  there  was  no  con- 
sideration to  support  it  beyond  the  amount  paid ;  and  that  it  was 
nudum  pactum  for  all  above  the  amount  paid ;  whereas,  a  similar 
receipt  under  seal  would  be  a  discharge,  because  the  seal  imported 
a  consideration.  And  it  was  argued  that  the  Act  of  1874-5  (sec. 
574,  of  The  Code),  supplied  the  consideration,  and  a  receipt  now 
for  a  part  was  as  effective  as  if  it  was  under  seal.  This  is  so  in 
cases  where  the  statute  applies,  but  it  seems  to  have  no  applica- 
tion to  this  case. 

The  receipt  does  not  seem  to  have  been  intended  as  a  compromise 
of  the  whole,  nor  of  any  part  of  the  debt.  It  was  a  payment  in 
full  of  the  defendants'  aliquot  parts  of  the  judgment,  and  a  dis- 
charge of  the  parties  paying  it  from  any  further  liability.  And 
as  these  defendants  are  discharged  from  paying  anything  more,  it 
is  a  discharge  of  the  other  four  defendants  from  any  liability  be- 
yond their  aliquot  parts — one-sixth  each.  For,  as  plaintiff  could 
recover  nothing  more  out  of  W.  S.  Richards  and  Rutledge  and 
wife,  these  four  defendants  could  recover  nothing  more  out  of 
them,  as  tbeir  rights  depend  upon  the  rights  of  the  plaintiff,  Smith, 
and  their  right  of  subrogation. 

We  do  not  feel  called  upon  to  enter  into  a  further  discussion  of 
the  principles  governing  this  case,  as  they  have  been  so  fully  dis- 
cussed in  Russell  v.  Adderton  and  Craven  v.  Freeman,  supra,  and 
especially  in  Dudley  v.  Bland,  supra. 

It  therefore   follows  that  the  plaintiff,  Smith,  is  not  entitled  to 


JOINT    OBLIGATIONS.  3j:5 

judgment  in  solido  against  all  the  defendants;  nor  is  he  entitled  to 
such  judgment  for  the  unpaid  balance  against  the  four  defendants 
who  have  paid  him  nothing  on  his  former  judgment;  but  that  he 
is  entitled   to   a   judgment   or  decree  against  them   separately   for 
their  aliquot  parts,  that  is,  against  John  Richards   for  one-sixth, 
Sarah  Summerrow  and  her  husband,  H.  M.  Summerrow,  for  one- 
sixth,   Elizabeth  Jenkins  and  husband,   for  one-sixth,  and  George 
Richards   for  one-sixth.     No  right  of  contribution  exists  between 
them  upon  said  judgment,  nor  is  either  of  these  defendants  liable 
to  the  plaintiff  for  anything  more  than  his  judgment  for  the  said 
one-sixth  of  the  original  debt. 

There  is   error,  and  the  judgment   should  be  entered  as   above 

indicated.  Error- 

If  the  creditor  make  any  change  in  the  relations  of  the  surety  so  as  to 
affect  his  rights,  as  by  release,  parting  with  securities,  or  a  valid  contract  to 
forbear  collection  against  the  principal  without  the  knowledge  ot  the  surety 
and  without  reserving  his  rights  against  the  surety,  the  latter  is  discharged, 
either  [>ro  tanto  or  entirely.  In  addition  to  the  cases  cited  in  the  cases 
above,  see  Cooper  v.  Wilcox.  22-90;  Stirewaltv  Martin  84-4;  Bank  v. 
Lineberger,  85-454;  Carter  v.  Duncan,  84-677;  Forbes  v.  SJieppard,  98-11  . 
Hollingsworth  v.  Tomlinson,  108-245;  Scott  v.  Fisher  110-311;  Fell  v. 
Howerton.  111-69;  Chemical  Co.  v.  Pegram.  112-614;  I  linton  v._  Green  eat, 
113-6;  Jordan  v.  Speirs,  113-344;  Sutton  v.  Walters,  1 18-493 ;  ban  v. 
Sumner  119-591;  Jenkins  v.  Daniels,  125—161;  Smith  v.  Parker  131—471, 
Revell  v.  Thrash,  132—803  ;  Draughan  v.  Eunting,  31—10 ;  mere  fori  earance 
to  sue  does  not  release.     40—91. 

A  covenant  not  to  sue  one  of  two  joint  debtors  does  not .discharge  the 
other,  while  a  release  would  discharge.  Winston  v.  Dalby,  64—299;  but  it 
would  discharge  a  surety.     Evans  v    Raper.  74— 639.  . 

The  defense  on  account  of  extension  ot  time  may  be  waived  in  the  note. 
Bank  v.  Couch,  118—436;  and  even  by  a  married  woman,     bitts  v.  Lrrocen 

Co.,  144 — 463.  „„    ,         0    „         ^  -qq    ,» 

As   to   discharge   of   surety   generally,   see  2/    Am.   &   Eng.    Encyc.   489   et 

>CThe  rigln'of   surety  to  contribution,   see  further,   Powell  v.   Mathis    26- 

83-   Allen  v.   Wood,  38-386;   Hall  v.   Robinson,  30-56;   Adams   v.   Hayes 
P0-383-   Comrs.   v.   Dorsett,   151-307;   the   liability   is  in   proportion   to   the 
obligations   signed   by   each.     Jones   v.   Blanton.  41-115;    Hughes  J    Boone, 
gl_?04  •  38—502.     When  two  sureties  engage  in  a  common  risk,  and  alter 
wards  one  takes  an  indemnity,  it  inures  to  the  benefit  ot  both.     15-^M  J  -»' 
?33-  but  not  if  taken  before.     131-501.     The  surety  may  require  his  principal 
to  exonerate  him.  and  may  retain  funds  of  insolvent  principal  in  his  hands, 
even   against   an    assignee    for   value   and    without   notice       16-lbl      }'— ^- 
The  assignment  of  a  judgment  for  the  benefit  of  a  surety  keeps  *  alive  as 
to  the  principal  but  not  as  to  cosurety.     Jones  v    McKmnon    87-294.  Uit  it 
seems  to  apply  also  as  to  cosurety  in  Peebles  v    Gay, _  11 5-^8. 

Suretv  paying  the  debt  has  a  right  to  be  subrogated  to  the  right  oi  the 
creditor,  as  to  any  security  in  his  hands  York  y^  Landis  65-535,  see  also, 
q7_212  -  93-358;  113-197;   123-168;  Tripp  v.  Harris,  154—296. 

Some  of  the  rghts  of  the  suretv  are  regulated  by  statute,  Revisal,  2840- 
?848  as  the  right  to  how  that  he  is  surety,  to  have  the  property  of  the  prin- 
dpal  first  taken,  to  proceed  against  the  principal,  to  notify  he  credi tor  a.  id 
have  him  proceed  against  the  principal  or  the  surety  will  ^^r^nJt^ 
contribution,  and  to  be  subrogated  to  the  rights  of  the  creditor  of  an  estate. 


536  EFFECT    OF    CONTRACT. 


CHAPTER  IV. 
Interpretation  and  Construction. 
Sec.  1.  Evidence  of  the  contract. 

1.  Oral  agreements. 

(213)   SPRAGINS  v.  WHITE, 
108  N.  C,  449,  13  S.  E,  171—1891. 

Civil  action  by  the  plaintiffs  to  recover  the  price  of  certain 
shoes  alleged  to  have  been  sold  to  the  defendants.  The  defendants 
denied  the  allegations  of  the  complaint,  and  alleged  that,  by  special 
agreement,  the  plaintiffs  promised  to  sell  and  deliver  to  them  cer- 
tain shoes  at  their  place  of  business  within  two  weeks,  which  they 
failed  to  do ;  that  they  were  not  bound  to  receive  the  shoes,  and 
did  not  do  so. 

The  court  directed  the  attention  of  the  jury  to  the  evidence,  and 
among  other  things  said,  "If  you  should  believe  this  agreement 
and  bargain  were  made,  then  you  must  inquire  and  determine 
what  was  meant  and  understood  by  it  by  the  parties  making  it." 
The  defendant  excepted  on  the  ground  that  "the  court  erred  in 
leaving  the  interpretation  of  the  contract  to  the  jury."  There  was 
a  verdict  and  judgment  for  the  plaintiffs,  and  the  defendants  ap- 
pealed. 

Shepherd,  J.  "Where  a  contract  (says  Judge  Gaston  in  Young 
v.  Jeffreys,  20  N.  C,  357),  is  wholly  in  writing,  and  the  intention 
of  the  framers  is  by  law  to  be  collected  from  the  document  itself, 
then  the  entire  construction  of  the  contract — that  is,  the  ascertain- 
ment of  the  intention  of  the  parties,  as  well  as  the  effect  of  that 
intention,  is  a  pure  question  of  law ;  and  the  whole  office  of  the 
jury  is  to  pass  on  the  existence  of  the  alleged  written  agreement. 
Where  the  contract  is  by  parol  (that  is,  oral),  the  terms  of  the 
agreement  are,  of  course,  a  matter  of  fact,  and  if  those  terms  be 
obscure,  or  equivocal  or  are  susceptible  to  explanation  from  ex- 
trinsic evidence,  it  is  for  the  jury  also  to  find  the  meaning  of  the 
terms  employed  ;  but  the  effect  of  a  parol  agreement,  when  its 
terms  are  given  and  their  meaning  fixed,  is  as  much  a  question  of 
law  as  the  construction  of  a  written  agreement." 

Tn  speaking  of  oral  contracts,  Nash,  J.,  remarks  in  Festerman  v. 


INTERPRETATION    AND    CONSTRUCTION.  537 

Parker,  32  N.  C,  474,  that  "if  there  be  no  dispute  as  to  the  terms 
and  they  be  precise  and  explicit,  it  is  for  the  court  to  declare  their 
effect."  See  also  Rhodes  v.  Chesson,  44  N.  C,  336;  Pendleton  v. 
Jones,  82  N.  C,  249. 

"Unless  this  were  so  (says  Park,  B.,  in  Neilson  v.  Hartford,  8 
M.  &  \Y.,  806),  there  would  be  no  certainty  in  the  law;  for  a 
misconstruction  by  the  jury  can  not  be  set  right  at  all  effectually." 
We  are  sure  that  the  learned  judge  was  entirely  familiar  with  the 
above  principles,  but  we  think  that  they  are  not  properly  applied 
in  the  present  case. 

The  terms  of  an  oral  contract  must  necessarily  be  ascertained 
from  the  testimony  of  the  witnesses,  and  it  is  the  duty  of  the  court 
to  instruct  the  jury  as  to  the  law  applicable  to  the  various  phases 
arising  upon  such  testimony.     But  where  the  court  presents  to  the 
jury  a  particular  view  of  the  facts,  and  this  embodies  the  terms  of 
a  contract  which  are  in  themselves  precise  and  explicit,  the  court 
should  declare  their  legal  effect,  and  it  would  be  error  to  leave 
this  to  be  determined  by  the  jury.     In  such  a  case  the  rule  is  the 
same  as  if  the  contract  were  in  writing.     After  charging  the  jury 
upon  the  testimony  of  the  plaintiffs,  His  Honor  presented  the  con- 
tention of  the  defendants,  which  was  founded  upon  the  evidence 
of  one  of  their  number,  as  follows :     "I  agreed  to  buy  of  him  [the 
agent  of  the  plaintiffs]   a  bill  of  shoes  upon  his  promise  to  have 
them  in  Aulander  in  two  weeks."     According  to  the  defense  this 
was  the  entire  agreement  as  to  the  shipment  and  delivery,  and  it  is 
not  varied  in  any  manner  because  it  induced  the  defendant  to  pur- 
chase the  goods.     It  was  the  contract  resulting  from  the  ''express 
bargain  and  agreement"  that  formed  the  inducement,  and  it  is  this 
contract  alone  that  was  to  be  interpreted.     The  language  used  is 
clear  and  precise.     It  is  not  unusual  or  equivocal ;  nor  does  it  in- 
volve any  scientific  exposition  by  experts,  nor  is  it  doubtful  in  any 
sense  that  it  may  be  explained  by  evidence  of  usage  or  other  ex- 
traneous circumstances.   If  the  language,  being  thus  free  from  am- 
biguity, leaves  the  meaning  of  the  parties  in  doubt,  it  is  the  duty 
of  the  court,  and  not  the  jury,  to  determine  its  legal  effect;  and  if 
no  definite  meaning  can  be  attached  to  such  language,  then  it  is  the 
duty  of  the  court  to  so  hold.     Silverthorn  v.  Fowle,  49  N.  C,  362. 
His'  Honor,  after  stating  the  terms  of  the  contract,  instructed  the 
jury  that  if  such  was  the  contract,  they  must  further  inquire  and 
determine  what  was  meant   and  understood  by  it  by  the  parties 
making  it.    Now  the  charge  assumes  that  the  terms  of  the  contract 
are  ascertained,  but  at  the  same  time  leaves  its  interpretation  to 
the  jury.    The  court  should  have  interpreted  this  meaning  accord- 
ing to  the  terms  of  the  assumed   contract   and  not  according  to 


538  EFFECT    OF    CONTRACT. 

absent  terms  incorporated  into  the  same  by  what  the  jury  were  to 
infer  was  the  meaning  of  the  parties.     In  this  we  think  there  was 

Error. 
Merrimon,  C.  J.,  files  a  dissenting  opinion. 

See  also  68— p.  140;  20—297;  24—170;  66—596:  82—249:  140—52.  Young 
v.  Jeffreys,  20—357. 

2.  Written   agreements. 

1.    AS    TO    THE    EXECUTION    OF    THE    INSTRUMENT. 

(214)   JONES  v.  BLOUNT, 
2  N.  C,  238—1795. 

Action  of  debt  upon  a  bond  for  five  hundred  and  twenty-six 
pounds.  Defendant  pleaded  setoff,  and  produced  two  old  bonds, 
one  dated  in  1760,  and  the  other  in  1768,  both  attested;  the  attest- 
ing witness  to  one  of  them  was  dead,  and  defendant  was  unable 
to  prove  her  handwriting.  The  plaintiff  objected  to  proof  of  the 
handwriting  of  the  obligor. 

Per  Curiam.  Williams  and  Haywood.  The  law  only  requires 
the  best  evidence  the  party  has  in  his  power.  The  subscribing  wit- 
ness must  be  produced  when  there  is  one;  if  he  is  dead,  proof  of 
his  handwriting  may  be  admitted  ;  and  if  the  handwriting  of  the 
witness  can  not  be  proven,  then  proof  of  the  handwriting  of  the 
obligor  may  be  received ;  this  affording  strong  evidence  that  the 
obligor  meant  to  make  himself  chargeable  by  that  signature.  And 
the  defendant  in  the  present  case  was  permitted  to  prove  the  hand- 
writing of  the  obligor. 

The  above  is  the  rule  of  the  attesting  witness.  For  other  cases,  see 
Rlackwell  v.  Lane.  20 — 245:  McKinder  v.  Littlejohn.  23 — 66;  Carrier  v.  Hamp- 
ton, 33—307;  Davis  v.  Higgins,  91—382:  Howell  v.  Rav,  92—510:  Angier  v. 
Howard.  94— 27 :  Bright  v.  Marconi,  121—86.  Revisal,  1604,  provides,  "It 
shall  not  1  e  necessary  to  prove  by  the  attesting  witness  instruments  to  the 
validity  of  which  the  attestation  is  not  required,  and  such  instruments  may 
be  proved  by  admission  or  otherwise  as  if  there  had  been  no  attesting  wit- 
ness :  Provided,  that  this  section  shall  not  affect  the  method  and  manner  of 
proving  instruments  for  registration."     Lockhart's  Handbook  of  Ev.,  sec.  79. 

(215)   LUTZ  v.  THOMPSON, 
87  X.  C,  334—1882. 

Civil  action  begun  before  a  justice  of  the  peace,  carried  by  ap- 
peal to  the  Superior  Court,  and  thence  to  the  Supreme  Court  upon 
exception  for  the  exclusion  of  certain  evidence  offered  by  the  de- 
fendant. 

The  action  was  brought  on  a  bond  for  $16.11,  given  by  the  de- 
fendant  to  the  feme   plaintiff,   expressed  to  be    for  "real   estate." 


INTERPRETATION     AND    CONSTRUCTION.  539 

The  defendant  admitted  the  execution  of  the  bond,  but  offered  in 
evidence  another  paper  purporting  to  be  a  general  scheme  for  the 
settlement  of  an  estate  in  which  the  feme  plaintiff,  the  wife  of  the 
defendant,  and  others  were  interested,  and  proposed  to  show  that 
the  bond  and  the  other  paper  were  executed  as  a  part  of  one  trans- 
action, and  that  they  were  not  to  have  effect  until  the  last  paper 
was  signed  by  all  the  parties ;  that  some  of  the  parties  had  re- 
fused to  sign  the  paper,  and  the  agreement  was  never  completed. 
The  court  excluded  the  evidence;  there  was  a  verdict  and  judg- 
ment for  the  plaintiffs,  and  defendant  appealed. 

RuFFin,  J.  In  the  opinion  of  this  court,  the  evidence  of  the 
defendant  was  improperly  excluded.  Not  that  he  could  by  parol 
annex  to  his  bond  a  condition  which  upon  its  face  it  did  not  bear, 
or  avail  himself,  in  the  present  state  of  the  pleadings,  of  a  failure 
in  the  consideration  ;  but  upon  the  ground  that  the  evidence  tended 
to  show  that  the  contract,  of  which  the  bond  sued  on  constitutes 
only  a  part,  is  still  incomplete  ;  or  rather  to  establish  the  fact  that, 
instead  of  a  contract,  the  stipulations  between  the  parties  amounted 
only  to  a  proposed  contract,  which  has  never  acquired  the  force 
of  an  agreement,  and  consequently  can  not  be  enforced  as  a  whole, 
because  of  the  subsequent  dissent  of  the  necessary  parties. 

Taking  the  testimony  to  be  true,  it  is  plain  that  the  parol  agree- 
ment made  by  the  plaintiff  in  July,  1876,  and  the  bond  then  given 
by  the  defendant,  were  but  parts  of  a  general  scheme  for  the  set- 
tlement of  their  ancestor's  estate,  and  were  never  intended  or  ex- 
pected by  the  parties  to  stand  as  separate  and  independent  trans- 
actions ;  and  it  would  be  evidently  unjust  to  enforce  one  part  of 
that  scheme  and  leave  other  parts  unfulfilled.  See  Bell  v.  Bowers, 
4  Cold  well  (Tenn.),  311.     .     .     .  Venire  de  novo. 

(216)  PRATT  v.  CHAKFIN, 

136  N.  C,  350,  48  S.  E.,  768—1904. 

Action  by  plaintiff  for  goods  sold  and  delivered  under  a  printed 
order  signed  by  the  defendant  for  the  firm  of  which  he  was  a 
member.  The  court  allowed  the  defendant  to  prove  that  the  order 
was  given  with  the  understanding  that  it  was  not  to  be  in  effect 
unless  approved  by  the  other  member  of  the  firm,  and  he  did  not 
approve  it.  There  was  a  judgment  for  the  defendant  and  plaintiff 
appealed.  Affirmed. 

Connor,  J.  The  exception  of  the  plaintiffs  is  based  upon  the 
theory  that  the  testimony  in  regard  to  the  agreement,  made  prior 
to  the  signing  of  the  order  by  the  defendant  Chaffin,  tended  to 
contradict  or  add  to  the  terms  of  the  contract.     This  is  a  miscon- 


540  EFFECT   OF    CONTRACT. 

ception  of  the  purpose  and  effect  of  the  testimony.  The  defend- 
ants admitted  that  the  order  for  the  goods  was  signed  as  alleged 
and  that  it  was  delivered  to  the  agent  of  plaintiffs,  but  say  that 
at  the  time  of  signing  and  delivering  there  was  an  express  agree- 
ment that  it  was  not  of  any  binding  force  or  validity  unless  satis- 
factory to  Hill;  that  by  virtue  of  this  agreement  the  contract  was 
incomplete,  and  that  the  assent  of  Hill  was  a  condition  precedent 
to  the  completion  of  the  contract.  In  this  consists  the  distinction 
between  this  case  and  those  cited  in  the  excellent  brief  of  plaintiffs' 
counsel.  This  distinction  is  clearly  pointed  out  in  several  cases  to 
be  found  in  the  Reports.  Shepherd,  C.  J.,  in  Kelly  v.  Oliver,  113 
N.  C,  442,  speaking  of  testimony  of  this  character,  says :  "This 
does  not  contradict  the  terms  of  the  writing,  but  amounts  to  a 
collateral  agreement  postponing  its  legal  operation  until  the  hap- 
pening of  the  contingency." 

Judge  Miller,  in  Ware  v.  Allen,  128  U.  S.,  590,  thus  states  the 
principle  upon  which  such  testimony  is  admissible :  "We  are  of 
the  opinion  that  this  evidence  shows  that  the  contract  upon  which 
this  suit  is  brought  never  went  into  effect,  that  the  condition  upon 
which  it  was  to  become  operative  never  occurred,  and  that  it  is  not 
a  question  of  contradicting  or  varying  a  written  instrument  by 
parol  testimony,  but  that  it  is  one  of  that  class  of  cases  well  rec- 
ognized in  the  law  by  which  an  instrument,  whether  delivered  to 
a  third  person  as  an  escrow  or  to  the  obligees  in  it,  is  made  to 
depend  as  to  its  going  into  operation  upon  events  to  occur  or  to 
be  ascertained  thereafter."  D evens,  J.,  in  Wilson  v.  Powers,  131 
Mass.,  539,  says :  "The  manual  delivery  of  an  instrument  may 
always  be  proved  to  have  been  on  a  condition  which  has  not  been 
fulfilled,  in  order  to  avoid  its  effect.  This  is  not  to  show  any 
modification  or  alteration  of  the  instrument,  but  that  it  never  be- 
came operative  and  that  its  obligation  never  commenced."  Cromp- 
ton,  ].,  in  Pym  v.  Campbell,  6  E.  &  B.,  88,  says :  "If  the  parties 
had  come  to  an  agreement,  though  subject  to  a  condition  not 
shown  in  the  agreement,  they  could  not  show  the  condition  because 
the  agreement  on  the  face  of  the  writing  would  have  been  abso- 
lute and  could  not  be  varied,  but  the  finding  of  the  jury  is  that 
this  paper  was  signed  on  the  terms  that  it  was  to  be  an  agreement 
if  Abernathie  approved  of  the  invention,  not  otherwise.  I  know 
of  no  rule  of  law  to  estop  parties  from  showing  that  a  paper  pur- 
porting to  be  a  signed  agreement  was  in  fact  signed  by  mistake, 
or  that  it  was  signed  on  the  terms  that  it  should  not  be  an  agree- 
ment till  money  was  paid  or  something  else  done."  Elliott  Ev., 
vol.  1,  sec.  575.  These  authorities  amply  sustain  His  Honor's  rul- 
ing admitting  the  testimony. 

The  contention  made  by  the  plaintiffs  that,  because  of  the  state- 


INTERPRETATION    AND    CONSTRUCTION.  541 

ment  in  the  order  [that  it  was  not  subject  to  countermand],  there 
was  no  understanding  with  the  salesman,  except  as  printed  or 
written  on  the  order,  the  defendants  are  prevented  from  showing 
the  agreement,  assumes  the  very  question  in  controversy  whether 
there  was  a  valid  binding  contract.  The  jury  having  found  in  ac- 
cordance with  the  defendants'  uncontradicted  testimony,  there  was 
no  contract  to  be  varied  or  added  to.  It  was  the  misfortune  of 
the  plaintiffs  that  their  salesman  sent  them  the  order  immediately 
and  without  informing  them  of  the  agreement  which  he  had  made 
with  the  defendants.  This  is  one  of  a  number  of  cases  before  us 
at  this  term  in  which  parties  have  signed  long  and  complicated 
printed  contracts  for  the  purchase  of  goods,  and,  in  various  forms, 
set  up  defenses  based  upon  parol  agreements  with  salesmen  or 
agents.  It  would  seem  that  men  of  intelligence,  both  vendors  and 
vendees,  would  have  learned  the  necessity  of  reading  and  under- 
standing the  terms  and  provisions  of  such  contracts  before  signing 
and  accepting  them. 

We  have  adhered  to  the  well-settled  principle  that  in  the  absence 
of  allegation  and  proof  of  fraud  or  mutual  mistake,  the  solemn 
contracts  of  men  evidenced  by  their  signature  to  printed  or  written 
agreements  can  not  be  varied  or  changed  by  parol  evidence.  Ma- 
chine Co.  v.  Hill,  136  N.  C,  128,  and  Register  Co.  v.  Hill,  136 
N.  C,  272.  These  cases  come  clearly  within  the  distinction  pointed 
out.  The  instructions  asked  by  the  plaintiffs  could  not  have  been 
given.  They  assumed  that  a  contract  had  been  made  and  that  the 
defendants  were  endeavoring  to  rescind  it  by  countermanding  the 
order.  The  question  of  the  right  to  countermand  does  not  arise 
for  the  reasons  given.  There  is  no  error,  and  the  judgment  must 
be  affirmed. 

For  other  cases  of  conditional  execution,  see  Gwyn  v.  Patterson,  72 — 
189;  Barnes  v.  Lewis,  73—138;  Bank  v.  Hunt,  124—171;  Bank  v.  Jones,  147 — 
419 ;  Bowser  v.  Tarry,  156 — 35;  Garrison  v.  Machine  Co.,  159 — 285;  Benton 
Co.  Sav.  Bank  v.  Boddicker,  105  Iowa,  548,  75  N.  W.,  632,  45  L.  R.  A.,  321 ; 
Lockhart's  Handbook  of  Ev.,  sec.  125. 

2.    AS  TO  THE  TERMS  OF  THE  AGREEMENT. 

1.  When  the  writing  is  not  the  entire  agreement. 

(217)  EVANS  v.  FREEMAN, 

142  N.  C,  61,  54  S.  E.,  847—1906. 

The  defendant  bought  the  right  to  sell  an  automatic  stock- 
feeder  in  Hertford  County,  and  gave  his  note  under  seal  for  $50 ; 
the  vendor  transferred  the  note  to  the  plaintiff,  who  sued  to  col- 
lect it;  the  defendant  offered  to  show  that  it  was  the  understand- 
ing that  the  note  was  to  be  paid  out  of  the  proceeds  of  sales,  and 


542  EFFECT    OF    CONTRACT. 

if  no  sales  were  made,  the  note  was  not  to  be  paid.  The  court 
excluded  this  evidence,  and  from  a  judgment  for  plaintiff  the  de- 
fendant appealed.  Reversed. 

Walker,  J.  The  court  erred  in  refusing  to  admit  the  testimony 
of  the  defendant  in  regard  to  the  defense  as  to  how  the  note 
should  be  paid.  It  is  very  true  that  when  parties  reduce  their 
agreement  to  writing,  parol  evidence  is  not  admissible  to  contra- 
dict, add  to,  or  explain  it;  and  this  is  so,  although  the  particular 
agreement  is  not  required  to  be  in  writing,  the  reason  being  that 
the  written  memorial  is  considered  to  be  the  best,  and  therefore  is 
declared  to  be  the  only  evidence  of  what  the  parties  have  agreed, 
as  they  are  presumed  to  have  inserted  in  it  all  the  provisions  by 
which  they  intended  or  are  willing  to  be  bound.  Terry  v.  Rail- 
road, 91  N.  C,  236.  But  this  rule  applies  only  when  the  entire 
contract  has  been  reduced  to  writing,  for  if  merely  a  part  has 
been  written,  and  the  other  part  has  been  left  in  parol,  it  is  com- 
petent to  establish  the  latter  part  by  oral  evidence,  provided  it  does 
not  conflict  with  what  has  been  written.  In  Clark  on  Contracts, 
at  p.  85,  the  principle  is  thus  clearly  and  concisely  stated :  "Where 
a  contract  does  not  fall  within  the  statute  the  parties  may  at  their 
option  put  their  agreement  in  writing,  or  may  contract  orally,  or 
put  some  of  the  terms  in  writing  and  arrange  others  orally.  In 
the  latter  case,  although  that  which  is  written  can  not  be  aided  by 
parol  evidence,  yet  the  terms  arranged  orally  may  be  proved  by 
parol,  in  which  case  they  supplement  the  writing,  and  the  whole 
constitutes  one  entire  contract."  In  such  a  case  there  is  no  vio- 
lation of  the  familiar  and  elementary  rule  we  have  before  men- 
tioned, because  in  the  sense  of  that  rule  the  written  contract  is 
neither  contradicted,  added  to,  nor  varied ;  but  leaving  it  in  full 
force  and  operation  as  it  has  been  expressed  by  the  parties  in  the 
writing,  the  other  part  of  the  contract  is  permitted  to  be  shown  in 
order  to  round  it  out  and  present  it  in  its  completeness,  the  same 
as  if  all  of  it  had  been  committed  to  writing. 

The  competency  of  such  evidence  for  the  purpose  of  establishing 
the  other  and  unwritten  part  of  the  contract,  or  even  of  showing 
a  collateral  agreement  made  contemporaneously  with  the  execution 
of  the  writing,  has  been  thoroughly  settled  by  the  decisions  of  this 
court.  Applying  the  rule  we  have  laid  down,  it  has  been  adjudged 
competent  to  show  by  oral  evidence  a  collateral  agreement  as  to 
how  an  instrument  for  the  payment  of  money  should  in  fact  be 
paid,  though  the  instrument  is  necessarily  in  writing  and  the  prom- 
ise it  contains  is  to  pay  so  many  dollars.  In  support  of  the  prop- 
osition,  as  thus  stated,  we  may  refer  specially  to  the  comparatively 
recent  decisions  in  Woodfin  v.  Sluder,  61  N.  C,  200;  Kerchner  v. 
McRae,  80  X.  C.  219:  Braswell  v.  Pope,  82  N.  C,  57,  and  Pen- 


INTERPRETATION    AND    CONSTRUCTION.  543 

niman  v.  Alexander,  111  N.  C,  427  (reaffirmed  in  115  N.  C, 
555),  which  cases  seem  to  be  directly  in  point  and  to  fully  answer 
the  objections  made  by  the  plaintiff's  counsel  in  his  able  and  skill- 
ful argument.  Numerous  other  cases  have  been  decided  by  this 
court  in  which  the  application  of  the  same  principle  has  been  made 
to  various  combinations  of  facts,  all  tending,  though,  to  the  same 
general  conclusion  that  such  evidence  is  competent  where  it  does 
not  conflict  with  the  written  part  of  the  agreement  and  tends  to 
supply  its  complement  or  to  prove  some  collateral  agreement  made 
at  the  same  time.  The  other  terms  of  the  contract  may  generally 
thus  be  shown  where  it  appears  that  the  writing  embraces  some, 
but  not  all  of  the  terms.  Twidy  v.  Saunderson,  31  N.  C,  5 ; 
Manning  v.  Jones,  44  N.  C,  368;  Daughtry  v.  Boothe,  49  N.  C, 
87;  Perry  v.*  Hill,  68  N.  C,  417;  Willis  v.  White,  73  N.  C,  484; 
Perry  v.  Railroad,  supra;  Gumming  v.  Barber,  99  N.  C,  332.  The 
court  refused  to  apply  the  principle  in  Ray  v.  Blackwell,  94  N.  C, 
10,  and  Moffitt  v.  Maness,  102  N.  C,  457,  because  the  oral  evi- 
dence tended  to  contradict  or  vary  the  written  part  of  the  contract 
and  not  merely  to  add  other  consistent  terms.  The  question  was 
somewhat  discussed,  with  special  reference  to  our  own  decisions, 
in  Cobb  v.  Clegg,  137  N.  C.  153. 

The   court   erred,   therefore,    in    excluding   the   evidence   and    in 
withdrawing  this  defense  from  the  consideration  of  the  jury.  .  .  . 

The  cases  are  numerous  illustrating  the  rule  as  to  parol  evidence  where 
the  writing  does  not  contain  the  whole  agreement.  44—368:  49 — 87;  68 — 
417-  80—219-  82—57:  91— 236  ;  92-345  :  94—115:  99—332:  100—178:  104— 
309;  105—198:  118—737:  122—675:  122—721;  130 — 432;  137—153;  Flynt  v. 
Conrad,  61—190;  the  parol  part  can  not  contradict  the  written  part.  61— 
200:  Brown  v.  Hohbs.  147—76:  Woodson  v.  Beck,  151—144:  Kernodle  v. 
Williams,  153—475;  Anderson  v.  Corporation.  155—131;  Pierce  v.  Cobb, 
161—304:  Manfg.  Co.  v.  Manfg.  Co..  161—430:  Wilson  v.  Scarboro,  163— 
380:  Richards  v.  Hodges,  164—183:  Palmer  v.  Lowder,  167—331:  Faust  v. 
Rohr,  167—360:  Brown  v.  Mitchell,  —  N.  C.  — ,  84  S.  E..  404:  Lockhart s 
Ew,  sec.  115. 

In  Colgate  v.  Latta,  115 — 127,  the  plaintiff  sued  on  a  written  order  for 
100  boxes  of  soap  at  $3.40  per  box,  and  the  defendant  was  permitted  to 
show  an  oral  agreement  that  the  soap  should  be  shipped  in  his  name,  but 
that  another  person  was  to  pav  for  half  of  it.  This  case  quotes  from 
Abott's  Trial  Evidence,  294,  ''that  where  the  parties  have  embodied  the 
terms  of  their  agreement  in  writing,  neither  can.  in  an  action  between  them- 
selves (unless  impeaching  the  instrument),  give  oral  evidence  that  they  did 
not  mean  that  which  the  instrument,  when  properly  read,  expresses  or  legally 
implies,  or  that  thev  meant  something  inconsistent  therewith."  but  oral  evi- 
dence is  not  excluded,  "where  the  language  of  the  instrument  leaves  its 
meaning  doubtful,  or  extrinsic  facts  in  evidence  raise  a  doubt  as  to  its  appli- 
cation; or  where  it  appears  that  the  instrument  was  not  intended  to  be 
complete  and  final  statement  of  the  whole  transaction,  and  the  object  of  the 
evidence  is  simply  to  establish  a  separate  oral  agreement  in  a  matter  as  to 
which  the  instrument  is  silent,  and  which  is  not  contrary  to  its  terms  nor  to 

their  legal  effect." 

In  an  action  on  a  note,  an  endorser  was  allowed  to  show  that  at  the  time 
he  made  the  endorsement,  it  was  agreed  that  if  he  would  execute  a  deed  to 
certain  land  he  should  be  released  from  liability,  and  that  he  had  executed 


544  EFFECT    OF    CONTRACT. 

the  deed.  Smitherman  v.  Smith,  20—86.  A  collateral  agreement  may  be 
shown  by  parol.  Typewriter  Co.  v.  Hardware  Co.,  143 — 97;  Aden  v.  Doub, 
146—10. 

2.  Where  the  writing  is  the  entire  agreement. 

a.  Parol  evidence  can  not  vary  or  contradict. 

(218)  CLARK  v.  McMIIXAN, 

4  N.  C,  244—1815. 

The  defendant  gave  the  plaintiff  a  writing,  not  under  seal, 
whereby  he  acknowledged  that  he  had  sold  plaintiff  a  certain  note, 
for  which  he  had  received  part  payment,  and  the  balance  was  to 
be  paid  when  the  money  was  collected.  The  plaintiff  offered  to 
prove  by  parol,  that  at  the  time  of  the  contract,  the  defendant 
promised  to  commence  an  action  against  the  payees  of  the  note, 
or  one  of  them,  within  ten  days  from  the  1st  of  October,  1806 — 
that,  in  fact,  six  months  expired  before  the  action  was  brought. 
And  whether  such  evidence  is  admissible,  is  the  question  presented 
to  the  court. 

Taylor,  C.  J.  If  the  tendency  of  parol  evidence  is  to  contra- 
dict, vary,  or  add  to  a  written  instrument,  it  can  not  be  received ; 
if  to  explain  and  elucidate  it,  it  may  be  received.  Upon  the  face 
of  this  writing  there  is  nothing  doubtful  or  equivocal.  It  states  a 
simple  transaction,  and  imposes  no  obligation  upon  the  defendant ; 
but  the  object  of  the  evidence  is  to  show  that  when  he  made  the 
contract  he  entered  into  a  stipulation,  by  which  a  duty  was  im- 
posed upon  him,  for  the  breach  of  which  this  action  was  probably 
brought.  This  is  in  effect  to  prove  by  inferior  evidence  that  that 
which  purports  on  the  face  of  it  to  be  a  memorial  of  the  defend- 
ant's contract,  is  in  truth  not  so.  Such  evidence  is  inadmissible 
according  to  all  of  the  authorities. 

"It  is  a  settled  rule  of  law  that  when  the  parties  to  a  contract  reduce  the 
same  to  writing,  in  the  absence  of  fraud  or  mutual  mistake  properly  alleged, 
parol  evidence  can  not  be  received  to  contradict,  add  to,  modify  or  explain 
it."  Meekins  v.  Newberry,  101 — 17.  Where  the  mortgage  fixed  the  amount 
of  the  debt  and  there  was  no  note,  parol  evidence  could  not  be  used  to  show 
a  different  agreement  as  to  the  amount.  Moffitt  v.  Maness,  102 — 457.  For 
further  illustration  of  the  rule,  see  66—244;  72—213;  98—232;  104—305;  Hall 
v.  Misenheimer,  137 — 183;  Koonce  v.  Russell,  103 — 179;  Woodson  v.  Beck, 
151—144;  Medicine  Co.  v.  Mizell,  148—384;  Basnight  v.  Jobbing  Co.,  148— 
354 ;  Simpson  v.  Green,  160—301 ;  Bank  v.  Moore,  138 — 529 ;  Lockhart's  Ev., 
sec.  111. 

All  the  papers  executed,  letters  and  other  writings  made  and  acted  upon 
in  the  negotiations  preceding  the  contract  may  be  considered  in  determining 
what  was  the  agreement  of  the  parties.    29—491  ;  101—86;  112—115  ;  115—212. 

Parol  evidence  may  be  used  to  show  fraud,  mistake,  etc.  85 — 17;  92 — 
371;  128 — 477;  Tyson  v.  Jones,  150 — 181.  It  may  be  used  to  show  a  subse- 
quent agreement.     119 — 35;  125 — 152;  Freeman  v.  Bell,  150 — 146;  Palmer  v. 


INTERPRETATION     AND    CONSTRUCTION.  545 

Lowder,  167—331;  Faust  v.  Rohr,  167—360;  or  when  the  writings  come  in 
question  collaterally.  62—241  ;  116—875;  recital  as  to  consideration  in  a  deed 
may  be  contradicted.  108—581  ;  137—240 ;  Jones  v.  Jones,  164—320 ;  for  use 
of  parol  evidence  as  to  a  writing  generally,  see  Ferguson  v.  Rafferty,  128 
Pa.,  337,  18  Atl.,  484,  6  L.  R.  A.,  33,  and  note;  Lockhart's  Ev.,  sec.  112 
et  seq. 

b.  Explanation  of  terms. 

(219)    LONG  v.  DAVIDSON, 

101   X.  C,  170,  7  S.  E.,  758—1888. 

Civil  action  for  balance  due  on  account  for  building  a  house. 
The  plaintiff  alleged  that  he  was  to  build  a  brick  house  for  the  de-  ' 
fendant,  at  $2.40  per  thousand  for  laying  the  brick,  to  be  esti- 
mated by  "wall  count,  solid  measure."  The  defendant  contended 
that  he  was  to  pay  only  for  actual  number  of  bricks  laid.  By 
plaintiff's  estimate  there  were  224,835  bricks,  and  the  defendant 
owed  him  a  balance  of  $163.  By  defendant's  count  there  were 
only  155,219  bricks,  and  he  had  overpaid  plaintiff  $7.53.  His 
Honor  submitted  the  question  to  the  jury  to  determine  from  all 
the  evidence  what  the  contract  was,  and  allowed  the  plaintiff  to 
show  what  was  meant  by  the  words  "wall  count,  solid  measure." 

Defendant  insisted  that  it  was  incompetent  for  plaintiff  to  offer 
evidence  to  explain  the  terms,  and  that  no  custom  or  usage  could 
be  shown  "unless  the  same  was  reasonable,  certain,  uniform  and 
universal,  and  known  to  the  defendant  or  brought  to  his  knowl- 
edge at  the  time  the  contract  was  made,  and  that  the  proper  mode 
of  counting  the  brick  in  the  wall  was  by  actual  count." 

There  was  a  verdict  and  judgment  for  the  plaintiff,  and  defend- 
ant appealed. 

Davis,  J.  Whether  the  contract  was  that  the  bricks  were  to  be 
laid  at  $2.40  per  thousand  "wall  count,  solid  measure,"  as  insisted 
by  the  plaintiff,  or  whether  nothing  was  said  about  "wall  count, 
solid  measure,"  and  the  number  of  brick  was  to  be  ascertained  by 
actual  count  as  insisted  by  the  defendant,  and  about  which  there 
was  conflicting  evidence,  was  a  question  properly  left  to  the  jury, 
and  all  the  exceptions  of  the  defendant,  both  to  the  evidence  and 
the  charge  of  the  court,  may  be  comprehended  in  the  single  ques- 
tion— if  the  contract  was  that  $2.40  per  thousand,  "wall  count, 
solid  measure,"  were  to  be  paid  for  laying  the  bricks — is  it  com- 
petent for  the  plaintiff  to  show  what  was  meant  by  those  words? 
Did  they  have  a  confined  and  limited  local  meaning,  unknown  to 
the  defendant,  and  different  from  the  ordinary  meaning  which  the 
words  would  import?  Or  did  they  have  an  established,  uniform 
and  universal  meaning  amongst  those  who  use  them?  Are  there 
two  meanings  conveyed  by  the  words,  one  limited  and  local,  and 


546  EFFECT    OF    CONTRACT. 

the  other  general  and  universal?  "A  mere  local  usage,"  as  was 
said  by  Ruffin,  C.  J.,  in  Jones  v.  Allen,  27  N.  C,  473,  cited  by  the 
counsel  for  the  defendant,  "in  a  small  part  of  the  country,  can  not 
change  the  law,"  but  if  there  is  an  "established,  general  custom, 
that  would,  in  truth,  be  the  law." 

The  question  in  that  case  was  whether  the  hirer  of  the  slave 
(who  had  employed  a  physician  to  attend  the  slave  when  sick)  or 
the  owner,  was  liable  for  the  medical  bill.  There  was  no  evidence 
of  an  established,  general  custom,  but  the  plaintiff,  in  that  case, 
proposed  to  show  "that  in  the  section  of  the  country  where  the  hir- 
ing took  place,  it  was  the  custom"  for  the  owner  to  pay  for  med- 
ical attendance;  this  was  not  allowed,  and  the  same  was  held  to 
be  law  in  Cooper  v.  Purvis,  46  N.  C,  141. 

If  the  contract  was  that  the  building  was  to  be  erected  of  brick 
at  $2.40  per  thousand,  "wall  count,  solid  measure,"  it  must  be 
that  something  was  meant  by  the  term  used,  and  there  is  no  con- 
flict in  the  testimony  as  to  what  that  meaning  was,  nor  does  it  ap- 
pear from  the  evidence  that  they  had  any  other  meaning.  So  far 
from  being  a  local  meaning,  different  from  the  general  meaning, 
it  appears  from  the  evidence  that  they  have  one  established  mean- 
ing universally  understood  among  brick-masons  and  contractors. 
If  the  terms  are  only  used  in  a  particular  trade  or  science  or  call- 
ing, the  meaning  must  be  gathered  from  the  testimony  of  persons 
acquainted  with  the  trade  or  science  or  calling  in  which  the  terms 
are  employed,  and  it  is  for  the  jury  to  ascertain  the  meaning  of 
the  terms  used ;  but  when  the  terms  of  the  contract  are  ascertained, 
the  construction  of  the  contract  is  a  matter  for  the  court.  Silver- 
thorn  v.  Fowle,  49  N.  C,  362. 

It  is  true  that  the  defendant  says  that  no  such  contract  as  is 
alleged  by  the  plaintiff  was  made,  and  "that  he  knew  nothing  of 
any  such  rule  for  counting  brick  as  was  alleged ;"  but  if  the  terms 
of  the  contract  were  as  alleged  by  the  plaintiff,  it  was  the  misfor- 
tune of  the  defendant  to  have  agreed  to  pay  $2.40  per  thousand, 
"wall  count,  solid  measure,"  in  ignorance  of  the  meaning,  and  the 
only  meaning,  as  appears  from  the  testimony,  conveyed  by  the 
terms  used  in  making  of  the  contract,  and  without  informing  him- 
self of  the  fact  that  they  had,  at  least,  one  meaning. 

Affirmed. 

Parol  evidence  may  be  used  to  explain  the  terms  when  the  meaning  is  not 
clear.  "Dollar"  explained.  76—360:  "less  brokerage  ten  cents  per  barrel." 
112—541:  "Cr.  by  Obs.  Sup..  $10."  114—349;  Willis  v.  Constr.  Co.,  152 — 
100 :  Lockhart's  Ev.,  sec.  122. 

Parol  evidence  may  be  used  "to  fit  the  description  to  the  thing  described"; 
as  in  a  contract  for  fifteen  walnut  trees  of  a  certain  description,  and  there 
are  not  more  than  that  number  on  the  land.  Dunkart  v.  Rineheart,  89—354 ; 
"one  tract  containing  193  acres,  .it  being  the  interest  in  two  shares,  adjoining 
the  lands  of  J  B,  O  E  and  others."     Farmer  v.   Batts,  83—387;   Young  v. 


INTERPRETATION    AND    CONSTRUCTION.  547 

Griffith,  84 — 715 ;  "Lenoir  lands,  owned  by  myself  and  J  W  T."  Thornburgh 
v.  Masten,  88—293.  But  not  where  the  description  is  too  indefinite,  as  in 
•'100  acres"  without  other  designation.  Breaid  v.  Alunger,  88—297;  Radford 
v.  Edwards,  88—347;  Ivey  v.  Cotton  Mills,  143—189;  Revisal,  948,  1605. 

c.  Latent  and  patent  ambiguity. 
(220)  BROWN  v.  BEBEE, 

1  D.  Chip.,  227,  6  A.  D.,  728—1814. 

This  was  an  action  on  a  promissory  note  signed  by  the  defend- 
ant, in  the  following  words:  "For  value  received,  I  promise  to 
pay  to  Jonathan  Brown  sixteen,  on  the  first  day  of  May  next,  with 
interest."  The  plaintiff  offered  to  prove  that  the  word  sixteen 
meant  sixteen  dollars;  this  was  excluded  and  plaintiff  appealed. 

Chipman,  C.  J.  The  rule  certainly  is,  as  laid  down  by  the  de- 
fendant's counsel,  that  parol  proof  can  not  be  admitted  to  explain, 
extend  or  vary  a  written  contract.  There  is  but  one  exception, 
if  it  may  be  called  an  exception,  that  is,  in  the  case  of  a  latent 
ambiguity.  As  in  the  case,  usually  put,  of  a  devise  to  A;  there 
are  two  persons  by  the  name  of  A,  father  and  son;  this,  appear- 
ing by  parol  proof,  introduces  an  ambiguity  as  to  the  person  in- 
tended by  the  testator.  But,  as  the  ambiguity  is  not  apparent  on 
the  face  of  the  devise,  it  is  called  a  latent  ambiguity,  and,  as  it 
is  raised  by  parol,  it  may  be  explained  by  parol.  But  where  there 
is  a  devise  of  fifty  thousand  dollars,  wholly  omitting  to  name  any 
devisee,  this  is  a  patent  ambiguity,  which  can  not  be  explained 
by  parol. 

But  it  is  said  that  this  is  a  mistake,  and  that  mistakes  are  al- 
lowed to  be  rectified.  There  are  cases  in  which  a  court  of  chan- 
cery will  correct  a  mistake,  or  rather  compel  the  party  to  correct 
it,  by  supplying  what  was  omitted  by  mistake;  but  this  does  not 
belong  to  a  court  of  law.  But  in  simple  contracts  a  party  is  rarely 
without  remedy  in  a  court  of  law.  As,  in  the  present  case,  the 
note  through  an  omission  being  void  or  ineffectual,  the  plaintiff 
may  resort  to  the  original  contract.  He  may  sue  on  the  original 
cause  of  action  and  recover  the  demand  for  which  the  note  was 
intended  to  be  given.  Had  the  plaintiff  in  this  case  added  a  count 
applicable  to  the  original  contract,  he  might  have  recovered  what 
was  his  just  due ;  he  still  may  have  that  remedy. 

But  in  this  action  brought  on  the  note,  the  County  Court  were 
right  in  rejecting  parol  evidence  to  prove  what  the  note  should 
have  been,  or  how  it  should  have  been  written ;  the  decision  is  sup- 
ported equally  by  precedent  and  the  soundest  principles.  In  an 
action  on  a  note  the  plaintiff  is  entitled  by  proving  only  the  ex- 
ecution of  the  note;  from  the  solemnity  and  certainty  of  the  in- 


548  EFFECT    OF    CONTRACT. 

strument,  it  affords  evidence  of  the  contract,  the  consideration,  and 
of  everything  which  is  necessary  to  entitle  the  plaintiff  to  recover. 
To  give  this  effect  to  a  note,  and  yet  allow  the  plaintiff  to  supply 
any  defect  in  the  note  by  parol  testimony ;  or,  in  other  words,  to 
prove  what  the  note  should  have  been,  as  agreed  between  the  par- 
ties by  parol,  is  perfectly  inconsistent ;  it  would  be  to  give  the 
plaintiff  all  the  benefit  of  a  written  contract  and  yet  permit  him 
to  prove  the  contract  by  parol  testimony.  Affirmed. 

This  case  states  the  distinction  between  the  latent  and  patent  ambiguity, 
but  for  a  different  application,  see  Williamson  v.  Smith,  1  Cold.  (Term.),  1, 
78  A.  D.,  478;  Marshall  v.  Hanev,  4  Md.,  498,  59  A.  D.,  92;  Chestnut  v. 
Chestnut,  104  Va.,  539,  52  S.  E.,  348,  2  L.  R.  A.  (N.  S.),  879;  Walker  v. 
Miller.  139-448,  52  S.  E.,  125,  1  L.  R.  A.  (N.  S.),  157,  111  A.  S.  R.,  805.  In 
Deaf  &  Dumb  Inst.  v.  Norwood,  45 — 65,  the  distinction  is  fully  explained  in 
the  case  of  a  will.  For  other  cases,  see  Twidy  v.  Saunderson,  31 — 5;  Holman 
v  Whitaker,  119—113;  Richardson  v.  Godwin,  59 — 229;  Stedman  v.  Taylor, 
77 — 134:  Tavlor  v.  Maris,  90—619;  Ward  v.  Gay,  137—397;  Rhyne  v.  Rhyne, 
151—400;  l'Greenl.  Ev.,  sec.  297;  2  Am.  &  Eng.  Encyc,  288;  17  Cyc,  675; 
Wharton  v.  Eborn,  88—344;  Silverthorne  v.  Fowle,  ante  (35),  and  note; 
Lockhart's  Ev.,  sec.  126. 

d.   Custom   or  usage. 

(221)  MOORE  v.  EASON, 

33  N.  C,  568—1850. 

Nash,  J.  This  action  in  ejectment  is  to  recover  from  the  de- 
fendant a  house  and  lot  in  the  town  of  Greenville,  in  the  county 
of  Pitt.  The  demise  is  laid  on  the  first  of  January,  1849.  The 
plaintiff  claims  that  the  defendant  entered  into  possession  of  the 
premises  in  1848  as  his  tenant,  and  produced  evidence  tending  to 
prove  the  fact  to  be  so.  In  order  to  show  that  the  tenancy  had 
expired  at  the  date  of  the  demise,  set  forth  in  the  declaration,  he 
offered  to  prove  that  it  was  the  general  usage  in  the  town  of 
Greenville  for  all  leases  to  expire  on  the  day  next  before  the  1st 
of  each  January.  This  evidence  was  objected  to,  but  was  admit- 
ted by  the  court.  There  was  a  verdict  for  the  plaintiff,  and  from 
the  judgment  thereon  the  defendant  appealed. 

The  only  question  now  presented  is,  as  to  the  admissibility  of 
this  testimony,   under  the  circumstances,   under   which   it   was   of- 

- 

fered.  We  must  take  the  case  as  it  sent  to  us.  There  can  not 
be  a  doubt  that  parol  evidence  may  be  admitted  to  show  a  custom 
or  usage  of  a  place  where  a  contract  is  entered  into,  for  the  pur- 
pose of  annexing  incidents  to  and  explaining  the  meaning  of  terms 
used  in  it.  The  leading  case  on  the  subject  is  that  of  Hutton  v. 
Warren,  1  Mason  and  Welsby,  466.  In  that  case  it  was  decided 
that  the  plaintiff  was  at  liberty  to  show  a  custom,  by  which  a  ten- 
ant, cultivating  the  premises,  according  to  the  course  of  good  hus- 
bandry, was  entitled  on  quitting  to  receive  a  reasonable  allowance 


INTERPRETATION     AND    CONSTRUCTION.  549 

for  seed  and  labor  bestowed  upon  the  arable  land  in  the  last  year 
of  bis  tenancy,  etc.  The  custom,  however,  is  admissible  in  proof, 
not  for  the  purpose  of  establishing  the  contract,  but  to  add  an  in- 
cident not  expressly  embraced  in  it,  and  in  reference  to  which  the 
parties  are  presumed  to  have  contracted.  Thus  if  the  lease  in  the 
case  was  made  on  the  1st  of  February,  1849,  or  from  the  1st  of 
January,  1849,  for  and  during  that  year,  the  plaintiff  would  be 
permitted  to  show,  that  by  the  usage  or  custom  of  Greenville,  all 
leases  made  within  the  town  and  so  terminating,  expired  on  the 
day  preceding  the  1st  of  January.  In  that  case  the  custom  would 
transport  into  tbe  contract  an  incident,  upon  which  it  was  silent, 
but  with  respect  to  which  the  parties  must  be  presumed  to  have 
contracted.  But  before  tbe  incident  can  be  so  engrafted,  the  con- 
tract, as  made,  must  be  proved — the  incident  can  not  be  used  to 
establisb  the  contract.  The  expiration  of  a  lease  is  as  much  a  mat- 
ter of  contract  as  its  commencement ;  nor  can  the  incident  be  in- 
consistent with  the  terms  of  this  contract.  In  the  case  of  Wiggles- 
worth  v.  Dollison,  Douglas,  201,  it  was  decided  that  a  custom, 
that  a  tenant,  whether  by  parol  or  deed,  shall  have  the  way-going 
crop  at  the  expiration  of  his  term,  is  good,  if  not  repugnant  to  the 
lease,  by  which  he  bolds.  See  1st  Smith's  leading  cases,  300, 
where  the  case  of  Dollison  is  also  reported,  and  the  notes.  The 
contract  of  lease  in  this  case  may  have  been  for  one  month,  two 
months,  or  six  months,  and  whether  the  custom  was  applicable  or 
not,  would  depend  upon  the  term  agreed  for. 

We  think  that  the  testimony  under  the  circumstances  of  this 
case  was  improperly  admitted,  and  there  must  be  a  venire  de  novo. 

Per  Curiam.     Judgment  reversed  and  venire  de  novo  awarded. 

The  custom  or  usage  of  trade  may  annex  an  incident  to  a  contract.  More- 
head  v.  Brown,  51 — 367;  Chem.  Co.  v.  Atkinson,  91 — 389;  Riddick  v.  Dunn. 
145 — 31.  The  custom  must  be  reasonable  and  general — a  mere  local  usage 
in  a  small  part  of  the  country  can  not  change  the  law.  Jones  v.  Allen,  27 — 
473 :  30—109 :  Cooper  v.  Purvis,  46—141 ;  Bank  v.  Floyd,  142—187 ;  Bowman 
v.  Blankenship,  157 — 376.  But  the  usage  of  one  in  conducting  his  own  busi- 
ness enters  into  the  contract,  if  known  to  the  other  party.  Norris  v.  Fowler, 
87—9;  65—13;  83—377;  108—407;  124—626:  but  see  131—111.  Custom  is 
not  admissible  when  there  is  direct  evidence  that  it  was  not  observed.  127 — 
53.  Custom  can  not  violate  the  law.  Winder  v.  Blake,  49 — 332 ;  Gore  v. 
Lewis,  109—539   (usury). 

"Usage  should  be  definite,  uniform,  well  known  and  be  established  by  clear 
and  satisfactory  evidence,  so  that  it  may  be  justly  presumed  that  parties  in 
making  a  contract  had  reference  to  it."  13  L.  R.  A.,  438,  and  notes.  See 
also  3  L.  R.  A.,  859:  4  L.  R.  A.,  392;  10  L.  R.  A..  785:  Penland  v.  Ingle.  138— 
456;  Clark  Cont..  396:  Mordecai's  Lectures,  612;  2  Page  Cont,  sec.  604;  12 
Cyc,  1030.  Usage  is  an  established  method  of  dealing  adopted  in  a  particular 
place  or  business,  and  having  legal  force  because  people  make  contracts  with 
reference  to  it.  Custom  is  used  in  the  same  sense  as  usage,  or  as  the  result 
of  usage,  having  the  force  of  law  without  the  assent  of  the  individual.  29 
Am.  &  Eng.  Encvc,  365  ct  seq.  As  to  its  use  in  evidence,  see  1  Greenleaf 
(16  Ed.),  sees.  294,  295;  Lockhart's  Ev.,  sec.  123. 


550  EFFECT    OF    CONTRACT. 

Sec.  2.  Construction  of  the  contract. 

1.    General  rules. 

GILBERT  v.  SHINGLE  CO., 

167  N.  G,  286,  83  S.  E.,  337—1914. 

This  was  an  action  by  the  plaintiffs  for  the  wrongful  cutting  of 
timber  by  the  defendant ;  the  defendant  claimed  under  a  deed  for 
the  timber  which  conveyed  "all  oak,  poplar,  maple,  spruce,  pine 
and  other  timber  ...  of  the  dimensions  of  10  inches  or  more 
in  diameter  at  a  distance  of  12  inches  from  the  ground,  or  which 
shall  attain  such  size  any  time  within  the  period  of  10  years  from 
the  date  of  this  instrument ;"  and  also  the  right  to  go  over  the 
land  "at  any  and  all  times  during  the  term  of  20  years  .  .  . 
for  the  purpose  of  removing  the  above  mentioned  timber."  The 
defendant  had  cut  and  removed  some  of  the  timber  after  10  years 
and  within  20  years  from  the  date  of  the  deed.  The  court  ruled 
that  the  deed  gave  the  defendant  20  years  to  cut  and  remove  the 
timber,  excluded  evidence  by  the  plaintiff  tending  to  show  what 
was  a  reasonable  time ;  and  also  that  the  understanding  of  the  par- 
ties was  that  the  timber  should  be  cut  and  removed  in  the  10 
years.     The  plaintiff  submitted  to  a  nonsuit  and  appealed. 

Affirmed. 

Hoke,  J.  It  is  the  accepted  rule  of  construction  in  this  and 
other  written  contracts  that  the  intent  of  the  parties,  as  embodied 
in  the  entire  instrument,  should  prevail,  and  that  each  and  every 
part  shall  be  given  effect,  if  it  can  be  done  by  fair  and  reasonable 
intendment,  and  that,  in  ascertaining  this  intent,  resort  should  be 
had,  primarily,  to  the  language  they  have  employed,  and,  where 
this  language  expresses  plainly,  clearly,  and  distinctly  the  meaning 
of  the  parties,  it  must  be  given  effect  by  the  courts,  and  other 
means  of  interpretation  are  not  permissible.  McCallum  v.  Mc- 
Callum,  83  S.  E.,  250  (at  the  present  term)  ;  Kearney  v.  Vann, 
154  X.  C.  311,  70  S.  E.,  747,  Ann.  Cas.,  1912  A,  1189;  Hendricks 
v.  Furniture  Co.,  156  N.  C,  569,  72  S.  E.,  592;  Bridgers  v.  Or- 
mond,  153  N.  C,  114,  68  S.  E.,  973;  Davis  v.  Frazier,  150  N.  C, 
447,  64  S.  E.,  200;  Walker  v.  Venters,  148  N.  C,  388,  62  S.  E., 
510. 

Applying  the  principle,  we  think  it  clear  that  the  10-year  limita- 
tion, stated  in  the  first  portion  of  the  contract,  is  descriptive  as  to 
the  size  of  the  timber  conveyed  and  specifying  the  time  within 
which  the  measurement  must  be  had. 

"Of  the  dimensions  of  10  inches  or  more  in  diameter  at  a  dis- 


INTERPRETATION    AND    CONSTRUCTION.  551 

tance  12  inches  from  the  ground  or  which  shall  attain  such  size 
within  the  period  of  10  years  from  the  date  of  the  instrument." 

And  the  20-year  limitation,  in  the  latter  portion,  by  correct  in- 
terpretation, is  as  clearly  designed  and  intended  to  fix  the  time 
within  which  the  timber  sold  must  be  cut  and  removed.  True, 
the  instrument  here  only  uses  the  word  "remove,"  but,  considering 
the  extent  and  purposes  of  the  contract,  the  term,  by  clear  intend- 
ment, includes  the  right  to  cut  during  said  period  by  the  usual 
and  ordinary  methods  of  lumbermen  in  that  vicinity.  It  is  the 
only  interpretation  which  would  allow  to  the  term,  as  used,  any 
reasonable  significance,  and  is  the  construction  approved  with  us 
in  well-considered  cases  on  the  subject.  Lumber  Co.  v.  Smith,  150 
N.  C.  253,  63  S.  E.,  954,  followed  in  Bateman  v.  Lumber  Co.,  154 
N.  C,  248,  70  S.  E.,  474,  34  L.  R.  A.  (N.  S.),  615,  and  other 
cases. 

This  being  the  correct  and  clearly  expressed  import  of  the  con- 
tract, His  Honor  was  right  in  declining  to  hear  testimony  as  to 
what  would  be  a  reasonable  time  within  which  to  cut  the  timber. 
This  question  of  reasonable  time  only  arises  when,  as  in  Hawkins' 
Case,  139  N.  C,  160,  51  S.  E..  852,  the  time  to  commence  is  left 
indefinite,  "15  years  from  the  time  he  commenced  cutting,"  and  it 
was  held  that  the  grantee  was  thereby  required  to  commence  with- 
in a  reasonable  time.  But,  in  the  contract  before  us,  the  term  re- 
fers to  the  date  of  the  instrument  (Hornthal  v.  Howcott,  154  N. 
C,  228,  70  S.  E.,  171;  Warren  v.  Short,  119  N.  C,  39,  25  S.  E., 
704),  and  this  being  definite  and  certain,  the  evidence  tending  to 
establish  a  reasonable  time  was  incompetent  and  properly  excluded. 

And  the  court  also  made  correct  ruling  as  to  the  evidence  of- 
fered to  show  that  the  parties  to  the  agreement  only  intended  to 
allow  10  years  in  which  to  cut  and  remove  the  timber.  This  would 
be  to  contradict  the  written  agreement  of  the  parties  by  parol  evi- 
dence, and  is  clearly  contrary  to  authority.  Speaking  to  such  evi- 
dence in  Walker  v.  Venters,  the  Chief  Justice  said : 

"Such  evidence  is  never  admitted,  if  the  wording  of  the  written 
contract  is  clear,  or  if  the  evidence  offered  is  in  direct  contradiction 
of  the  intrinsic  meaning  of  the  language  of  the  contract." 

(223)  BANKS  v.  LUMBER  CO., 

142  N.  C,  49.  54  S.  E.,  844—1906. 

Action  for  breach  of  contract.  The  defendant  had  a  conveyance 
of  "all  pine  lumber  of  every  description  at  and  above  the  size  of 
twelve  inches  in  diameter  at  the  base  when,"  etc.  The  plaintiff 
claims  that  the  defendant  has  cut  timber  "less  than  twelve  inches 
in  diameter  at  the  base." 

The  plaintiff  offered  to  prove  a  custom  in  that  section  to  cut 


552  EFFECT    OF    CONTRACT. 

timber  two  feet  from  the  ground,  which  was  refused.  He  then 
offered  to  prove  that  defendant  had  cut  timber  "less  than  twelve 
inches  in  diameter  at  about  two  feet  from  the  ground,"  which  was 
also  excluded.  The  court  intimated  that  he  would  instruct  the 
jury  that  "at  the  base"  meant  at  the  ground,  and  that  plaintiff 
could  not  recover  for  timber  cut,  measuring  twelve  inches  at  the 
base.     Plaintiff  submitted  to  nonsuit,  and  appealed. 

Ceark,  C.  J.  After  stating  the  case:  The  construction  of  a 
written  contract,  when  its  terms  are  unambiguous,  is  a  matter  for 
the  court.  This  contract  specifies  clearly  the  diameter  and  the 
point  of  the  tree  at  which  the  diameter  should  be  measured.  In 
some  of  the  cases  which  have  come  before  this  court,  the  contract 
has  stipulated  "not  less  than  fourteen  inches  in  diameter  twenty- 
four  inches  above  the  ground,"  as  in  Lumber  Co.  v.  Hines,  126 
N.  C,  225  ;  or  "twelve  inches  in  diameter  on  the  stump,"  Hardi- 
son  v.'  Lumber  Co.,  136  N.  C,  173,  and  Warren  v.  Short,  119  N. 
C,  39;  or  "timber  that  will  square  one  foot,"  Whitted  v.  Smith, 
47  N.  C,  36;  and  it  may  be  that  there  have  been  others  with  a 
stipulation,  like  this,  for  the  measurement  to  be  taken  "at  the 
base."     This  is  a  matter  of  contract  between  the  parties. 

His  Honor  was  correct  in  holding  that  "at  the  base"  meant  "at 
the  ground."  Webster  defines  "Base — that  on  which  something  is 
supported,  as  the  base  of  a  column,  the  base  of  a  mountain,"  i.  e., 
at  the  foot  of  the  column,  at  the  foot  of  the  mountain.  The  con- 
tract specifies  timber  "now  standing  or  growing,"  i.  c,  trees  ;  and 
the  base  of  a  tree  is  "at  the  foot"  of  the  tree.  If  the  parties  in- 
tended that  the  measurement  should  be  taken  "at  the  stump"  or 
"twenty-four  inches  above  the  ground,"  they  have  not  so  con- 
tracted. The  contract  being  for  the  measurement  at  the  base,  it 
can  not  be  contradicted  by  parol. 

Certainly,  evidence  that  it  was  merely  customary  in  that  section 
to  cut  timber  two  feet  above  the  ground  could  not  have  that  effect, 
for  it  was  not  shown  nor  offered  to  be  shown  that  such  cutting 
was  usually  under  contracts  stipulating  for  measurement  "at  the 
base."  and  that  when  cut  under  such  contracts  the  "diameter  at 
the  base"  was  by  general  custom  understood  and  taken  to  be  twelve 
inches  in  diameter  two  feet  above  the  ground.  Llis  Honor,  there- 
fore, properly  held  that  "twelve  inches  in  diameter  at  the  base" 
meant  "at  the  ground."  If  this  enabled  the  defendant  to  cut  trees 
that  might  measure  less  than  twelve  inches  in  diameter  two  feet 
above  the  ground,  it  is  because  the  plaintiff  so  contracted. 

In  Hardison  v.  Lumber  Co.,  136  N.  C,  we  held  that  the  nat- 
ural meaning  of  the  words  "twelve  inches  in  diameter"  applied  to 
standing  trees  and  would  lie  "from  outside  to  outside,  bark  in- 
cluded," in  absence  of  a  general  custom  giving  the  words  a  dif- 


INTERPRETATION     AND    CONSTRUCTION.  553 

ferent  meaning.  So,  here,  the  natural  meaning  of  "twelve  inches 
in  diameter  at  the  base"  is  "at  the  ground,"  and  there  was  no  evi- 
dence offered  of  a  general  custom  that  when  those  words  were  used 
in  a  contract,  "at  the  base"  meant  "two  feet  above  the  ground." 
The  words  "when  cut"  only  extends  the  time  of  the  measure- 
ment, which  would  otherwise  refer  to  the  diameter  of  the  trees  at 
the  date  of  the  contract,  to  the  time  of  the  actual  cutting.  Hardi- 
son  v.  Lumber  Co.,  supra,  and  cases  there  cited.  If  the  meaning 
of  the  contract  was  "twelve  inches  diameter  at  the  base  of  the 
log"  when  cut,  then  all  the  timber  above  the  lowest  cut  would  be- 
long to  the  landowner  if  the  upper  cuts  were  less  than  twelve 
inches  in  diameter  at  the  big  end.  No  error. 

Interpretation  is  finding  out  the  true  sense  of  the  written  words ;  con- 
struction is  subjecting  the  instrument,  in  its  operations,  to  the  established 
rules  of  law.  1  Greenleaf  Ev.  (16  Ed.),  sec.  277:  but  this  is  not  generally 
observed.     17  Am.  &  Eng.  Encyc,  2. 

1.  Construction  must  be  favorable  to  the  intention,  reasonable  and  agree- 
able to  the  common  understanding.  2.  Where  there  is  no  ambiguity,  the 
construction  is  according  to  the  words ;  but  where  the  meaning  is  clear,  too 
great  stress  must  not  be  laid  upon  the  words  :  "words  are  not  the  principal 
thing  in  a  deed,  but  the  intent  and  design  of  the  grantor."  3.  The  construc- 
tion is  upon  the  entire  deed  and  not  upon  disjointed  parts.  Lowdermilk  v. 
Bostic,  98—299;  Cobb  v.  Hines,  44—343;  Barnes  v.  Haybarger,  53—76:  Mc- 
Xeelv  v.  Carter,  23—141  :  Coal  Co.  v.  Ice  Co.,  134—574 ;  2  Page  Cont,  sees, 
1112-1116;  Clark  Cont.,  402;  Wilkie  v.  Ins.  Co.,  146—513;  Railroad  v.  Rail- 
road, 147—382,  23  L.  R.  A.  (N.  S.),  223,  125  A.  S.  R.,  550,  15  Ann.  Cas.,  363; 
Thomas  v.  Bunch,  158—175;  Highsmith  v.  Page,  158 — 226:  Beacom  v.  Amos. 
161—357;  Finger  v.  Goode,  —  X.  C.  — ,  85  S.  E..  137;  6  R.  C.  L.,  834  et  seq. 
Technical  rules  are  not  so  much  to  be  consulted  as  the  real  meaning  of  the 
parties,  to  be  gathered  from  the  instrument  itself  :  sentences  may  be  trans- 
posed, and  unmeaning  words  rejected.  Killian  v.  Harshaw.  29 — 497;  Row- 
land v.  Rowland,  93 — 214;  Kea  v.  Robinson,  40—373;  Foster  v.  Frost,  15 — 
424:  Iredell  v.  Barbee,  31—250;  Dwiggins  v.  Shaw,  28—46;  Ricks  v.  Pulliam, 
94—225;  Hicks  v.  Bullock,  96—164;  Hamilton  v.  Highlands,  144—279.  Sev- 
eral writings  may  be  construed  together.     Howell  v.  Howell,  29 — 241. 

Of  two  constructions,  that  which  upholds  the  instrument  will  lie  adopted, 
— ut  res  magis  z'aleat  quam  pereat.  Hunter  v.  Anthony,  53 — 385  ;  2  Page 
Cont.,  sec.  1120.  Different  parts  will  be  reconciled,  if  possible  ;  a  repugnant 
clause  may  be  rejected,  if  the  intention  is  clear.  Proctor  v.  Pool,  15 — 370; 
Hawkins  v.  Lumber  Co.,  139 — 160;  Jones  v.  Casualty  Co.,  140 — 262;  Davis  v. 
Frazier,  150—447;  Midgett  v.  Meekins,  160—42. 

General  terms  may  be  restricted  by  particular  terms.  Paalzow  v.  Estate 
Co.,  104—437.  Words  are  taken  most  strongly  against  the  user,  except  in 
grants,  etc.,  from  the  State.  R.  R.  v.  Reid,  64—155 ;  Comrs.  v.  Call,  123— p. 
315  A  single  bond  is  construed  agaimt  f,,e  obligor,  but  a  condition,  which 
is  doubtful,  in  his  favor.  Bennehan  v.  Webb,  28—57.  Insurance  contracts 
are  construed  favorably  to  the  insured.  Kendrick  v.  Ins.  Co.,  124 — 315; 
Grubbs  v.  Ins.  Co..  125—389:  Scull  v.  Tns.  Co..  132—33;  Grier  v.  Ins.  Co..  132 
—542;  Rayburn  v.  Casualty  Co.,  138—379;  Jones  v.  Casualty  Co.,  140—262; 
R.  R.  v.  Casualty  Co.,  145 — 114.  The  court  can  not  supply  words  except  in 
case  of  merely  clerical  mistake.  Cadell  v.  Allen,  99—542:  Sinclair  v.  Hicks, 
116—606;  Wiseman  v.  Green,  127—288:  17  Am.  &  Eng.  Encyc,  19:  Ipock  v. 
Gaskins,  161 — 673. 

Words  are  construed  in  the  ordinary  sense,  and  technical  terms  in  tech- 
nical sense ;  unless  affected  by  the  circumstances  or  usage.  Read  v.  Gran- 
berry,  30—109;  Mining  Co.  v.  Smelting  Co..  122—542;  2  Page  Cont.,  sec. 
1104-1111 ;  3  L.  R.  A.,  859 ;  4  L.  R.  A..  392 :  10  L.  R.  A.,  985 ;  12  L.  R.  A.,  375 ; 


554  EFFECT   OF    CONTRACT. 

9  Cyc,  577 ;  Clark  Cont,  402 ;  Isler  v.  Lumber  Co.,  146 — 556 ;  Lumber  Co. 
v.  Smith,  150 — 253;  Williams  v.  Bitting;  159 — 321;  Temple  Co.  v.  Guano  Co., 
162 — 87.  Instances :  "Accurate  survey,"  horizontal  and  not  surface  measure, 
Gilmer  v.  Young,  122 — 806;  "kiln  run,"  in  sale  of  bricks,  Shute  v.  Cotton 
Mills,  132 — 271;  "forthwith"  means  immediately,  Whitehurst  v.  Ins.  Co.,  52 — 
433;  but  "forthwith"  and  "immediately"  do  not  exclude  any  interval,  but 
only  an  unreasonable  one.  Claus  v.  Lee,  140 — 552 ;  "a  few  hundred  dollars" 
in  a  contract  involving  $30,000,  includes  $2,160,  Swepson  v.  Summey,  64 — 
293 ;  "heirs"  construed  next  of  kin,  Sugg  v.  Tyson,  9 — 472 ;  "signed"  not 
construed  seized  in  a  covenant,  Haiglex  v.  Simpson,  44 — 385. 

Facts  and  circumstances  at  the  time  may  be  used  as  a  "key  to  the  mean- 
ing." Richards  v.  Schlegelmich,  65 — 150;  Starnes  v.  Erwin,  32 — 226;  2  Page 
Cont.,  sec.  1123;  Water  Co.  v.  Trustees,  151 — 171;  Simmons  v.  Groom,  167 — 
271.  Written  words  control  printed  words.  Johnston  v.  Ins.  Co.,  118 — 
643;  2  Page  Cont.,  sec.  1119.  Bad  grammar,  bad  spelling  and  punctuation 
art  not  material.  Cobb  v.  Hines,  44 — 343;  2  Page  Cont.,  sec.  1124.  Practical 
construction  by  the  parties  may  be  resorted  to  in  case  of  doubt.  2  Page 
Cont.,  sec.  1126.  For  discussion  generallv,  see  17  Am.  &  Eng.  Encyc,  2  et 
seq.;  Clark  Contracts,  402;  9  Cyc,  577—591. 

Implied  terms  may  form  part  of  the  contract;  as,  if  price  is  not  named 
market  price  is  implied.  Dickson  v.  Jordan,  34 — 79 ;  implied  warranty  of 
title  in  the  sale  of  personalty.  Sparks  v.  Messick,  65 — 440;  implied  covenant 
in  a  mining  lease,  to  work  the  mine  in  a  reasonable  manner.  Conrad  v. 
Morehead,  89 — 31 ;  and  that  the  person  has  the  requisite  skill  to  perform 
what  he  undertakes.  Ivey  v.  Cotton  Mills,  143 — 189.  The  law  in  force  at 
the  time  enters  into  the  contract.  Hill  v.  Brown,  144—117;  Miller  v.  R.  R., 
141—45;  2  Page  Cont,  sec.  1117;  Morton  v.  Wash.  L.  &  P.  Co.,  84  S.  E.,  1019. 

Conflict  of  laws. — The  law  of  the  country  where  the  contract  is  made  de- 
termines its  meaning  and  effect.  Watson  v.  Orr,  14 — 161 ;  Williams  v.  Carr, 
80—294 ;  Bryan  v.  Telegraph  Co..  133—603 ;  Mills  v.  R.  R.,  141 — 45 ;  1  L.  R. 
A.,  655.  As  to  insurance  contracts,  see  Revisal,  4806 ;  Blackwell  v.  Life  As- 
sociation, 141—117;  Horton  v.  Ins.  Co.,  122—498;  Ins.  Co.  v.  Edwards  & 
Broughton,   124—116. 

2.    Time  as   the   essence   of   the   contract. 

MIZELL  v.  BURNETT, 

Ante  (55). 

(224)   HARDY  v.  WARD, 

150  N.  C,  385,  64  S.  E.,  171—1909. 

This  was  an  action  for  breach  of  contract.  The  defendant  gave 
the  plaintiff  an  option  to  purchase  certain  timber,  "at  any  time 
within  30  days  of  this  agreement"  upon  certain  conditions  therein 
mentioned  ;  the  plaintiff  claimed  to  have  complied  with  the  terms, 
except  that  the  price  was  not  tendered  nor  a  deed  offered  within 
the  30  days.  There  was  a  judgment  for  the  defendant  and  plain- 
tiff appealed. 

Connor,  J.  .  .  .  That  time  was  of  the  essence  of  the  con- 
tract was  recognized  by  both  parties,  and  we  think  correctly  so. 
If  the  parties  agree  upon  a  day  of  performance,  in  the  absence 
of  waiver  or  those  providential  interventions  recognized  as  suffi- 
cient to  relieve  them  from  strict  performance,  the  courts  are  not 


INTERPRETATION    AND    CONSTRUCTION.  555 

permitted  to  do  so.  The  equitable  doctrine  that,  in  executory  con- 
tracts for  the  sale  of  land,  time  is  not  of  the  essense,  is  subject  to 
well-defined  exceptions.  Among  the  circumstances  which  will  take 
a  contract  out  of  the  operation  of  the  doctrine  are  "the  nature  of 
the  property  or  the  surrounding  circumstances  which  would  make 
it  inequitable  to  interfere  with  and  modify  the  legal  right."  Bisph. 
Eq.,  391.  Among  the  contracts  mentioned  by  Mr.  Bispham  which, 
by  reason  "of  the  subject-matter,"  are  exceptions  to  the  doctrine 
are  contracts  for  sale  of  "trades  or  manufactories  or  mines."  He 
further  says :  "As  to  'surrounding  circumstances,'  which  may  ren- 
der time  of  the  essence  of  the  contract,  they  must,  of  course,  de- 
pend upon  the  facts  of  each  particular  case,  such  as  whether  the 
value  of  the  property  has  greatly  diminished,  whether  the  vendee 
has  bought  to  sell  again,  and  so  forth.  Indeed,  in  this  country, 
the  fact  that  land  bears  a  much  more  commercial  character  than 
it  does  in  England,  is  subject  to  more  fluctuations  and  has  more 
of  a  speculative  value,  has  led  to  not  a  few  expressions  of  judicial 
opinion  that  time  ought,  as  a  general  rule,  to  be  considered  as  of 
the  essence  of  a  contract.  But  perhaps  the  safest  statement  of 
the  law  is  that  the  general  rule  is  the  same  in  the  United  States 
as  in  England,  but  that  exceptions  growing  out  of  the  circum- 
stances of  the  individual  transaction  are  more  numerous  and 
looked  upon  with  more  favor."  Bisph.  394.  It  will  be  found,  we 
think,  upon  examination  of  our  reports,  that  the  equitable  doc- 
trine has  usually  been  applied  to  cases  when  upon  the  execution 
of  a  bond  for  title  by  the  vendor  and  a  bond  for  the  purchase 
money  by  the  vendee  the  latter  has  been  let  into  possession  of  the 
land,  and  both  parties,  by  their  conduct,  have  acquiesced  in  the 
status  quo,  notwithstanding  the  lapse  of  time.  This  was  the  case 
in  Falls  v.  Carpenter,  21  N.  C,  237,  followed  in  Scarlett  v.  Hun- 
ter, 56  N.  C,  84,  Pearson,  J.,  saying:  "When  there  is  a  contract 
for  the  sale  of  land,  the  vendee  is  considered,  in  equity,  as  the 
owner,  and  the  vendor  retains  the  title  as  security  for  the  pur- 
chase money.  He  may  rest  satisfied  with  this  security  as  long  as 
he  chooses,  and  when  he  wants  the  money  he  has  the  same  right 
to  compel  payment  by  a  bill  for  a  specific  performance  as  the  ven- 
dee has  to  call  for  a  title."  In  such  cases  "it  is  taken  for  granted 
that  the  parties  are  content  to  allow  matters  to  remain  in  statu  quo 
until  a  movement  is  made  by  one  side  or  the  other."  The  reason 
upon  which  these  and  similar  cases  are  decided  fails  when  the 
subject-matter  of  the  contract  is  standing  timber,  mines  or  prop- 
erty of  which  the  vendee  is  not  let  into  possession  and  the  value 
of  which  is  fluctuating.  While  we  do  not  question  the  wisdom  or 
justice  of  the  doctrine  which  has  received  the  sanction  and  ap- 
proval of  the  chancellors   for  centuries,  we  do  not  think  that  it 


556  EFFECT    OF    CONTRACT. 

should  be  extended  so  as  to  include  contracts  which,  on  account 
of  the  subject-matter,  surrounding  circumstances,  etc.,  would,  in 
its  application,  defeat  the  intention  of  the  parties  and  subject 
property  to  unreasonable  burdens  not  in  contemplation  of  the 
owners  when  entering  into  the  contract  or  giving  an  option.  While 
the  courts  will  not  unduly  restrict  the  freedom  of  contract  or  con- 
stitute themselves  guardians  for  the  owners  of  such  property  by 
refusing  to  enforce  the  execution  of  contracts,  fairly  made,  free 
from  obscurity,  the  terms  of  which  are  understood  by  the  parties, 
we  can  not  fail  to  see  from  the  records  of  this  court  that  by 
printed  contracts,  skilfully  drawn,  sometimes  of  difficult  construc- 
tion, valuable  property  rights  are  disposed  of  and  burdens  of  un- 
certain extent  and  more  uncertain  duration  are  imposed  upon 
lands.  When  the  enforcement  of  these  contracts  is  sought  by  ap- 
peal to  the  equitable  powers  of  the  court,  a  due  regard  to  the 
rights  of  parties  and  the  conservation  of  one  of  the  most  valuable 
natural  resources  of  the  State  imposes  upon  us  the  duty  of  requir- 
ing that  the  contract  shall  be  free  from  ambiguity,  understood  by 
the  parties  and  based  upon  a  valuable  consideration. 

In  this  case  it  is  manifest  that  specific  performance  can  not  be 
had,  because  the  defendant  has  parted  with  his  title  before  the 
suit  was  instituted.  Recognizing  this  difficulty,  plaintiff  asks  for 
damages.  In  this  aspect  of  the  case,  there  being  no  equitable  ele- 
ment, it  must  allege  and  prove  strict  performance  of  the  contract 
on  its  part,  according  to  its  terms  as  modified.  This  it  can  not  do. 
We  have  given  the  record  and  the  carefully  prepared  argument  of 
counsel  a  careful  consideration,  and  are  of  the  opinion  that  there 
is  no  reversible  error. 

Tf  no  time  is  specified,  a  reasonable  time  is  implied.  Mining  Co.  v.  Cotton 
Mills.  143—307;  Michael  v.  Foil.  100—178;  McGowan  v.  R.  R.,  95-417. 
\\  hat  is  a  reasonable  time  is  generally  a  mixed  question  of  law  and  fact, 
not  only  where  the  evidence  is  conflicting,  but  even  in  cases  where  the  facts 
are  not  disputed;  and  the  matter  should  be  decided  by  the  jury  upon  proper 
instructions  on  the  particular  circumstances  of  each  case.  Claus  v.  Lee, 
140—552:  Murray  v.  Smith,  8—42;  11  L.  R.  A.,  526;  Wadded  v.  Reddick, 
24—424;  Warters  v.  Herring,  47—46;  9  Cyc,  613. 

\t  law  time  is  usually  the  essence  of  the  contract;  but  not  in  equity. 
Mason  v.  I  Uarn,  45—88;  Scarlet  v.  Hunter,  56—84;  2  Page  Cont,  sees. 
1159-1166;  10  1..  R.  A..  826;  12  L.  R.  A.,  239;  24  L.  R.  A.,  339;  Clark  Cont., 
408;  Bispham's  Equity,  sees.  391-394;  Brown  v.  Rav,  33—222;  Willard  v. 
Perkins,  44—253;  9  Cyc,  604;  Trogden  v.  Williams,  144— p.  206:  Lumber 
Co.  v.  Corey,  140—462:  McDowell  v.  R.  R.,  144—721;  Shinn  v.  Roberts,  1 
Spencer  (X.  I.).  435,  43  A.  1)..  636;  Benedict  v.  Lynch,  1  Johns.  Ch.,  370, 
7  A.  IX,  492:  Parkin  v.  Thorold,  16  Beav.,  59,  6  E.  R.  C,  503;  Houldsworth 
v.  Evans,  L.  R..  3  H.  L.,  263;   Pollock  Cont.,  504;  6  R.  C.  L.,  896,  898. 


INTERPRETATION    AND    CONSTRUCTION.  557 

3.    Penalties  and  stipulated  damages. 

(225)  THOROUGHGOOD  v.  WALKER, 

47  X.  C,  15—1854. 

Action  of  covenant,  in  which  the  defendant  agreed  to  do  three 
things,  and  to  pay  $2,500,  as  liquidated  damages  in  case  of  failure. 
Appeal  by  plaintiff. 

Battle,  J.  The  bill  of  exceptions  presents  an  interesting  ques- 
tion of  damages  which  has  not  hitherto  been  decided  in  this  State. 
It  has,  however,  been  much  discussed  in  England,  and,  after  some 
conflict  of  judicial  opinions,  seems  to  be  settled  there  upon  just 
and  equitable  principles. 

For  the  better  elucidation  of  the  subject,  it  may  be  proper  to 
give  a  brief  history  of  the  manner  in  which  the  question  came  to 
be  entertained  in  a  court  of   law  ;  and  to   do  this,   we  need  only 
abridge   the   clear   and   accurate   account   contained   in    Mr.    Sedg- 
wick's work  on  Damages.     (See  chap.  16  of  the  second  edition.) 
The  obligation  or  bond  of  the  English  law  is  either  a  single  one, 
in  the  form  of  a  simple  promise  to  pay  money,  under  seal,  or  it 
has  a  clause  appended  declaring  that  the  previous  obligation  shall 
be  void  on  the  payment  of  some  lesser  sum  of  money,  or  the  per- 
formance of  some  particular  act.     The  latter  part  of  the  condition 
of  the  bond  is  that  which  discloses  the  real  nature  of  the  contract, 
and  contains  its  essence.     The   former  part  is  the  penalty.     For- 
merly, if  the  condition  was  not  strictly  complied  with,  as  in  regard 
to  the  payment  of  money  on  a  certain  day,  the  moment  the  day 
was  passed,  the  penalty  became  the  debt,  and  at  law  recoverable; 
and  neither  payment,  nor  tender  after  the  day,  would  avail ;  be- 
cause a  condition  once  broken  was  gone  forever.     If  the  condition 
were  to  do  any  other  thing  than  pay  the  money  and  were  not  ful- 
filled,   the    penalty   again   became   the   debt,    and    was    recoverable 
without  any  reference  whatever  to  the  actual  damages  incurred.  In 
an  action  of  debt  upon  the  bond  for  a  condition  broken,  the  plain- 
tiff  recovered   the   penalty,   and   the   action   could   not   be   relieved 
against  either  by  payment  or  tender;  no  defense  would  avail  but 
a  release  under  seal.     Hence,  the  party  was.  driven   for  relief  to 
the  courts  of  chancery,  which  interposed  and  would  not  allow  the 
plaintiff  to  take  more  than   in  conscience  he  ought;  holding  that 
the  conditions  of  the  bond  expressed  the  agreement  of  the  parties, 
and  that  therefore  the  defaulter  should  not  be  compelled  to  pay 
the  penalty.     This  practice  was  followed  by  the  common  law  court, 
which  ordered  the  proceedings  to  be  stayed  upon  the  defendant's 
bringing  into  court  the  principal,  interest   and  cost.     Finally,  this 


558  EFFECT    OF    CONTRACT. 

discretionary  power  was  confirmed  by  the  statute,  4th  Anne,  chap. 
16,  sees.  12  and  13,  which  provided  that  in  actions  on  bonds,  with 
penalties,  the  defendant  might  plead  payment  after  the  day,  or 
bring  in  the  principal,  interest  and  costs,  and  be  discharged.  This 
statute  has  been  enacted  in  this  State,  and  forms  the  106th  and 
107th  sections  of  the  31st  chapter  of  our  Revised  Statutes.  By 
the  statute  8  and  9,  Will.  Ill,  chap.  2,  sec.  8  (which  forms  the  63d 
section  of  the  same  chapter  of  the  Revised  Statutes),  it  had  been 
declared  not  long  before,  "that  in  all  actions,  etc.,  upon  any  bond 
or  bonds,  or  on  any  penal  sum  for  nonperformance  of  any  cove- 
nants or  agreements  in  any  indenture,  deed  or  writing  certain,  the 
plaintiff  or  plaintiffs  may  assign  as  many  breaches  as  he  or  they 
shall  think  fit,  and  the  jury  upon  the  trial  of  such  action  or  ac- 
tions, shall  and  may  assess,  not  only  such  damages  and  costs  of 
the  suit  as  have  heretofore  been  usually  done  in  such  cases,  but 
also  damages  for  such  of  the  said  breaches  so  to  be  assigned,  as 
the  plaintiff,  on  trial  of  the  same,  shall  prove  to  have  been  broken." 
The  words  "may  assign  breaches,"  have  been  held  to  be  impera- 
tive, and  that  a  judgment  obtained  under  the  former  practice 
would  be  erroneous.     Rose  v.  Rosewell,  5  Term  Rep.,  538. 

These  two  statutes  have  produced  this  result,  that  in  the  case  of 
an  agreement  to  do,  or  to  refrain  from  doing,  any  particular  act 
secured  by  a  penalty,  the  amount  of  the  penalty  is  in  no  sense  the 
measure  of  compensation;  and  the  plaintiff  must  show  the  par- 
ticular injury  of  which  he  complains,  and  have  his  damages  as- 
sessed by  the  jury. 

But  there  is  a  class  of  cases,  in  which  upon  entering  into  an 
agreement,  the  parties,  to  avoid  all  future  inquiries,  as  to  the 
amount  of  damages  which  may  result  from  a  violation  of  the  con- 
tract, may  settle  upon  a  definite  sum,  as  that  which  shall  be  paid 
to  the  party  who  alleges  and  establishes  the  violation  of  the  con- 
tract. In  these  cases,  the  damages  so  fixed  upon,  are  termed 
liquidated,  stipulated  or  stated  damages.  But  even  when  this  course 
has  been  adopted,  the  courts  both  of  law  and  equity  will  not  al- 
ways hold  the  definite  sum  named,  as  liquidated  damages ;  but  if 
from  the  words  used,  and  the  nature  of  the  contract,  they  can 
infer  that  such  was  the  intention  of  the  parties,  they  will  hold  it 
to  be  a  penalty.  If  from  the  nature  of  the  agreement  it  is  clear 
that  any  attempt  to  get  at  the  actual  damages  would  be  difficult, 
if  not  impossible,  the  court  will  incline  to  give  the  stipulated  dam- 
ages which  the  parties  have  agreed  on.  But  if,  on  the  other  hand, 
the  contract  is  such,  that  the  strict  construction  of  the  phraseology 
would  work  absurdity  or  oppression,  the  use  of  the  term  "liqui- 
dated damages"  will  not  prevent  the  courts  from  inquiring  into  the 
actual  injury  sustained,  and  doing  justice  between  the  parties.     In 


INTERPRETATION    AND    CONSTRUCTION.  559 

the  earlier  cases  on  the  suhject,  we  may  not  perhaps  be  able  to 
deduce  any  definite  rule,  but  the  later  decisions  will  be  found  to 
establish  the  one,  which  we  have  stated,  and  which  is  extracted 
from  Mr.  Sedgwick's  treatise.  Without  examining  all  the  cases 
on  the  subject,  we  will  refer  to  those  cited  by  the  defendant's 
counsel,  which  we  think  are  decisive  in  the  case  before  us. 

[The  court  here  discusses  the  cases  of  Ashley  v.  Weldon,  2  Bos. 
and  Pul.,  346 ;  Kemble  v.  Farren,  6  Bing.  Rep.,  141 ;  Hamer  v. 
Flintoff,  9  Mees.  &  Wels.,  678;  Green  v.  Price,  13  Mees.  &  Wels., 
695;  Price  v.  Green,  16  Mees.  &  Wels.,  346,  to  sustain  the  doc- 
trine.] 

The  principle  of  the  rule  has  been  recognized  in  the  Supreme 
Court  of  the  United  States,  and  in  the  courts  of  many  of  the 
States.  See  Tayloe  v.  Sandiford,  7  Wheat.,  13;  Dakin  v.  Wil- 
liams, 17  Wend.  Rep.,  447;  S.  C.  in  Error,  22  Wend,  201,  and 
the  cases  in  other  States  in  a  note  to  419,  page  — ,  of  Sedgewick 
on  Damages   (2  Ed.). 

Let  us  now  apply  the  rule,  which  we  have  thus  deduced  from 
the  cases  to  the  one  before  us.     The  defendant,  in  consideration  of 
his  purchase  from  the  plaintiff  of  one-half  of  the  schooner,  John 
F.  Davenport,  covenanted  to  do  three  things :  first,  to  pay  one-half 
of  the  debt  due  by  the  plaintiff  to  Doyle,  Darvin  &  Rudder,  such 
half  amounting  to  $675  ;  secondly,  to  pay  off  a  note  due  from  the 
plaintiff  to  Casey  &  Davis  for  $720;  and,  thirdly,  to  permit  the 
plaintiff  to  redeem  half  of  the  vessel,  by  repaying  these  sums  with 
interest,  at  any  time  within  three  years  after  the  sale;  and  if  he 
failed  to  comply  with  these  terms,  he  agreed  to  pay  the  plaintiff 
$2,500  as   liquidated   damages.      It   is   manifested  that   if   the   de- 
fendant had  failed  to  pay  both,  or  either  of  the  sums  which  he 
agreed  to  do,  he  would  have  broken  the  covenant  as  effectually  as 
he  did  by  failing  to  reconvey.     If  the  sum  agreed  on  by  the  par- 
ties is  to  be  construed  liquidated  damages,  as  the  term  imports, 
then  the  defendant  will  be  bound  to  pay  a  greater  sum  for  a  less ; 
which  can  not  be,  as  that,  according  to  all  the  cases,  is  a  penalty. 
The  sum,  too,  agreed  to  be  paid  by  the  way  of  damages,  is  for  the 
breach  of  any  of  the  stipulations  which  are  of  different  degrees  of 
importance  and  value,  and  so  comes  directly  within  the  rule  laid 
down  in  the  cases  to  which  we  have  referred.     Nor  is  the  damage 
for  the  breach   assigned,   to   wit,   the  nonreconveyance   of   a   half 
of  the  schooner  in  question,  so  entirely  uncertain  as  to  bring  the 
case  within  the  rule  of  stipulated  damages.     We  have  not  learnt 
that  the  half  of  the  schooner  was  of  such  peculiar  value  to  the 
plaintiff,  as  to  make  altogether  uncertain  his  damage  for  the  de- 
fendant's failure  to  reconvey  it  to  him.    The  charge  of  His  Honor 


560  EFFECT    OF    CONTRACT. 

in  relation  to  the  damage   was   right,  and  the  judgment  must  be 
affirmed. 

Per  Curiam.  Judgment  affirmed. 

See  Revisal,  1523.     Courts  will  generally  construe  the  contract  as  a  penalty 
rather    than    stipulated    damages.      Burrage    v.    Crump,    48 — 330 ;    Gordon    v. 
Brown,  39—399;  Lindsay  v.  Anesley,  28—186;  Morris  v.  Saunders,  85—138 
Pendleton  v.  Elec.  Light  Co.,  121—20;  Dunavant  v.  R.  R.,  122—999;  Whee 
don  v.  Am.   Bonding  &  Tr.   Co.,    128—69 ;    Disosway   v.   Edwards,    134 — 254 
Rhvne  v.  Rhvne.  160—559 :  10  L.  R.  A.,  826 ;  Monmouth  Park  Asso.  v.  Wallis 
Iron  Works,  55  N.  J.  L..  132,  19  L.  R.  A.,  456,  39  A.  S.  R.,  626 ;  Williams  v 
Vance,  9  S.  C,  344.  30  A.  R.,  28;  Evans  v.  Moseley,  84  Kan.,  32Z,  114  Pac. 
374,  50  L.  R.  A.  (N.  S.),  890;  4  Am.  &  Eng.  Encyc,  699;  19  lb.,  396;  Bisph 
Eq.,  sees.  178,  179;  Clark  Cont,  411;  Page  Cont.,  sec.  1169;  13  Cyc,  89;  6  E 
R.  C,  540;  Mord.  &  Mc.  Rem.,  636. 

In  contracts  for  service,  whether  a  provision  to  forfeit  a  certain  part  of 
the  wages  for  failure  to  give  notice  to  quit  will  he  enforced,  seems  to  de- 
pend upon  its  being  reasonable  in  the  particular  case.  Pottsville  Iron  & 
Steel  Co.  v.  Good,  116  Pa.  St.,  385,  2  A.  S.  R.,  614;  Schmipf  v.  Tenn.  Mfg. 
Co.,  86  Tenn.,  219,  6  A.  S.  R.,  832;  Tenn.  Mfg.  Co.  v.  Jones,  91  Tenn.,  154, 
30  A.  S.  R.,  865 ;  Pierce  v.  Whittlesey,  58  Conn.,  104,  7  L.  R.  A.,  286. 


DISCHARGE    OF    CONTRACT.  561 


III.  Discharge  of  Contract. 


CHAPTER  I. 

By  Agreement  of  Parties. 

Sec.  1.    Waiver,  rescission  and  cancellation. 

(226)   LIPSCHUTZ  v.  WEATHERLY, 

140  X.  C,  365,  53  S.  E.,  132—1906. 

Civil  action  for  price  of  cigars  sold  and  delivered,  in  which  de- 
fendants admitted  sale  and  set  up  a  counterclaim  for  damages  for 
breach  of  contract.  Plaintiff  and  defendants  entered  into  a  con- 
tract in  1901,  by  which  plaintiff  agreed  to  sell  to  defendants  cigars 
at  a  reduced  price,  terms  "cash  in  ten  days  from  shipment,  less 
two  percent  discount,"  and  also  to  give  defendants  control  of  cer- 
tain territory  for  the  sale  of  the  cigars  as  long  as  they  should 
"push  the  sale  of  the  cigars."  In  1904  plaintiff  notified  the  de- 
fendants that  he  would  no  longer  comply  with  the  contract  on  ac- 
count of  the  defendants'  failure  to  make  payment  above  specified; 
but  proposed  to  sell  defendants  cigars  on  the  same  terms  as  they 
were  sold  to  others,  but  would  fill  no  order  until  the  defendants 
sent  him  telegram  that  the  previous  contract  was  canceled.  This 
telegram  was  sent,  but  defendants  claimed  that  they  had  complied 
with  their  contract,  had  built  up  a  good  trade  and  were  damaged 
by  the  plaintiff's  failure  to  comply.  There  was  a  judgment  for 
plaintiff,  and  defendants  appealed. 

Connor,  J.  The  real  controversy  between  the  parties  is  pre- 
sented by  the  defendants'  contention:  1st.  That  conceding  the 
facts  to  be  as  shown  by  the  correspondence,  there  was  no  valid 
rescission  of  the  original  or  substitution  by  new  contract,  for  that 
the  agreement  to  rescind  is  not  supported  by  any  valuable  con- 
sideration. 2d.  That  if  there  was  a  rescission  by  mutual  consent, 
their  right  to  recover  damages  sustained  prior  to  the  breach  was 
not  waived  or  surrendered.  It  is  well  settled  that  a  contract  may 
be  discharged  by  an  express  agreement  that  it  shall  no  longer  bind 
either  party.  This  is  usually  and  correctly  termed  a  rescission. 
It  is  equally  well  settled  that  such  an  agreement  to  operate  as  a 
discharge  must  be  supported  by  a  valuable  consideration,  which 
may  either  be  a  payment  in  money,  something  of   value,  or  by  a 


562  DISCHARGE    OF    CONTRACT. 

release  of  mutual  obligations  arising  out  of  the  contract.  In  Brown 
v.  Lumber  Co.,  117  N.  C,  287,  it  is  said:  "When  the  contract 
is  wholly  executory,  a  mere  agreement  between  the  parties,  that  it 
shall  no  longer  bind  them  is  valid,  for  the  discharge  of  each  by 
the  other,  from  his  liabilities  under  the  contract  is  a  sufficient  con- 
sideration of  the  promise  of  the  other  to  forego  his  rights.  .  .  . 
If  a  contract  has  been  executed  on  one  side,  an  agreement  that  it 
shall  no  longer  be  binding,  without  more,  is  void  for  want  of  a 
consideration.  Clark  on  Contracts,  418.  Of  the  several  methods 
by  which  a  contract  may  be  discharged,  one  is  by  substitution  of  a 
new  contract,  the  terms  of  which  differ  from  the  original.  In  such 
cases  the  release  of  the  obligations  of  the  old  and  the  substitution 
of  new  obligations  constitute  valuable  considerations."  "It  is  also 
well  settled  that  ordinarily  a  written  contract,  before  breach,  may 
be  varied  by  a  subsequent  oral  agreement,  made  on  a  sufficient 
consideration,  as  to  the  terms  of  it  which  are  to  be  observed  in  the 
future.  Such  a  subsequent  oral  agreement  may  enlarge  the  time 
of  performance,  or  may  vary  other  terms  of  the  contract,  or  may 
waive  and  discharge  it  altogether."  Hastings  v.  Lovejoy,  140 
Mass.,  261.  In  McCreery  v.  Levy,  119  N.  Y.,  1,  Andrews,  J., 
says :  "The  agreement  annulling  the  prior  contract  is  supported  by 
an  adequate  consideration.  The  new  obligation  which  G  assumed 
under  the  contract  of  October  25,  1882,  was  alone  a  sufficient  con- 
sideration. There  was  a  consideration  also  in  the  mutual  agree- 
ment of  the  parties  to  the  prior  contract  which  was  still  executory, 
although  in  the  course  of  performance,  to  discharge  each  other 
from  reciprocal  obligations  thereunder  and  to  substitute  a  new 
and  different  agreement  in  the  place  thereof."  The  principle  is 
well  illustrated  in  Dreifus  Block  &  Co.  v.  Salvage  Co.,  194  Penn., 
475.  Assuming  that  the  intention  of  the  plaintiff  to  rescind  the 
contract,  as  communicated  by  him  to  defendants  on  May  28,  was  a 
breach  of  its  terms,  the  defendants  may  have  stood  by  their  rights 
under  the  contract  and  sued  for  such  damages  as  they  sustained. 
Instead  of  doing  so,  they  desired  to  continue  purchasing  cigars 
from  the  plaintiff,  who  refused  to  sell  on  any  other  terms  than  an 
assent  to  the  rescission.  The  defendants  elected  to  assent  to  plain- 
tiff's terms,  deeming  it  conducive  to  their  interest  to  do  so.  The 
status  of  the  parties  at  this  time  is  well  illustrated  by  what  is  said 
by  Mr.  Justice  Dean  in  Dreifus  Co.  v.  Salvage  Co.,  supra.  In 
speaking  of  a  breach  of  a  contract  by  defendant  to  deliver  steel 
at  a  fixed  price,  he  said:  "Assume  .  .  .  that  there  was  a  distinct 
declaration  that  the  company  would  not  perform  its  contract;  still 
if  anything  can  be  clear,  it  is,  that  above  all  things,  plaintiff  did 
not  want  a  lawsuit  for  damages  ;  at  that  stage,  their  damages  were 
wholly  uncertain,  depending  on  the  fluctuating  price  of  steel;  they 


BY    AGREEMENT.  563 

did  know  they  wanted  the  steel ;  what  damage  they  might  want 
by  reason  of  the  defendant's  breach,  or  what  they  might  sustain, 
they  did  not  know.  In  this  dilemma  they  sought  for  and  obtained 
a  new  contract  expressly  canceling  the  old.  .  .  .  They  agreed  to 
accept  a  fixed  quality  and  quantity  of  merchandise  at  fixed  times 
and  prices,  instead  of  the  uncertain  event  of  a  lawsuit."  In 
Goebel  v.  Linn,  47  Mich.,  489,  plaintiff  had  made  a  contract  to 
furnish  defendant,  who  was  a  brewer,  ice,  during  the  season  at  a 
fixed  price.  During  the  life  of  the  contract  he  notified  defendant 
that  he  would  not  furnish  any  more  ice  unless  the  defendant  paid 
a  very  much  larger  price.  Defendant,  after  protesting,  assented 
to  the  change  in  price  and  purchased  the  ice  at  the  price  for  which 
the  action  was  brought.  He  set  up,  as  a  defense,  that  the  note  for 
the  price  of  the  ice  was  without  consideration,  etc.  Cooky,  J., 
said  that  the  defendant  had  a  right  to  refuse  to  buy  the  ice  at  the 
advanced  price  and  sue  for  damages  for  breach  of  contract.  "But 
defendants  did  not  elect  to  take  that  course.  They  chose,  for 
reasons  they  must  have  deemed  sufficient  at  the  time,  to  submit  to 
the  company's  demand  and  pay  the  increased  price  rather  than 
rely  upon  their  strict  rights  under  the  existing  contract."  We  are 
of  the  opinion  that  the  defendants  elected  to  consent  to  the  can- 
cellation or  rescission  of  the  original  contract,  in  consideration  of 
the  substituted  contract  by  which  the  plaintiff  agreed  to  sell  them 
cigars  upon  the  terms  set  out  in  the  letters  of  May  28  and  June  6, 
1904,  and  the  telegram  of  June  9,  and  that  this  consent  was  based 
upon  a  valuable  consideration.  The  defendants  say  that  conced- 
ing this  to  be  true,  their  right  to  recover  damages  which  had  ac- 
crued prior  to  such  rescission  was  not  affected  thereby.  Certainly 
after  a  contract  is  discharged,  either  by  rescission  or  by  substitu- 
tion of  a  new  contract,  no  action  can  be  maintained  on  the  original 
contract.  For  any  benefits  accruing  to  either  party  by  perform- 
ance of  the  contract,  unless  expressly  released,  an  action  as  upon 
a  quantum  meruit,  if  it  be  labor  performed,  or  quantum  valcbat, 
if  property  received,  may  be  maintained.  It  is,  not  upon  the  con- 
tract, but  upon  an  implied  assumpsit. 

In  Dreifus  Co.  v.  Salvage,  supra,  it  is  said:  "The  term  cancel- 
lation of  a  contract  implies  a  waiver  of  all  rights  thereunder  by 
the  parties.  If  after  a  breach  by  one  of  the  parties  they  agreed 
to  cancel  it  and  make  a  new  contract  with  reference  to  its  subject- 
matter,  that  is  a  waiver  of  any  cause  growing  out  of  the  original 
breach,  and  this  is  the  rule  even  though  the  original  contract  was 
under  seal."  We  have  discussed  the  case  upon  the  assumption  that 
the  plaintiff  made  the  first  breach  of  the  contract.  It  is  by  no 
means  clear  that,  upon  the  admitted  failure  by  the  defendants  to 
pay  the  bills  for  the  cigars  within  ten  days,  plaintiff  was  not  re- 


564  DISCHARGE    OF    CONTRACT. 

leased  from  further  performance  on  his  part.  It  is  often  difficult 
to  say  when,  in  a  bilateral  contract  such  as  this,  stipulations  are 
of  the  essence  of  the  contract,  and  the  failure  to  perform  them 
releases  the  other  party  from  further  performance.  However  this 
may  be,  there  was  certainly  sufficient  doubt  to  sustain  the  agree- 
ment to  rescind  or  to  substitute  a  new  contract.  It  is  well  settled 
that  the  release  of  controverted  claims  constitutes  a  valuable  con- 
sideration. It  may  well  be  that  the  defendants  preferred  to  enter 
into  the  new  contract  for  the  purpose  of  securing  the  cigars  with 
which  to  supply  their  trade,  rather  than  engage  in  litigation  of 
doubtful  result.  However  this  may  be,  they  did  so  elect,  and  hav- 
ing procured  the  cigars  upon  their  express  agreement  to  rescind 
the  original  contract,  they  have  no  just  right  to  complain  if  re- 
quired to  do  so.  If  they  intended  reserving  any  demand  for  dam- 
ages, common  fairness  required  them  to  say  so.  Upon  an  exam- 
ination of  the  entire  record  we  find  no  error. 

The  judgment  must  be  Affirmed. 

FESTERMAN  v.  PARKER, 
Ante   (83). 

Hassard-Short  v.  Hardison,  114—482,  117—60;  Teeter  v.  Manfg.  Co.,  151 — 
602;  Palmer  v.  Lowder,  167—331;  McCreery  v. -Dav,  119  N.  Y.,  1,  16  A.  S. 
R.,  793,  6  L.  R.  A.,  503 ;  9  Cvc,  593 ;  6  R.  C.  L.,  921 ;  Morecraft  v.  Allen,  78 
X.  T.  L.,  729,  75  Atl.,  920,  L.  R.  A.  1915  B,  1.  A  as  tenant  of  B  held  over  at 
the  expiration  of  the  lease;  B  made  him  a  proposition  for  a  new  lease  on 
different  terms ;  A  did  not  accept,  hut  vacated ;  B  thereby  waived  his  right 
under  the  old  lease.  Drake  v.  Wilhelm,  109 — 97.  A  ordered  machinery  from 
B,  to  be  shipped  in  ten  days ;  in  four  or  five  days  A  wrote  to  B  not  to  ship 
the  machinery,  and  offered  to  pay  damages ;  B  did  not  answer  this  letter  nor 
ship  the  machinery;  this  was  evidence  of  a  rescission.  Reavis  v.  Crenshaw, 
105 — 369.  In  the  cancellation  of  an  executory  contract  for  the  sale  of  land, 
the  law  implies  a  promise  on  the  part  of  the  vendor  to  repay  the  purchase- 
monev.  Beaman  v.  Simmons,  76 — 43 ;  and  for  improvements.  Smith  v.  Stew- 
art, 83—406;   Houston  v.   Sledge,   101—640. 

For  waiver  of  condition  in  insurance  contract,  see  Horton  v.  Tns.  Co.,  122 — 
498.  Rescission  of  insurance  contract.  Waters  v.  Annuity  Co.,  144 — 663; 
Murphy  v.  Ins.  Co.,  167 — 334. 

Sec.  2.    Substitution. 

(227)   SIMMONS  v.  CAHOON, 

68  N.  C,  393—1873. 

Civil  action  in  which  there  was  a  judgment  for  the  plaintiff,  and 
defendant  appealed. 

Ki;  \i»i:,  J.  The'  plaintiff  sold  defendant  a  horse,  for  which  the 
defendant  was  to  pay  at  a  given  time  $100  in  bank  notes  or  $125 
in  Confederate  notes,  at  the  defendant's  option.     At  the  time  speci- 


BY    AGREEMENT.  565 

fied  the  defendant  offered  to  pay  $125  in  Confederate  notes,  taking 
out  his  pocketbook  and  showing  the  money.  The  plaintiff  refused 
to  take  the  Confederate  notes  because  of  their  depreciation,  and 
demanded  that  the  defendant  should  give  him  his  bond  for  $100, 
and  differed  with  the  defendant  as  to  the  terms  of  the  contract. 
The  plaintiff  then  said  he  would  take  $125  in  State  scrip,  to  which 
the  defendant  assented,  and  offered  to  go  immediately  home,  some 
distance  off,  and  get  the  scrip.  But  the  plaintiff  said  no,  I  will 
call  at  your  house  as  I  pass  this  evening,  and  get  it.  This  was 
assented  to  by  the  defendant.  When  the  plaintiff  passed  the  de- 
fendant's house,  the  defendant  had  the  money  ready  and  called  to 
the  plaintiff  to  stop  and  get  it.  Plaintiff  said  he  would  call  on  his 
return  and  get  it.  But  he  did  not  call,  and  never  has  called;  and 
the  defendant  has  always  been  ready.  But  the  State  scrip  and  the 
Confederate  notes  became  worthless  by  the  results  of  the  war. 

Under  the  charge  of  His  Honor  the  case  was  made  to  turn  upon 
the  validity  of  the  tender  of  the  Confederate  notes ;  His  Honor  in- 
structing the  jury  that  it  was  not  a  sufficient  tender.  However 
that  may  be,  it  is  outside  of  the  case;  because  the  first  contract 
was  rescinded,  and  the  parties  compromised  their  controversy  by 
entering  into  the  new  contract.  By  the  terms  of  the  new  contract, 
the  plaintiff  was  to  call  at  defendant's  house  and  get  the  State 
scrip.  This  he  has  never  done.  And  having  failed  to  comply  with 
his  part  of  the  contract  to  call  at  defendant's  house,  which  was 
precedent  to  the  defendant's  undertaking  to  pay,  he  can  not  recover. 

The  case  of  Erwin  v.  W.  N.  C.  R.  R.  Co.,  65  N.  C,  79,  is  di- 
rectly in  point.     There  is  error. 

Per  Curiam.  Venire  de  novo. 

See  preceding  case,  and  Brown  v.  Mfg.  Co.,  117—287;  6  L.  R.  A.,  503.  A 
new  contract  inconsistent  with  the  terms  of  the  old  one  is  a  rescission,  either 
entirely  or  pro  tanto.  Sizemore  v.  Morrow,  28—54;  3  Page  Cont.,  sees. 
1339-1350:  Clark  Cont.,  418,  420;  Morecraft  v.  Allen,  78  N.  J.  L.,  729,  75 
Atl.,  920,  54  L.  R.  A.  (N.  S.),  1,  and  note;  6  R.  C.  L.,  923. 

For  the  acceptance  of  part  of  debt  in  satisfaction,  see  Koonce  v.  Russell, 
103-179:  ante   (85). 

Novation.— A  was  indebted  to  B  by  note  and  mortgage;  C  agreed  with 
A  to  settle  the  debt,  and  gave  his  note  to  B,  which  was  accepted  as  satis- 
faction; this  was  a  discharge  of  A's  debt.  Walker  v.  Mebane,  90—259;  5  L. 
R.  A.,  414;  6  L.  R.  A..  668:  3  Page  Cont..  351:  Clark  Cont.,  422;  21  Am.  & 
Eng.  Encyc,  660:  9  Cyc,  595. 


566  DISCHARGE    OF    CONTRACT. 

Sec.  3.  Form  of  discharge. 

1.    Contracts  under  seal. 

.     (228)  ADAMS  v.  BATTLE, 

125  N.  C,  152,  34  S.  E.,  245—1899. 

Civil  action  to  recover  money  under  an  agreement  made  with 
defendant's  testator.  There  was  a  judgment  for  plaintiff,  and  de- 
fendants appealed. 

Faircloth,  C.  J.  On  January  22,  1890,  the  plaintiff,  by  deed, 
conveyed  a  large  amount  of  real  and  personal  property  to  W.  H. 
Pace  in  trust  to  pay  plaintiff's  debts  in  the  manner  described,  with 
power  to  collect,  sell  the  property  at  private  or  public  sale,  and 
to  do  the  usual  duties  of  a  trustee  in  such  cases.  Pace  died  in 
April,  1893,  and  this  action  was  brought  in  October,  1896,  and  it 
is  agreed  that  the  trust  was  closed  in  the  lifetime  of  the  trustee, 
except  as  to  the  matter  controverted  in  this  action.  The  deed 
provided  that  the  trustee .  might  retain  4  percent  commissions  on 
receipts  and  disbursements,  that  is,  8  percent  on  the  total  amount, 
which  was  $2,461.01. 

The  defendants  are  the  personal  representatives  of  the  trustee. 
The  plaintiff  was  allowed  to  prove  by  parol  that,  some  days  after 
the  deed  was  executed,  Pace  agreed  with  plaintiff  that  if  there  was 
no  litigation  in  the  courts  respecting  the  trust  he  would  charge 
only  2Yi  percent  on  receipts  and  disbursements.  He  also  proved 
that  there  was  no  suit  brought,  and  there  is  no  evidence  of  any 
unusual  trouble  in  executing  the  trust.  The  defendant  excepted  to 
the  admission  of  this  parol  evidence  and  to  the  charge  of  the  court 
in  respect  thereto.     The  verdict  was  for  the  plaintiff. 

The  defendant's  contention  is  that  the  evidence  is  incompetent  to 
prove  that  the  parties  agreed  subsequently  that  the  commissions 
should  be  less  than  specified  in  the  deed,  unless  done  in  as  solemn 
a  manner  as  the  deed  was  made,  that  is,  under  seal,  under  the 
maxim  eo  ligamine,  quo  ligatur.  It  seems  that  no  verbal  agree- 
ment contemporaneous  with  the  execution  of  an  instrument  under 
seal  will  be  heard  to  contradict  or  vary  its  terms.  The  effect  of  a 
subsequent  agreement  by  the  same  parties  has  been  much  discussed 
by  different  courts,  and  in  some  of  the  States  the  matter  is  put  to 
rest  by  legislation.  But  we  are  informed  by  counsel  that  the  ques- 
tion has  not  yet  been  decided  in  our  State,  and  we  find  no  such 
decision. 

It  was  an  ironclad  maxim  of  the  common  law  that  an  obligor 
would  only  be  released  by  an  instrument  of  as  high  dignity  as  that 
by  which  he  was  bound,  that  is,  being  obligated  by  a  seal  he  could 


BY    AGREEMENT.  567 

be  released  only  by  an  instrument  under  seal.  Technically,  this  is 
the  rule  of  modern  times,  unless  changed  by  statute,  but  practically 
it  is  seldom  enforced.  To  this  rule  the  exceptions  were  and  are  so 
numerous  that  seldom  can  the  rule  be  applied.  In  an  action  on 
the  bond  or  other  sealed  instrument,  the  debtor  pleads  and  proves 
the  actual  receipt  of  the  money  by  the  obligee ;  no  court  could  hes- 
itate to  hold  this  to  be  a  release  and  discharge  of  the  bond.  Sup- 
pose the  debt  secured  by  a  mortgage,  a  release  and  discharge  need 
not  be  under  seal.  Suppose  the  principal  of  a  note  under  seal  pays 
the  debt  and  the  sureties  are  sued  on  the  same,  would  any  court 
require  them  to  show  that  their  principal  had  been  discharged 
under  seal?  Suppose  again,  that  a  landlord  leases  land  for  a  term 
of  years  under  seal,  and  during  the  term  the  premises  are  greatly 
damaged  without  any  fault  of  the  lessee,  or  that  they  have  greatly 
depreciated  in  value,  or  have  become  partially  unfit  for  the  pur- 
pose intended,  and  the  landlord,  conscious  of  these  and  similar 
facts,  agrees  verbally  with  the  lessee  that,  for  the  balance  of  the 
term  he  will  take  less  rent  than  is  stipulated  in  the  deed;  would 
not  the  lessee  be  protected  by  such  agreement?  If  proof  of  pay- 
ment will  discharge,  why  should  not  an  agreement  to  discharge 
have  the  same  effect  between  the  same  original  parties? 

It  seems  difficult  to  find  a  case  where  the  parties,  bound  to  each 
other  by  an  instrument  under  seal,  will  not  be  discharged  by  parol 
proof  of  facts  if  they  are  sufficient  in  themselves  to  constitute  a 
discharge.  In  such  matters,  the  defenses  are  performances  in  pais, 
and  are  probably  of  more  value  to  business  men  than  the  dignity 
of  being  sheltered  by  a  seal.  The  chief  reasons  for  the  sacredness 
of  the  seal  have  ceased,  since  statutes  and  courts  of  equity  have 
been  liberally  removing  the  hard  places  of  the  common  law.  The 
dignity  of  the  seal  is  due  more  to  the  original  form  of  the  instru- 
ment than  to  the  real  interest  and  intention  of  the  parties. 

Whether  the  trustee  intended  to  retain  8  percent  commissions 
we  are  not  informed,  as  he  had  recently  before  his  death  closed 
out  the  other  trust  matters,  nor  is  this  very  material  now.  He 
was  a  practicing  attorney  and  understood  technicalities  of  the  law, 
and  we  must  assume  that  when  he  made  the  parol  agreement  he 
did  so  in  good  faith.  We  are  led  to  the  conclusion  that  the  evi- 
dence was  admissible  and  that  the  charge  of  the  court  was  not 
erroneous.  The  result  seems  to  be  full  justice  without  the  in- 
fringement of  any  sound  principle  of  law.  |~Tne  court  then  holds 
that  the  action  is  not  barred  by  the  statute  of  limitations.] 

The  surrender  of  a  bond  to  the  obligor  and  its  cancellation  have  the  same 
leo-al  effect  as  a  deed  in  writing,  to  wit;  a  release  of  the  cause  of  action  on 
the  bond.  Paxton  v.  Wood,  77—11.  Where  the  note  for  the  purchase- 
money  is  given  up  and  the  deed  is  intended  to  be,  but  is  not  surrendered, 
subsequent  registration  does  not  prevent  its  cancellation  in  equity.     Love  v. 


568  DISCHARGE    OF    CONTRACT. 

Belk,  36—163.  The  surrender  of  an  unregistered  deed  operates  as  a  dis- 
charge. Beaman  v.  Simmons,  76 — 43;  Davis  v.  Inscoe,  84—396;  Austin  v. 
King,  91—286;  Hare  v.  Jernigan,  76—471;  but  not  after  registration.  Linker 
v.  Long,  64—296;  Herring  v.  Warwick,  155—345.  A  parol  agreement  with 
the  principal  in  a  bond  to  extend  the  time  discharges  the  surety.  Carter  v. 
Duncan.  84—676.  But  at  common  law  a  parol  discharge  of  a  bond  was  in- 
valid.    Bank  v.  Littlejohn,  18—563.     See  Johnson  v.  Johnson,  10—556. 

MILLER  v.  THAREL, 

Ante  (200). 
2.     Simple  contracts  in  writing. 

(229)   MAY  v.  GETTY, 

140  X.  C,  310,  53  S.  E.,  75—1905. 

Civil  action  for  specific  performance  of  contract  to  convey  land. 
The  plaintiff  made  a  contract  to  sell  the  land  to  one  Maxwell,  who 
never  tendered  any  money,  except  $100  paid  at  the  time,  and 
never  demanded  any  deed,  but  told  plaintiff  he  could  not  pay  for 
it,  and  to  make  his  money  out  of  the  land.  The  papers  were  not 
given  up,  but  Maxwell  left  the  State  and  had  been  gone  several 
years,  when  plaintiff  sold  to  defendant.  The  defendant  resists  the 
action  on  the  ground  that  plaintiff  can  not  make  a  good  title.  The 
court  held  tbat  Maxwell  had  abandoned  the  contract  and  relin- 
quished his  rights.  There  were  other  questions  involved,  but  not 
on  this  point.  There  was  a  decree  for  plaintiff,  and  defendant 
appealed. 

Wai.kkk,  J.  (There  were  three  questions  considered, 

the  first  being,  "Did  Maxwell  agree  with  May  to  rescind,  and 
thereupon  abandon  the  contract  of  sale?") 

It  is  now  well  settled  that  parties  to  a  written  contract  may,  by 
parol,  rescind  or  by  matter  in  pais  abandon  the  same.  Faw  v. 
Whittington,  72  N.  C,  321;  Taylor  v.  Taylor,  112  N.  C,  27; 
Holden  v.  Purefoy,  108  N.  C,  163;  Riley  v.  Jordan,  75  N.  C, 
180;  Gorrell  v.  Alspaugh,  120  N.  C,  362."  In  the  case  first  cited, 
Bynum,  ].,  for  the  court,  says:  "The  contract  is  considered  to 
have  remained  in  force  until  it  was  rescinded  by  mutual  consent, 
or  until  the  plaintiffs  did  some  acts  inconsistent  with  the  duty  im- 
posed upon  them  1>v  the  contract  which  amounted  to  an  abandon- 
ment.*' Dula  v.  Cowles,  52  N.  C,  290;  Francis  v.  Love,  56  N.  C, 
321.  What  will  amount  to  an  abandonment  of  a  contract  is  of 
course  a  question  of  law  and  the  acts  and  conduct  which  are  relied 
on  to  constitute  the  abandonment  should  be  clearly  proved,  and 
they  must  be  positive,  unequivocal,  and  inconsistent  with  the  ex- 
istence of  a  contract,  but  when  thus  established  they  will  bar  the 
right  to  specific  performance.     Miller  v.  Pierce,  104  N.  C,  390; 


BY    AGREEMENT.  569 

Faw  v.  Whittington,  supra;  Holden  v.  Purefoy,  supra.  We  are 
of  the  opinion  that  the  facts  found  by  the  referee  and  the  court 
are  sufficient  to  show  a  rescission  of  the  contract  and  an  abandon- 
ment of  all  rights  under  it  by  Maxwell.  They  are  quite  as  signifi- 
cant for  the  purpose  of  indicating  the  intent  of  the  parties,  and 
especially  the  purpose  of  Maxwell  to  relinquish  all  his  rights,  as 
any  we  find  in  the  books  which  have  been  held  sufficient  to  defeat 
a  claim  for  specific  performance  or  the  assertion  of  an  equity  in 
the  property.  Francis  v.  Love,  supra.  There  was  evidence  to 
sustain  the  findings  of  fact  as  to  the  rescission  and  abandonment, 
and  this  being  so,  the  findings  will  not  be  reviewed  by  us.  Battle 
v.  Mayo,  102  N.  C,  413. 

See  also  Devereux  v.  Burgwyn,  40 — 351:  Thornburgh  v.  Mastin,  93 — 258: 
Banks  v.  Bank.  77 — 186:  Palmer  v.  Lowder,  167 — 331;  Faust  v.  Rohr,  167 — 
360. 

Sec.   4.  Provision  for  discharge  in  the   contract.   Condition 

subsequent. 

(230)    SUGG  v.   INSURANCE  CO., 

98  N.  C,  143,  3  S.  E..  372—1887. 

Civil  action  on  a  policy  of  fire  insurance,  which  contained  among 
other  provisions  a  clause  against  other  insurance.  The  plaintiff 
took  out  two  policies  on  the  property  in  other  companies,  without 
the  knowledge  or  consent  of  the  defendant. 

There  was  a  judgment  for  the  defendant,  and  plaintiff  appealed. 

Merrimon,  J.  The  contract  of  insurance  embodied  and  set 
forth  in  the  policy  sued  upon  must  receive  a  reasonable  and  just 
interpretation,  and  the  intention  of  the  parties  to  it,  thus  ascer- 
tained, must  prevail.  Contracts  of  this  character,  though  in  some 
respects  peculiar,  are  governed  by  the  same  principles  that  govern 
other  contracts,  and  are  not  different  from  others  as  to  the  rules 
of  interpretation  applicable,  in  varying  aspects  of  them.  The  pur- 
pose of  courts  in  construing  them,  is  to  ascertain  what  the  parties 
mean  and  intend — what  they  have  respectively  agreed  to  do  or  not 
to  do — how  they  have  agreed  to  be  affected — to  be  bound  or  not  to 
be  bound.  It  is  not  the  province  of  the  court  to  amend,  modify  or 
make  a  contract  for  the  parties  ;  or  to  reform  their  contract  so  as 
to  render  it  reasonable,  expedient  and  just,  or,  in  the  absence  of 
fraud,  accident,  or  mutual  mistake,  to  relieve  them  from  misad- 
venture, inadvertence,  hard  bargains,  disadvantages,  loss  and  dam- 
age, occasioned  by  lack  of  foresight,  forgetfulness,  misfortune  and 
negligence.  Contracts  are  serious  things,  and  parties  capable  of 
contracting  must  be  held  by  the  courts  when  properly  called  upon, 


570  DISCHARGE    OF    CONTRACT. 

to  a  due  observance  of  their  contracts,  and  those  of  insurance  as 
well  as  others,  however  unfortunate,  disadvantageous,  or  disastrous 
the  results  following  from  them  may  be  to  one  side  or  the  other. 
All  lawful  contracts  must  be  binding  upon  those  who  make  them, 
and  as  they  make  them. 

Now  the  feme  plaintiff  expressly  agreed  with  the  defendant, 
that  the  policy  sued  upon  should  be  void,  if  there  should  "be  any 
other  insurance,  whether  valid  or  otherwise,  on  the  property  in- 
sured, or  any  part  thereof,  at  the  time  this  policy  is  issued,  or  at 
any  time  during  its  continuance,  without  the  consent  of  this  com- 
pany  (the  defendant)   endorsed  thereon." 

It  is  admitted  by  the  plaintiff  that  subsequently  to  the  execu- 
tion of  the  policy,  and  "during  its  continuance,  without  the  con- 
sent" of  the  defendant,  written  or  otherwise,  "other  insurance" 
was  taken  and  had  by  the  feme  plaintiff  upon  the  property  so  in- 
sured, for  very  considerable  sums  of  money,  of  which  the  defend- 
ant and  its  agents  had  no  notice — it  had  no  notice  of,  nor  did  it 
in  any  way  consent  to  the  same.  There  was,  therefore,  no  waiver 
of  its  rights  as  to  the  forfeiture  thus  wrought,  if  it  might  under 
other  circumstances  have  done  so.  The  mere  fact  that  the  plaintiff 
forgot  "the  existence  of  the  policy  sued  upon,  and  with  no  inten- 
tion to  defraud  the  defendant"  at  the  time  the  subsequent  insur- 
ance was  taken,  can  not  help  her.  The  defendant  was  in  no  way 
or  sense  to  blame  for  such  forget  fulness,  and  can  not  be  preju- 
diced by  it. 

It  appears  that  the  two  policies  of  "other  insurance,"  each  con- 
tained this  provision :  "Or  if  there  shall  be  any  other  insurance, 
whether  valid  or  otherwise,  on  the  property  insured,  or  any  part 
thereof,  at  the  time  this  policy  is  issued,  or  at  any  time  during  its 
continuance,  without  the  consent  of  this  company  endorsed  hereon, 
this  policy  shall  be  void." 

It  is  contended  for  the  plaintiff,  that  inasmuch  as  there  was 
other  existing  insurance  of  the  property  thus  insured,  at  the  time 
these  policies  were  executed,  they  were  ineffectual  and  void — never 
took  effect — and,  therefore,  the  policy  sued  upon  was  unaffected  by 
them,  and  remained  valid. 

This  argument  is  without  substantial  force.  The  clause  of  the 
policy  sued  upon  recited  above,  expressly  embraced  "any  other  in- 
surance, whether  valid  or  otherwise,"  and  provided  that  the  same 
should  render  the  policy  void. 

The  very  purpose  was  to  exclude  and  guard  against,  not  only 
subsequent  valid  insurance,  but  all  other,  supposed  or  intended  to 
be  valid.  Else  why  were  the  words,  "or  other  insurance,"  used? 
Are  these  significant  and  apt  words  to  be  treated  as  meaningless? 
Did  the  parties  intend  that  they  should  serve  no  purpose?     Surely 


BY    AGREEMENT.  571 

these  questions  can  not  be  answered  in  the  affirmative.  The  terms 
employed  are  explicit,  comprehensive  and  exclusive,  and  they  im- 
ply a  distinct,  obvious  purpose.  The  manifest  purpose  of  the  pro- 
visions in  question  was  to  prevent  possible  motive — the  creation  of 
it — of  the  insured  to  obtain  larger  insurance  of  the  property,  and 
then  burn  it,  with  a  view  to  get  the  money  agreed  to  be  paid  by 
each  and  all  the  insurers,  in  case  of  loss.  If  the  insured  believed 
the  subsequent  insurance  valid,  as  he  might  do,  whether  it  were 
so  or  not,  such  belief  would  raise  the  motive  intended  to  be 
guarded  against  as  certainly  as  if  it  had  been  valid.  To  guard 
against  such  possibilities  is  not  unreasonable  nor  unlawful;  when 
parties  choose  to  incorporate  into  their  contracts  provisions  against 
them,  it  is  the  plain  duty  of  the  court  to  give  them  effect. 

That  the  plaintiff  acted  in  good  faith  in  respect  to  the  subse- 
quent insurance,  and  the  defendant  suffered  no  injury,  can  not 
prevent  the  latter  from  having  the  full  benefit  of  the  forfeiture 
occasioned  by  the  violation  of  the  clause  in  question  of  the  policy, 
because  the  parties  so  agreed,  and  it  may  be  but  for  this  agree- 
ment, the  defendant  would  not  have  made  the  contract  of  insur- 
ance at  all.  It  may  be  that  as  matter  of  grace,  and  liberal,  fair 
dealing,  the  defendant  ought  to  share  in  the  loss  sustained  by  the 
feme  plaintiff ;  but  with  this  we  have  nothing  to  do. 

Judgment  affirmed. 

To  same  effect,  Sossamon  v.  Ins.  Co.,  78 — 145 ;  Biggs  v.  Ins.  Co.,  88 — 141 ; 
Alspaugh  v.  Ins.  Co.,  121 — 290;  Hayes  v.  Ins.  Co.,  132 — 702;  Geringer  v.  Ins. 
Co.,  133—407;  Weddington  v.  Ins.  Co.,  141—234;  Black  v.  Ins.  Co.,  148 — 
169 ;  Williams  v.  Casualty  Co.,  150—597;  Modlin  v.  Ins.  Co.,  151—35;  Sexton 
v.  Ins.  Co.,  157 — 142;  Watson  v.  Ins.  Co.,  159 — 638;  but  the  liability  continues 
if  the  insured  was  ignorant  of  the  violation.  Horton  v.  Ins.  Co.,  122 — 498; 
Alston  v.  Ins.  Co.,  80 — 326;  Coggins  v.  Ins.  Co.,  144 — 7  (iron  safe  clause). 

(231)    HUNTLEY  v.   McBRAYER. 

—  N.  C,  — ,  85  S.  E.,  213—1915. 

This  was  a  proceeding  for  partition  in  which  the  defendant 
pleaded  sole  seisin.  The  defendant  claimed  under  a  deed  from 
William  and  Jane  Henson,  which  contained  the  following  provi- 
sion :  "For  and  in  consideration  that  the  parties  of  the  first  part 
are  both  old  and  frail,  and  the  parties  of  the  second  part  agree 
and  bind  themselves  to  see  that  they  are  maintained  and  properly 
cared  for  as  long  as  they  or  either  of  them  live.  .  .  .  But  if 
the  parties  of  the  second  part  should  fail  to  comply  with  their 
part  of  the  agreement,  this  is  all  void  and  of  no  effect."  There 
was  no  proof  that  there  was  any  violation  of  the  agreement  to 
support  William  Henson  during  his  life,  but  the  plaintiffs  pro- 
posed to  prove  that  Jane  Henson  made  a  demand  which  was  not 
complied  with,  but  it  did  not  appear  when  this  demand  was  made 


572  DISCHARGE    UF    CONTRACT. 

nor  what  was  its  nature.     The  court  ruled  that  the  evidence  was 
not  sufficient,  and  the  plaintiff  took  a  nonsuit  and  appealed. 

Affirmed. 

Walker,  J.  We  are  of  the  opinion  that  the  words  of  the  deed 
create  a  condition  subsequent.  No  precise  words  are  required  to 
make  a  condition  precedent  or  subsequent.  The  construction  must 
always  be  founded  on  the  intention  of  the  parties.  If  the  act  or 
condition  required  does  not  necessarily  precede  the  vesting  of  the 
estate,  but  may  accompany  or  follow  it,  and  if  the  act  may  be  as 
well  done  after  as  before  the  vesting  of  the  estate,  or  if,  from  the 
nature  of  the  act  to  be  performed  and  the  time  required  for  its 
performance,  it  is  evidently  the  intention  of  the  parties  that  the 
estate  shall  vest,  and  the  grantee  perform  the  act,  after  taking 
possession,  then  the  condition  is  subsequent.  Underhill  v.  Saratoga 
&  Washington  R.  Co.,  20  Barb  (N.  Y.),  455.  The  effect  of  the 
deed,  therefore,  was  to  vest  the  fee  simple  of  the  estate  in  the 
grantees,  subject  to  be  defeated  by  a  neglect  or  refusal  to  perform 
the  condition.  It  is  true  that  such  conditions  are  construed  strictly 
against  the  grantor,  as  they  tend  to  defeat  estates,  but  the  con- 
struction should  be  conformable  to  the  letter  and  obvious  intent  of 
the  grant,  and,  if  there  is  only  one  which  will  give  effect  to  all  the 
words  of  the  instrument,  it  will,  of  course,  be  followed.  13  Cyc, 
687,  688.  The  meaning  of  this  deed  is  clear  that  the  grantees  shall 
see  to  the  maintenance  and  proper  care  of  the  grantors  during 
their  joint  and  several  lives,  and,  failing  to  do  so,  that  the  deed 
shall  be  "void  and  of  no  effect."  We  have  recently  discussed  the 
principles  applicable  to  conditions  of  this  sort  in  deeds,  and  it 
would  be  useless  to  repeat  what  is  there  said.  Britton  v.  Taylor, 
84  S.  E.,  280. 

The  only  question  we  need  consider  here  is  whether  there  was 
a  sufficient  offer  to  prove  facts  that  would  show  a .  violation  of 
the  condition.  It  is  stated  in  the  facts  admitted  that  a  demand 
was  made  by  Jane  Henson  upon  the  grantees,  but  we  are  not  in- 
formed as  to  its  terms,  so  that  we  can  not  see  that  it  was  of  a 
kind  to  put  the  grantees  in  default  if  they  did  not  comply  with  it. 
Tin's  would  be  very  indefinite  proof,  and  a  wholly  inadequate  ad- 
mission, upon  which  to  declare  a  vested  estate  forfeited  for  breach 
of  a  condition.  It  must  appear  clearly  that  there  has  been  a  sub- 
stantial failure  to  perform  the  covenant  for  support  before  the 
power  of  the  court  will  be  exerted  to  put  an  end  to  the  estate  con- 
veyed and  return  it  to  the  grantor. 

Ecroyd  v.  Coggeshall,  21  R.  I.,  1.  41  Atl.,  260.  79  A.  S.  R.,  741 ;  1  L. 
R.  A.,  380.  and  note;  5  L.  R.  A..  422.  and  note:  Hauler  Falls  Creamerv  v. 
Milton  Dairy  Co.,  126  Minn..  226.  148  \.  W..  46.  52  L.  R.  A.  (N.  S.).  718: 
6  R.  C.  T...  906.     Whether  a  provision  in  the  deed  that  the  grantor  shall  sup- 


BY    AGREEMENT.  573 

port  the  grantee  is  a  condition  precedent,  a  condition  subsequent,  or  a  charge 
upon  the  land,  see  Helms  v.  Helms,  135 — lo4 ;  137 — 206;  Whitaker  v.  Jenkins, 
138 — 176;  Cuthbertson  v.  Morgan,  149—72. 

(232)  AUSTIN  v.  MILLER, 

74  X.  C,  274—1876. 

Civil  action  on  contract.  The  defendant  wanted  to  hire  a  horse 
from  the  plaintiff  to  drive  from  Lenoir  to  Boone,  hut  the  plaintiff 
was  unwilling  for  him  to  take  the  horse  without  a  driver.  The 
defendant  said,  "Price  your  mare,  and  if  I  do  not  bring  her  back 
to-morrow  night  as  good  as  she  is  I  will  pay  you  your  price  for 
the  mare."  Plaintiff  said,  "I  will  take  $250  for  the  mare,  and  if 
she  is  not  hurt  I  will  take  her  back ;  if  she  is,  you  must  pay  me 
for  her,  and  I  shall  expect  you  to  do  it."  The  mare  was  returned 
five  days  later,  damaged  to  the  amount  of  $100,  and  defendant 
has  not  paid  the  price.  The  plaintiff  asked  for  judgment  for  $250, 
and  offered  to  credit  $150  for  which  he  sold  the  mare.  Judgment 
for  defendant,  and  plaintiff  appealed. 

Reade,  J.  It  is  not  controverted  that  if  the  defendant  had  not 
returned  the  mare  at  all,  he  would  have  been  liable  for  the  price 
agreed  on,  $250.  And  the  same  is  true  if  he  had  offered  to  return 
her  injured,  and  the  plaintiff  had  refused  to  receive  her.  So  the 
question  is,  whether  the  fact  that  he  did,  after  the  time  agreed  on, 
return  the  mare  in  a  damaged  condition,  when  she  was  received 
by  the  plaintiff  and  sold,  make  any  difference?  Can  we  say,  as  a 
matter  of  law,  that  the  taking  of  the  mare  back  was  a  rescission 
of  the  contract,  or  a  waiver  of  the  plaintiff's  right  to  recover  for 
a  breach  of  contract?  It  is  evident,  as  a  matter  of  fact,  that  the 
plaintiff  did  not  intend  it  as  a  rescission  or  waiver,  for  he  had 
already  instituted  his  suit  for  damages,  and  continued  to  prosecute 
it.  The  reasonable  implication  is,  that  when  the  plaintiff  received 
the  mare  back,  he  had  no  purpose  to  release  the  defendant,  but 
fearing  that  if  he  refused  to  take  her,  he  might  lose  the  mare  and 
the  price  too,  he  determined  to  take  her  as  a  security  for  the  claim 
which  he  had  against  the  defendant,  and  to  do  the  best  he  could 
with  her.  If  this  was  not  so,  then  it  would  have  been  easy  for  the 
defendant  to  submit  an  issue  to  the  jury  embracing  the  inquiry  as 
to  the  intent  of  the  plaintiff.     This  he  chose  not  to  do. 

If  A  agrees  to  deliver  to  B  an  article  of  a  certain  quality  for 
which  B  is  to  pay  a  certain  price,  and  an  article  of  an  inferior 
quality  is  offered,  B  may  refuse  to  receive  it.  And,  generally, 
this  is  the  better  way.  the  contract  being  executory.  But  if  B  has 
paid  for  the  article,  and  by  rejecting  it  he  may  lose  the  money  and 
the  article  both,  then  the  better  way  is  for  him  to  receive  the  ar- 
ticle and  make  the  most  of  it,  and  sue  A  for  a  breach  of  contract. 


574  DISCHARGE    OF    CONTRACT. 

That  is  substantially  what  the  plaintiff  did  in  this  case.  It  is 
like  the  shingle  case,  Cox  v.  Long,  69  N.  C.  Rep.,  8.  There  Long 
had  agreed  to  furnish  Cox  shingles  of  a  certain  quality,  at  a  cer- 
tain price,  and  Cox  had  paid  for  them.  Shingles  of  an  inferior 
quality  were  delivered,  and  Cox,  under  the  stress  of  circumstances, 
and  to  keep  his  house  from  injury,  received  and  used  them,  and 
sued  Long  for  a  breach  of  his  contract,  and  recovered.  So  here, 
the  defendant  promised  to  deliver  the  mare  in  a  certain  condition; 
he  delivered  her  in  an  inferior  condition.  The  plaintiff,  under 
stress  of  circumstances,  to  keep  from  losing  his  mare,  took  her 
and  used  her,  and  sued  for  breach  of  the  contract.  Spears  v. 
Halstead,  at  this  term. 

There  is  error.  Judgment  reversed,  and  judgment  here  for 
plaintiff  upon  the  finding  of  the  jury,  upon  the  basis  of  $250  for 
the  breach  of  the  contract,  less  $150,  which  plaintiff  waived  on 
sale  of  the  mare,  with  interest  from  time  of  the  verdict. 

Per  Curiam.  Judgment  accordingly. 

See  also  Hargrave  v.  Smith,  62 — 165;  Ray  v.  Thompson,  12  Cush.  (Mass.), 
281  :  9  Cyc.  600. 

Excepted  risks. — In  contracts  of  common  carriers,  act  of  God  or  the 
public  enemies,  or  inevitable  accident  will  operate  to  discharge  from  liability, 
where  there  is  no  negligence.  Backhouse  v.  Sneed,  5 — 173 ;  Harrell  v.  Owens, 
18—273;  Boner^v.  Steamboat  Co.,  46—211;  53  L.  R.  A.,  673;  1  Am.  &  Eng. 
Encyc,  272,  588 ;  5  Ibid.,  234 ;  negligence  must  be  the  proximate  cause,  Ibid., 
258,  giving  two  views;  6  Cyc,  377:  Clark  Cont.,  428;  11  L.  R.  A.,  615.  For 
impossibility  of  performance  in   other  contracts,   see  that  subject,  post. 

Discharge  optional. — By  the  terms  of  the  agreement  either  party  may 
have  the  right  to  terminate  the  contract  upon  notice.  Where  no  time  of 
employment  is  fixed  between  broker  and  principal,  either  party  may  terminate 
it  at  will,  acting  in  good  faith.  Abbott  v.  Hunt,  129—403.  Landlord  and 
tenant  regulated  by  statute,  unless  otherwise  fixed  by  the  terms  of  agreement. 
Revisal,  1984;  Harty  v.  Harris,  120 — 408.  Contract  terminated  on  thirty 
days'  written  notice,  Patrick  v.  R.  R.,  93—422.  Contract  of  hiring  by  the 
year,  with  right  of  either  party  dissatisfied  to  stop.  Booth  v.  Ratcliffe,  107 — 
6;  Trust  Co.  v.  Adams,  145—161.  See  3  Page  Cont.,  sees.  1360,  1361 ;  Clark 
Cont.,  429.  In  a  contract  for  personal  service,  when  no  time  is  fixed  and  no 
stipulation  as  to  payment  is  made,  it  is  presumed  in  England  to  be  for  a  year; 
but  in  this  country  it  may  be  terminated  at  the  will  of  either  party.  Solo- 
mon v.  Sewerage  Co.,  142 — 445;  Currier  v.  Lumber  Co.,  150 — 694;  Wagon 
Co.  v.  Riggan,  151—303;  20  Am.  &  Eng.  Encyc,  14. 


BY    PERFORMANCE.  575 


CHAPTER  II. 
Discharge  by  Performance. 
Sec.    1.  Substantial  performance. 

(233)   RILEY  v.  CARPENTER, 

143  X.  C,  215,  55  S.  E.,  628—1906. 

Civil  action  by  plaintiff  on  contract  for  sale  of  yarn.  Defend- 
ant admitted  the  amount  claimed  by  plaintiff,  but  set  up  a  counter- 
claim for  damages  for  breach  of  the  contract  by  plaintiff  in  failing 
to  deliver  the  remainder  of  the  yarn  contracted  for.  Judgment 
for  plaintiff,  and  defendant  appealed. 

Brown,  J.  The  court  charged  that  "If  the  plaintiff  shipped 
the  goods  with  bill  of  lading  attached,  and  defendant  could  have 
gotten  the  goods  by  calling  at  the  depot  and  paying  for  the  yarn, 
that  would  be  substantial  compliance  with  the  contract,  and  if  you 
find  from  the  evidence  that  this  is  true,  you  will  answer  the  sec- 
ond issue  'No.'  " 

In  this  we  think  there  was  error.  The  contract  that  bills  of 
lading  were  to  be  sent  direct  to  the  defendant,  and  upon  receipt 
of  the  goods  he  was  to  remit  to  the  plaintiffs,  was  not  performed 
when  the  plaintiffs  billed  the  goods  to  themselves  with  draft  at- 
tached. It  was  not  a  substantial  compliance  with  the  contract,  but 
a  wilful  violation  of  it.  The  defendant  had  the  right  to  insist 
upon  such  a  contract,  and  the  plaintiffs  need  not  have  agreed  to 
it,  but  having  agreed  to  it,  they  should  have  performed  it.  If  the 
defendant's  credit  had  become  impaired  and  his  solvency  seriously 
doubted,  the  plaintiffs  could  have  refused  to  ship  the  goods,  and 
should  then  have  notified  the  defendant  of  the  reason.  There  is 
nothing  of  that  sort  in  the  case.  The  defendant  may  have  thought, 
and  with  some  reason,  that  if  all  his  goods  were  shipped  C.  O.  D. 
it  would  impugn  his  credit,  and  for  that  reason  insisted  as  a  part 
of  the  contract  upon  direct  shipments.  One  who  invokes  the  doc- 
trine of  substantial  performance  in  order  to  show  a  right  to  re- 
cover on  a  contract,  must  present  a  case  in  which  there  has  been 
no  wilful  omission  or  departure  from  the  terms  of  the  contract ; 
he  must  have  faithfully  and  honestly  endeavored  to  perform  it  in 
all  particulars.  To  justify  a  recovery  on  a  contract  as  substan- 
tially performed,  the  omission  must  be  the  result  of  a  mistake  or 


576  DISCHARGE    OF    CONTRACT. 

inadvertence  and  not  intentional.     Elliott  v.  Caldwell,  9  L.  R.  A., 
53,  and  cases  cited. 

If  the  evidence  of  the  defendant  is  to  be  believed,  the  departure 
from  the  alleged  contract  was  intentional.  He  says :  "I  told  them 
when  we  talked  of  the  modification  of  this  contract,  and  as  a  part 
of  the  modification  and  understanding,  it  was  agreed  that  no  goods 
were  to  be  shipped  to  me  with  bill  of  lading  attached.  I  expressly 
told  Corbett  that  I  never  received  or  had  goods  shipped  to  me  with 
bill  of  lading  attached,  and  I  would  not  receive  any  goods  that 
way,  and  they  were  not  to  be  shipped  to  me  under  the  modified 
terms  in  any  such  manner,  but  bills  of  lading  and  invoices  were  to 
be  sent  direct  to  me,  and  upon  receipt  of  the  goods  I  was  to  remit 
to  Riley  &  Co.,  Boston,  Mass."  As  the  terms  of  the  modified 
contract  do  not  seem  to  be  in  dispute,  we  are  of  the  opinion  that 
the  plaintiffs  violated  it  when  they  shipped  the  goods  C.  O.  D., 
and  that  the  defendant  was  justified  in  not  receiving  them,  and 
that  the  defendant  is  entitled  to  recover,  as  damages,  the  difference 
between  the  contract  price  and  what  it  reasonably  cost  the  de- 
fendant on  the  market  to  supply  the  yarns  which  plaintiffs  failed 
to  supply. 

Let  there  be  a  new  trial  upon  the  second  and  third  issues. 

New   trial. 

Substantial  performance,  one  which  is  bona  fide,  gives  to  the  obligee  all 
that  by  the  intent  of  the  contract  he  was  to  receive.  Calloway  v.  Hamby, 
65 — 631;  Brown  v.  Morris,  83 — 251:  in  equity.  Shaw  v.  Vincent.  64—690; 
Bispham's  Eq.,  sec.  389.  Question  of  fact  for  the  jury,  Russell  v.  Comrs., 
123 — 264.  Where  there  was  an  agreement  by  the  client  to  pay  the  attorney 
$100,  to  get  him  out  of  six  suits,  and  the  attorney  was  successful  in  all  hut 
one,  which  went  to. the  Supreme  Court,  where  a  new  trial  was  granted,  and 
afterwards  a  nol.  pros,  was  entered ;  this  was  substantial  compliance,  though 
the  attorney  did  not  go  to  the  Supreme  Court.  Candler  v.  Trammell,  29 — 
126;  9  Cvc,  686.  See  3  Page  Cont,  sees.  1385-1389:  Clark  Cont,  431:  5  L. 
R.  A..  270:  9  L.  R.  A..  52;  Corinthian  Lodge  v.  Smith,  147—244;  Meincke 
v.  Falk.  61  Wis..  623,  50  A.  R.,  157;  Foeller  v.  Heintz,  137  Wis..  169.  118  N. 
W..  543,  24  L.  R.  A.  (N.  S.),  327:  6  R.  C.  L.,  966. 

Sec.   2.  Performance  to  the  satisfaction  of  another. 

(234)  YOUNG  v.  JEFFREYS, 

20  N.  C,  357—1839. 

Vtion  of  assumpsit  on  special  count,  and  for  work  and  labor 
done.  The  plaintiff,  as  the  lowest  bidder,  made  a  contract  with 
the  defendants  as  commissioners  for  the  congregation,  to  build  a 
church  according  to  certain  specifications,  to  be  paid  for  "if"  or 
"when"  the  work  was  done  according  to  specifications  and  ac- 
cepted by  the  commissioners.  When  the  plaintiff  finished  the  work, 
the  commissioners  refused  to  accept  it  because  they  said  it  was  not 


BY     PERFORMANCE.  577 

done  according  to  specifications,  pointing  out  four  particular  ob- 
jections. The  plaintiff  claimed  that  the  first  two  were  on  account 
of  changes  consented  to  by  the  defendants,  and  that  the  others 
were  frivolous  and  unfounded.  His  Honor  instructed  the  jury 
that  if  they  should  find  that  the  plaintiff  completed  the  work  ac- 
cording to  specifications  except  the  changes  consented  to,  and  that 
the  other  objections  were  frivolous,  the  plaintiff  was  entitled  to 
recover.  There  was  a  verdict  and  judgment  for  plaintiff,  and  de- 
fendant appealed. 

Gaston,  J.  I  am  instructed  to  declare  the  opinion  of  this  court 
that  the  judgment  rendered  below  is  erroneous;  that  on  the  mat- 
ter reserved  the  law  is  for  the  defendants ;  and  that  under  the 
agreement  of  the  parties  the  verdict  is  to  be  set  aside,  and  there 
is  to  be  judgment  of  nonsuit. 

The  court  assents  to  the  propriety  of  that  part  of  His  Honor's 
opinion  wrhich  holds  that  the  jury  might  consider  the  special  con- 
tract made  between  the  plaintiff  and  these  defendants  at  the  time 
of  bidding,  modified  in  the  particulars  and  to  the  extent  which  had 
been  subsequently  agreed  upon  between  them  and  the  plaintiff. 
If,  therefore,  the  commissioners  had  rejected  the  building  because 
of  those  changes,  and  these  only — and  had  approved  of  it  as  con- 
forming to  the  specifications  in  all  other  respects,  the  defendants 
would  have  been  liable  to  the  plaintiff  upon  their  agreement.  But 
the  court  holds  that,  inasmuch  as  the  commissioners  rejected  the 
building  because  in  their  judgment  it  did  not  conform  to  the  other 
specifications,  then,  however,  unfounded  and  frivolous  these  objec- 
tions of  the  commissioners  might  be  deemed  by  the  jury,  the  de- 
fendants were  not  liable  to  the  plaintiff  upon  the  agreement  given 
in  evidence,  and  which,  according  to  the  practice  that  obtains  with 
the  profession  where  a  formal  declaration  has  not  been  previously 
drawn  out  at  length,  must  be  understood  as  the  agreement  con- 
tained in  the  declaration.  This  opinion  is  founded  upon  the  prin- 
ciple that  the  defendants  are  bound  so  far  and  so  far  only  as  they 
consented  to  be  bound.  Now,  all  the  evidence  of  their  agreement 
made  the  "acceptance"  of  these  commissioners  one  of  the  condi- 
tions of  their  engagement.  It  is  immaterial  which  set  of  words 
testified  to  by  the  witnesses  was  used — whether  to  pay  if  the  com- 
missioners accepted,  or  when  the  commissioners  accepted;  for 
unless  these  words  do  not  mean  what  they  obviously  import,  the 
addition  of  them  manifests  that  the  commissioners  were  to  pass 
upon  the  question  whether  the  work  was  completed  according  to 
the  specifications.  And  the  opinion  is  deemed  by  us  erroneous, 
because  in  effect  it  strikes  out  of  the  agreement  one  of  the  essen- 
tial terms — and  holds  the  defendants  bound  to  pay  without  or  be- 


578  DISCHARGE    OF    CONTRACT. 

fore  such  acceptance,  when  they  have  consented  to  pay  only  if  or 
when  the  acceptance  shall  take  place. 

There  is  nothing  unreasonable,  much  less  illegal,  in  such  a  con- 
dition. Whether  a  work  of  art  has  been  done  with  proper  mate- 
rials and  in  a  workmanlike  style  is  an  inquiry  on  which  honest 
differences  of  opinion  may  prevail  even  among  persons  skilled  in 
the  art,  and  on  which  men  of  ordinary  pursuit  are  very  unfit  to 
pass.  It  is,  therefore,  in  agreements  for  works  of  this  kind,  a  pru- 
dent and  common  stipulation  for  the  prevention  of  controversies, 
that  the  construction  of  the  work  shall  be  determined  by  some  per- 
son in  whose  judgment  the  parties  have  confidence.  If,  however, 
the  judgment  of  the  forum  appointed  by  the  parties  is  to  be  disre- 
garded, or  revised  by  a  court  and  jury,  the  stipulation  is  unmean- 
ing. There  can  be  no  question  but  that  the  view  entertained  by 
this  court  would  prevail,  if  the  agreement  between  these  parties 
had  been  in  writing,  and  contained  a  stipulation  in  the  words  used 
by  any  of  the  witnesses  who  testified  as  to  the  agreement.  Morgan 
v.  Birnie,  9  Bing.  Rep.,  672;  23  Eng.  Com.  Law  Rep.,  414;  De 
Vile  v.  Arnold,  10  Price,  21  ;  4  Exch.  Rep.,  266.  It  is  supposed, 
however,  that  inasmuch  as  the  contract  was  by  parol,  the  construc- 
tion of  the  contract  was  a  matter  wholly  for  the  consideration  of 
the  jury.  If  by  construction  be  meant  the  ascertainment  of  the 
agreement  of  the  parties,  the  proposition  is  admitted;  but  if  there- 
by be  meant  the  ascertainment  of  the  effect  of  the  agreement,  then, 
we  apprehend,  the  proposition  is  erroneous.  The  effect  of  a  con- 
tract is  a  question  of  law.  Where  a  contract  is  wholly  in  writing, 
and  the  intention  of  the  framers  is,  by  law,  to  be  collected  from 
the  document  itself,  there  the  entire  construction  of  the  contract — 
that  is,  the  ascertainment  of  the  intention  of  the  parties  as  well  as 
the  effect  of  that  intention,  is  a  pure  question  of  law,  and  the  whole 
office  of  the  jury  is  to  pass  on  the  existence  of  the  alleged  written 
agreement.  Where  the  contract  is  by  parol  the  terms  of  the  agree- 
ment are,  of  course,  a  matter  of  fact,  and  if  those  terms  be  ob- 
scure or  equivocal,  or  susceptible  of  explanation  from  extrinsic 
evidence,  it  is  for  the  jury  to  find  also  the  meaning  of  the  terms 
employed  ;  but  the  effect  of  a  parol  agreement,  when  its  terms  are 
given  and  their  meaning  fixed,  is  as  much  a  question  of  law  as  the 
construction  of  a  written  instrument. 

The  propriety  of  the  nonsuit  depends  on  the  effect  of  the  terms 
of  the  agreement  as  offered  in  evidence.  There  is  nothing  in  the 
terms  employed  ambiguous  or  equivocal,  and  if  there  were  there 
is  no  suggestion  that  the  ordinary  meaning  was  not  the  meaning 
of  the  parties.  The  judge,  therefore,  had  a  right  to  declare  the 
legal  effect  of  an  agreement  in  those  terms,  and  the  verdict  being, 


by  performance;.  579 

by  the  assent  of  the  parties,  taken  subject  to  his  judgment  thereon, 
the  matter  thus  referred  to  him  was  a  pure  question  of  law. 

The  plaintiff,  under  the  circumstances  of  the  case,  was  not,  in 
our  opinion,  entitled  to  recover  upon  the  common  count  for  work 
and  labor  done.  The  liability  of  the  defendants  was  founded  solely 
upon  their  special  agreement.  The  change,  by  mutual  assent  in 
respect  to  some  of  the  specifications  of  the  work  to  be  done  under 
that  agreement,  left  the  agreement  in  full  force  as  to  all  its  other 
parts. 

Whether  the  plaintiff  might  not  obtain  compensation  in  some 
forum,  in  case  the  acceptance  by  the  commissioners  was  rendered 
impossible  by  accident,  or  may  not  be  entitled  to  redress  in  some 
form,  if  that  acceptance  has  been  withheld  maliciously,  or  by 
fraudulent  combination,  we  are  not  called  upon  to  determine.  It 
is  enough  for  us  to  say  that  upon  the  agreement  alleged,  the  de- 
fendants are  not  liable,  because  by  that  agreement  their  liability 
was  made  to  depend  on  the  judgment  of  the  commissioners  that 
the  work  had  been  done  according  to  the  specifications. 

Judgment  reversed. 

(235)  ZALESKI  v.  CLARK, 

44  Conn.,  218.  26  A.  R.,  446—1876. 

This  was  an  action  to  recover  the  price  of  a  bust,  which  the 
defendant  refused  to  accept  and  pay  for. 

Carpenter,  J.  Courts  of  law  must  allow  parties  to  make  their 
own  contracts,  and  can  enforce  only  such  as  they  actually  make. 
Whether  the  contract  is  wise  or  unwise,  reasonable  or  unreason- 
able, is  ordinarily  an  immaterial  inquiry.  The  simple  inquiry  is, 
what  is  the  contract?  and  has  the  plaintiff  performed  his  part  of 
it  ?  In  this  case  the  plaintiff  undertook  to  make  a  bust  which 
should  be  satisfactory  to  the  defendant.  The  case  shows  that  she 
was  not  satisfied  with  it.  The  plaintiff  has  not  yet  then  fulfilled 
his  contract.  It  is  not  enough  to  say  that  she  ought  to  be  satisfied 
with  it,  and  that  her  dissatisfaction  is  unreasonable.  She,  and  not 
the  court,  is  entitled  to  judge  of  that.  The  contract  was  not  to 
make  one  that  she  ought  to  be  satisfied  with,  but  to  make  one  that 
she  would  be  satisfied  with.  Nor  is  it  sufficient  to  say  that  the 
bust  was  the  very  best  thing  of  the  kind  that  could  possibly  be 
produced.  Such  an  article  might  not  be  satisfactory  to  the  de- 
fendant, while  one  of  inferior  workmanship  might  be  entirely  sat- 
isfactory. A  contract  to  produce  a  bust  perfect  in  every  respect, 
and  one  with  which  the  defendant  ought  to  be  satisfied,  is  one 
thing;  and  undertaking  to  make  one  with  which  she  will  be  satis- 
fied is  quite  another  thing.     The   former  can  only  be  determined 


580  DISCHARGE    OF    CONTRACT. 

by  experts,  or  those  whose  education  and  habits  of  life  qualify 
them  to  judge  of  such  matters.  The  latter  can  only  be  determined 
by  the  defendant  herself.  It  may  have  been  unwise  in  the  plain- 
tiff to  make  such  a  contract,  but  having  made  it,  he  is  bound  by 
it.  McCarren  v.  McNulty,  7  Gray,  139;  Brown  v.  Foster,  113 
Mass.,  136.  New  trial  advised. 

For  performance  subject  to  the  approval  of  a  third  person,  see  Burgin  v. 
Smith,  151—561;  Church  v.  Shanklin,  95  Cal.,  626,  30  Pac,  789,  17  L.  R.  A., 
210;  Webb  v.  Trustees,  143—299;  Mercantile  Trust  Co.  v.  Hensey,  205  U.  S., 
298,  10  Ann.  Cas.,  572 ;  6  R.  C.  L.,  956.  In  contracts  to  be  performed  to  the 
satisfaction  of  the  promisee,  the  distinction  is  sometimes  made  that  if  it  is 
a  question  of  personal  taste,  actual  satisfaction  is  required,  while  in  a  ques- 
tion of  utility  alone  reasonable  satisfaction  is  sufficient.  Hollingsworth  v. 
Colthurst,  78  Kan.,  455,  96  Pac,  851.  130  A.  S.  R.,  382,  18  L.  R.  A.  (N.  S.), 
741 ;  Gerisch  v.  Herold,  82  N.  J.  L.,  605,  83  Atl.,  892,  Ann.  Cas.,  1913  D,  627 ; 
6  R.  L.  C,  953.  Bonds  to  be  issued  "to  the  satisfaction  of  our  attorney,"  his 
approval  is  necessary.  Webb  v.  Trustees,  143 — 299.  An  agreement  by  which 
a  bastard  child  was  to  stay  with  the  mother  to  be  cared  for  until  the  father 
"became  dissatisfied  with  the  manner  of  its  education  and  treatment,"  means 
dissatisfied  for  reasonable  cause.  Frolick  v.  Schonwald,  52 — 427.  See  also 
Haskins  v.  Royster,  70 — 601 ;  Johnson  v.  Dunn,  51 — 122 ;  Lane  v.  Ins.  Co., 
142—55;  24  Am.  &  Eng.  Encyc,  1236;  3  Page  Cont.,  1390;  Clark  Cont,  432; 
1  L.  R.  A.,  645 ;  9  Cyc,  618.  Unless  the  contract  requires  some  personal 
skill,  the  promisor  may  have  the  work  done  by  a  third  person ;  as  when  A 
agreed  to  build  a  boat  for  B  at  a  certain  price,  and  got  C  to  do  the  work  for 
less  money,  B  was  compelled  to  oay  the  agreed  price.  Meadows  v.  Smith, 
44—327. 

Sec.  3.  Payment. 
1.    What  constitutes  a  payment. 

(236)  RHODES  v.  CHESSON, 

44  N.  C,  336—1853. 

Action  of  debt.  Plaintiff  introduced  a  bond  of  defendant  and 
proved  its  execution.  Defendant  pleaded  payment  and  introduced 
a  witness,  who  testified  that  after  the  bond  became  due,  and  before 
suit,  the  plaintiff  stated  to  him  that  he  had  borrowed  notes  of  the 
defendant,  that  he  was  to  pay  him  again  in  notes,  and  that  the 
bond  now  in  suit  was  to  be  one  of  them.  At  the  time  the  notes 
were  borrowed,  no  writing  was  given,  and  the  bond  in  suit  was 
then  due.  The  court  held  that  this  amounted  to  a  payment,  and 
the  plaintiff  submitted  to  nonsuit  and  appealed. 

Pearson,  J.  The  only  question  is  the  construction  of  the  con- 
tract, and  we  are  to  take  the  terms  as  stated  by  the  witness.  His 
Honor  was  of  opinion  that  the  legal  effect  was  a  payment  of  the 
bond  sued  on.     We  have  come  to  a  different  conclusion. 

At  common  law  a  bond  could  not  be  discharged  except  by  an 
instrument  under  seal,  co  ligamine  quo  ligatur.  The  statute  of 
Anne  allows  the  plea  of  "payment."     Payment  may  be  made  either 


BY    PERFORMANCE.  581 

in  money,  or  in  money's  worth;  but  to  amount  to  a  payment,  the 
thing  must  be  done,  the  money  must  be  paid,  or  the  thing  taken  as 
money  must  be  passed  so  as  presently  to  become  the  property  of 
the  other  party.  A  promise  or  undertaking  to  pay  either  in  money 
or  other  thing,  is  not  a  payment;  the  contract  is  executory, 
whereas  payment  is  executed,  a  thing  done. 

When  the  plaintiff  borrowed  of  the  defendant  the  $200  worth  of 
notes,  the  contract  was,  that  he  was  to  return  the  amount  so  bor- 
rowed in  notes,  and  the   "bond  now   sued  on  was  to  be  one  of 
them."     It  is  not  stated  what  credit  was  given,  whether  a  month, 
six  months,  or  a  year;  but  as  a  matter  of  course  there  was  some 
credit.     This   is   a   necessary   implication    from   the   nature   of   the 
transaction ;  for  why  borrow  notes,  if  the  plaintiff  had  at  this  time 
other  notes,  and  was  then  and  there  ready  to  repay  in  such  notes? 
Say  the  credit  was  five  days,  the  contract  is  executory,  and  the 
effect  of   it   is,   that   the   defendant   relied  on  the   promise   of   the 
plaintiff  to  repay  at  a  future  day  in  other  notes,  of  which  the  bond 
now  sued  on  was  to  be  one.     No  difference  is  made  between  the 
bonds  and  other  notes.     If  the  understanding  was  that  the  bond 
was  to  be  handed  over  presently  as  part  payment,  why  is  it  left  on 
the  same  footing  with  the  other  notes  in  which  the  repayment  was 
to  be  made?     The  bond  was  then   due,   why  was   it  not   handed 
over  at  the  time?  or,  if  the  plaintiff  did  not  have  it  with  him,  why 
was  it  not  understood  that  it  should  be  considered  as  then  paid 
over,   and   be   handed   to   the   defendant   as   soon   as   convenient? 
According  to  the  terms  of  the  agreement,  the  bond  was  put  on 
the  same  footing  with  the  other  notes,  and  there  is  no  more  reason 
for  saying  the  contract  was   executed  in   regard  to   it,   so  as  to 
amount  to  a  payment,  than  there  is  for  saying  the  same  in  regard 
to  the  other  notes. 

If  there  had  been  any  doubt  as  to  the  terms  of  the  agreement, 
it  would  have  been  proper  to  leave  the  question  to  the  jury,  with 
the  necessary  instructions ;  but  the  evidence  as  set  forth  in  the 
record  left  no  question  of  fact  open;  and  we  agree  with  His 
Honor  that  it  was  his  duty  to  put  a  construction  on  the  agreement, 
the  terms  being  fixed  by  the  evidence.  Questions  of  construction 
are  to  be  decided  by  the  court ;  and  it  makes  no  difference  whether 
the  agreement  is  written  or  verbal.  Festerman  v.  Parker,  32  N. 
C,  474;  Young  v.  Jeffreys,  20  N.  C,  357. 

Per  Curiam.  Nonsuit  set  aside,  venire  de  novo  awarded. 


582  discharge;  of  contract. 


(237)   MOORE  v.  THOMPSON, 

44  N.  C,  221—1853. 

Pearson,  J.  .  .  .  The  creditor,  without  the  knowledge  or 
consent  of  the  debtor,  enters  a  credit  on  the  note  for  the  purpose 
of  giving  jurisdiction ;  the  debtor  has  never  assented  to,  or  ratified 
this  credit,  but  has  always  objected  to  it.  This  does  not  amount 
to  a  payment,  and  the  magistrate  had  consequently  no  jurisdiction. 
It  is  a  familiar  maxim  of  law,  "No  one  can  make  another  his 
debtor  without  his  consent."  The  converse  is  equally  true.  No 
one  can  give  another  a  specific  article  or  a  sum  of  money,  unless 
he  chooses  to  accept  it ;  and  although  in  this  latter  case  the  ac- 
ceptance is  usually  presumed  (as  it  is  supposed  to  be  for  his  ben- 
efit), yet  there  may  be  reasons  why  he  may  not  choose  to  accept 
it  (as  in  our  case),  and  then  the  presumption  is  rebutted.  Suppose 
a  creditor  whose  debt  is  about  being  barred  by  the  statute  of  lim- 
itations or  the  presumption  of  payment  enters  a  credit,  no  effect 
whatever  is  given  to  it  unless  the  debtor  assents  to  it.  It  is  said 
this  is  like  the  case  of  a  plaintiff  who  remits  a  part  of  his  dam- 
ages to  prevent  a  variance.  There  is  no  analogy ;  for  then  the 
court  allows  the  remittitur  as  an  amendment  of  the  record.  State 
v.  Mangum,  28  N.  C,  369;  Fortescue  v.  Spencer,  24  N.  C,  63, 
both  assume  that  the  case  now  under  consideration  would  be  a 
fraud  upon  the  jurisdiction. 

Payment  must  be  made  to  the  creditor  or  his  authorized  agent.  Pool  v. 
Allen,  29—120;  Shaw  v.  Williams,  100—272.  Payment  must  be  made  in 
money  unless  otherwise  agreed ;  the  premium  on  an  insurance  policy  must 
be  paid  in  money,  a  payment  in  clothing  to  the  agent  is  not  valid.  Folb  v. 
Ins.  Co.,  133—179.  Payment  in  Confederate  money,  tendered  and  accepted 
by  the  creditor  in  1862,  was  a  discharge,  if  the  parties  were  dealing  on  equal 
terms.  Hall  v.  Craige,  65—51;  Mercer  v.  Wiggins,  74—48:  see  also  22  Am. 
&  Eng.  Encyc,  545-547,  where  numerous  cases  are  cited.  Payment  by  check, 
which  is  accepted  and  retained,  is  valid.  Sellars  v.  Johnson,  65 — 104;  and 
the  creditor  must  take  it  as  offered.  Kerr  v.  Sanders,  122 — 635 :  Cline  v. 
Rudisill,  126—523;  Wittkowsky  v.  Baruch,  127—313;  Ore  Co.  v.  Powers, 
130 — 152.  Payment  by  a  third  person  is  a  discharge  if  accepted  as  such. 
•  '.riffin  v.  Petty,  101 — 380;  but  whether  the  payment  by  a  third  person  is  a  dis- 
charge of  the  debt  as  against  the  debtor,  or  a  purchase  for  the  benefit  of  the 
payer,  is  a  question  of  fact  for  the  jury.  Runyon  v.  Clark,  49 — 52;  if  pay- 
ment is  made  by  one  of  the  parties,  it  is  a  discharge  unless  the  debt  is  trans- 
ferred to  a  third  person.  Sherwood  v.  Collier,  14—380;  Tiddy  v.  Harris, 
101—589.  Where  the  obligation  is  payable  in  specific  articles,  the  obligor  has 
the  option  to  furnish  the  articles  or  pay  the  money,  unless  it  appear  that  the 
property  only  was  intended,  but  this  option  is  lost  by  failure  to  make  delivery 
or  tender  on  the  day  specified,  and  it  then  becomes  a  debt  pavable  in  money. 
Hamilton  v.  Eller,  33—276;  22  Am.  &  Eng.  Encyc,  542.  To  make  specific 
articles  payment,  they  must  be  received  as  payment,  or  by  subsequent  agree- 
ment applied  as  pavment.  Locke  v.  Andres,  29—159:  White  v.  Beaman, 
96—122:  Young  v.  Alford,  113—130,  118—215.  Counterfeit  money  is  no 
payment.  Lowe  v.  Weatherley,  20 — 212;  Hargrave  v.  Dusenbury,  9 — 326; 
Anderson  v.  Hawkins,  10 — 568.     The  debtor  must  seek  the  creditor,  if  he  is 


BY    PERFORMANCE.  583 

in  the  State,  unless  a  fixed  place  is  given ;  and  a  remittance  by  mail  is  at  the 
debtor's  risk  unless  directed  by  the  creditor  to  remit  in  that  way.  Code  v. 
Com.  Travelers,  161—104 ;  22  Am.  &  Eng.  Encyc,  533.  It  seems  that  a  pay- 
ment on  Sunday  will  operate  as  a  discharge,  if  accepted ;  but  whether  it  would 
have  the  effect  to  revive  a  debt  barred  by  the  statute  of  limitations,  quaere. 
22  Am.  &  Eng.  Encyc,  530;  it  probably  would  under  our  law.  See  Sunday 
contracts,  ante.     See  generally,  3  Page  Cont.,  sec.  1393. 

2.    Payment  by  note. 

(238)   BUGGY  CO.  v.  DUKES, 

140  N.  C,  393,  52  S.  E.,  931-1906. 

Civil  action  on  contract.  Plaintiff  and  defendant  entered  into 
a  written  agreement  by  which  the  defendant  was  to  receive  certain 
buggies  on  consignment  from  the  plaintiff,  and  hold  them  and  the 
notes  and  other  proceeds  of  sale  in  trust  for  the  plaintiff.  At  the 
time  of  the  execution  of  this  agreement,  three  buggies  were  de- 
livered to  defendant,  which  were  paid  for.  Afterwards  plaintiff 
sent  other  buggies,  which  it  alleges  were  delivered  under  the  same 
contract,  and  for  which  defendant  gave  his  notes;  and  that  de- 
fendant had  disposed  of  these  buggies  for  $521.97,  which  he  had 
converted  to  his  own  use.  The  defendant  admitted  getting  the 
buggies,  but  denied  that  they  were  received  under  the  contract 
above  mentioned,  claiming  that  they  had  made  a  new  agreement 
and  that  he  merely  gave  his  notes  for  the  buggies,  without  any 
trust  or  consignment ;  and  he  offered  judgment  for  the  amount  of 
the  notes.  The  jury  found  that  the  buggies  were  delivered  under 
the  original  contract,  and  there  was  a  judgment,  and  execution 
directed  against  the  person,  from  which  defendant  appealed. 

Connor,  J.  Two  exceptions  to  His  Honor's  ruling  were  argued 
in  this  court.  Defendant  contends  that  conceding  the  fact  to  be 
as  found  by  the  jury,  the  acceptance  by  plaintiff,  of  the  promissory 
notes  for  the  price  of  the  buggies,  merged  the  original  cause  of 
action  or,  at  least,  suspended  it  until  the  notes  are  returned  or  ten- 
dered on  the  trial ;  that  the  plaintiff  can  not  retain  his  promissory, 
negotiable  notes  and,  at  the  same  time,  prosecute  an  action  against 
him  for  the  recovery  of  the  amount  received  by  him  as  his  agent. 
This  exception  was  raised  by  a  request  to  charge  the  jury.  The 
issue  did  not  involve  the  controverted  proposition ;  it  was  directed 
simply  to  the  question  of  fact  respecting  the  capacity  in  which,  or 
the  contract  under  which,  the  buggies  were  delivered  and  received. 
The  question  is,  however,  presented  upon  the  admitted  tacts  con- 
sidered in  connection  with  the  verdict.  It  is  true,  as  contended  by 
the  defendant,  that  the  acceptance  of  a  negotiable  security  for  an 
open  account,  suspends  the  right  of  action  until  the  maturity  of  the 
note,  and  then  if  the  plaintiff  will  resort  to  his  original  cause  of 


584  DISCHARGE    OF    CONTRACT. 

action,  he  must  surrender  the  security.  The  acceptance  of  the 
promissory  note,  unless  expressly  so  agreed  upon,  will  not  dis- 
charge the  original  cause  of  action.  The  law  is  well  stated  in 
Clark  on  Contracts,  435  (2  Ed.).  "In  such  a  case  the  position  of 
the  parties  is  that  the  payee,  having  certain  rights  against  the  other 
party,  under  a  contract,  has  agreed  to  take  the  instrument  from 
him  instead  of  immediate  payment  of  what  is  due  him,  or  imme- 
diate enforcement  of  his  right  of  action,  and  the  other  party,  in 
giving  the  instrument,  has  thus  far  satisfied  the  payee's  claim,  but 
if  the  instrument  is  not  paid  at  maturity,  the  consideration  of  the 
payee's  promise  fails  and  his  original  rights  are  restored  to  him. 
The  effect  of  receiving  a  negotiable  instrument  conditionally  is 
merely  to  suspend  the  right  to  sue  on  the  original  contract  until 
the  instrument  matures,  and  when  it  matures,  and  is  not  paid,  to 
give  the  right  to  sue  either  on  it  or  on  the  original  contract." 
Norton,  Bills  and  Notes  (3  Ed.),  20;  Gordon  v.  Price,  32  N.  C, 
385.  The  complaint  sets  out  the  entire  transaction  and  defendant 
makes  no  point  of  the  fact  that  his  promissory  notes  are  not  ten- 
dered. He  simply  denies  that  he  received  the  buggies  upon  the 
contract — the  jury  have  found  the  issue  against  him.  .  .  .  The 
judgment  must  be  Affirmed. 

Giving  a  note  or  draft  does  not  pay  a  debt  unless  so  agreed.  Conner  v. 
Jennings,  15 — 90;  Patton  v.  Atkinson,  23 — 262;  Mauney  v.  Coit,  86 — 471; 
Walker  v.  Mebane,  90—259 :  Dobbin  v.  Rex,  106 — 144 ;  Davis  v.  Rogers,  84— 
412;  Bank  v.  Hollingsworth,  135—556:  Ligon  v.  Dunn,  28—133;  Bank  v. 
Jones,  147 — 419.  Successive  notes  given  for  the  same  obligation  are  cumu- 
lative, unless  tbe  substituted  notes  are  essentially  different  in  terms.  Bank 
v.  Bridgers,  98 — 67.  A  new  note  for  an  antecedent  debt  retains  the  same 
security  as  the  old  one,  unless  there  is  an  intention  to  discharge.  Hyman 
v.  Devereux,  63—624;  Bristol  v.  Pearson,  107 — 562;  Jovner  v.  Stancill,  108— 
153:  Terry  v.  Robbins,  128—140;  Vick  v.  Smith,  83—80;  Collins  v.  Davis, 
132—106.  Giving  a  bond  for  the  amount  due  on  an  account  merges  the  ac- 
count, or  suspends  the  remedy  until  the  bond  is  due.  Costner  v.  Fisher.  104 — 
392;  it  is  presumed  to  include  all  items  to  that  date.  Smathers  v.  Shook, 
90—484;  Angel  v.  Angel,  127—451. 

The  note  of  a  third  person  will  be  an  absolute  satisfaction  if  so  intended. 
If  passed  at  the  time  of  contracting  the  debt,  it  is  presumed  to  be  satisfac- 
tion ;  as  to  a  preexisting  debt,  it  seems  to  be  the  other  wav.  Gordon  v.  Price, 
32—385;  Delafield  v.  Construction  Co.,  118—105.  See  generally,  22  Am.  & 
Eng.  Encvc,  550  to  567 :  3  Page  Cont.,  sees.  1397-1399 :  Symington  v.  McLin, 
18—298;  Leschen  Rope  Co.  v.  Mayflower  Gold  Min.  Co.,  173  Fed.,  855.  35 
L.  R.  A.  (N.  S.),  1.  and  subject  note;  Am.  Ins.  Co.  v.  McGehee  Liq.  Co., 
93  Ark..  62,  124  S.  W.,  252,  20  Ann.  Cas.,  855;  30  Cyc,  1194. 


by  performance;.  585 

3.    Application  of  payment. 

(239)   LEE  v.  MANLEY, 

154  N.  C,  244,  70  S.  E.,  385—1911. 

This  is  an  action  for  the  possession  of  personal  property  claimed 
by  the  plaintiff  under  a  chattel  mortgage  executed  to  him  by  the 
defendant.  The  defendant  alleges  that  the  amount  still  owing  on 
the  mortgage  was  duly  tendered  to  the  plaintiff,  $6.59,  and  pleads 
this  in  bar  of  a  recovery.  The  mortgage  was  executed  on  a  mare 
and  certain  crops  to  secure  a  debt  of  $100,  and  afterwards  the  de- 
fendant became  indebted  to  the  plaintiff  in  the  sum  of  $29,  not  in- 
cluded in  the  mortgage.  The  defendant  delivered  to  the  plaintiff 
a  part  of  the  crop  on  which  he  held  the  mortgage,  and  from  which 
plaintiff  realized  $93.41,  and  which  he  applied  first  to  the  unse- 
cured debt  and  then  to  the  mortgage  debt.  In  the  plea  of  tender 
the  defendant  did  not  allege  nor  prove  that  he  had  been  at  all 
times  ready  to  pay,  nor  did  he  pay  the  money  into  court.  De- 
fendant appealed. 

Allen,  J.  .  .  .  Two  exceptions  are  presented  by  the  record. 
The  first  is  to  the  charge  of  the  judge  as  to  the  application  of  the 
payment  of  $93.41,  which  is  as  follows:  "That  if  plaintiff  re- 
ceived the  mortgaged  property  from  defendant  and  sold  the  same, 
or  retained  the  said  property  for  his  own  use,  the  defendant  had 
a  right  to  direct  its  application,  and  if  so  directed  by  the  defend- 
ant, plaintiff  would  have  to  credit  same  to  the  secured  debt ;  but 
if  defendant  failed  to  direct  its  application,  then  plaintiff  might 
apply  it  to  either  claim  as  he  saw  fit;  if  neither  plaintiff  nor  de- 
fendant applied  the  payment,  then  the  law  would  apply  it  to  the 
most  precarious  debt — in  the  case  at  bar,  the  unsecured  debt ;"  and 
the  second  is  to  the  refusal  to  give  the  instruction  asked  by  the 
defendant,  as  to  the  effect  of  a  tender,  which  is  as  follows :  "That 
if  the  jury  shall  find  from  the  evidence  that  the  defendant  was 
entitled  to  be  credited  on  the  mortgage  debt  with  the  peanuts  re- 
ceived by  the  plaintiff,  and  if  the  jury  shall  further  find  from  the 
evidence  that  the  defendant  through  his  attorney  tendered  balance 
due  on  the  mortgage  debt  before  the  bringing  of  this  suit,  that  said 
tender  would  be  a  discharge  and  release  of  the  mortgaged  prop- 
erty, and  the  jury  should  answer  the  first  issue,  $6.59,  with  in- 
terest." 

The  charge  given  by  His  Honor  is  erroneous.  The  question  is 
fully  discussed  and  the  authorities  collated  in  Cyc,  vol.  30,  p.  1228 
et  seq.  The  general  rule  as  to  the  application  of  payments  is  that 
the  debtor  has  the  right,  in  the  first  instance,  to  direct  the  appli- 


586  DISCHARGE    OF    CONTRACT. 

cation  of  a  payment  made  to  a  creditor  who  holds  a  secured  and 
an  unsecured  debt,  and  that  this  right  must  be  exercised  at  the 
time  the  payment  is  made.  Miller  v.  Womble,  122  N.  C,  139. 
If  the  debtor  does  not  exercise  the  right  the  creditor  may  apply 
the  payment  to  either  debt  (Moss  v.  Adams,  39  N.  C,  43;  Sprinkle 
v.  Martin,  72  N.  C,  92;  Young  v.  Alford,  118  N.  C,  220)  ;  or 
he  may  apply  a  part  to  one  debt  and  the  remainder  to  the  other 
(Young  v.  Alford,  supra)  ;  and  he  is  not  restricted  to  the  time  the 
payment  is  made.  If,  however,  he  makes  the  application,  he  can 
not  change  it  without  the  consent  of  the  debtor.  Cyc,  vol.  30, 
1239,  and  note,  where  many  authorities  are  collected.  If  neither 
the  debtor  nor  the  creditor  makes  the  application,  the  law  applies 
it  to  the  unsecured  debt.  Miller  v.  Womble,  supra.  It  was  this 
rule  which  the  judge  presiding  undertook  to  enforce,  but  it  has  no 
application  to  the  facts  in  this  record.  The  payment  in  this  case 
was  a  part  of  the  proceeds  of  the  property  conveyed  in  the  chattel 
mortgage,  and  the  creditor  knew  this.  The  execution  of  the  mort- 
gage was  an  application  of  the  property  to  the  payment  of  the  debt 
secured  therein,  and  this  could  not  be  changed  without  the  consent 
of  the  debtor.  Bonner  v.  Styron,  113  N.  C,  32.  The  plaintiff  al- 
leged that  the  defendant  gave  his  consent,  and  the  defendant  de- 
nied it.  This  presented  a  question  for  the  jury,  which  was  with- 
drawn by  the  charge  of  His  Honor. 

It  would  not  be  necessary  to  consider  the  request  to  instruct  the 
jury  as  to  the  effect  of  a  tender,  if  it  was  not  reasonably  certain 
that  the  same  question  will  be  presented  on  another  trial.  We 
think  the  judge  properly  refused  to  give  the  instruction.  The  plea 
of  tender  is  defective  in  that,  in  addition  to  alleging  that  he  ten- 
dered the  amount  due,  the  defendant  fails  to  allege  that  he  has  at 
all  times  since  the  tender  been  ready,  able,  and  willing  to  pay,  and 
in  failing  to  accompany  the  plea  by  payment  of  the  money  into 
court ;  and  the  evidence  in  support  of  the  plea  is  equally  defective. 

In  Dixon  v.  Clark,  57  E.  C.  L.  R.,  376,  Wilde,  C.  J.,  announces 
the  rule  as  follows:  "The  principle  of  the  plea  of  tender,  in  our 
apprehension,  is  that  the  defendant  has  been  always  ready  (tou- 
jours  prist)  to  perform  entirely  the  contract  on  which  the  action 
is  founded  ;  and  that  he  did  perform  it,  as  far  as  he  was  able,  by 
tendering  the  requisite  money;  the  plaintiff  himself  precluding  a 
complete  performance  by  refusing  to  receive  it.  And  as,  in  ordi- 
nary cases,  the  debt  is  not  discharged  by  such  tender  and  refusal, 
the  plea  must  not  only  go  on  to  allege  that  the  defendant  is  still 
ready  (uncore  prist),  but  must  be  accompanied  by  a  profert  in 
curiam  of  the  money  tendered;"  and  this  is  cited  with  approval  in 
Rank  v.  Davidson,  70  N.  C,  122.  In  Bilzell  v.  Haywood,  96  U. 
S.,  580,  it  is  said  that,  "To  have  the  effect  of  stopping  interest  or 


BY    PERFORMANCE.  587 

costs,  a  tender  must  be  kept  good,"  and  in  Soper  v.  Jones,  56  Md., 
503,  "A  plea  of  tender,  not  accompanied  by  profcrt  in  curiam, 
is  bad." 

In  the  case  of  Parker  v.  Beasley,  116  N.  C,  1,  it  is  held  that 
an  unaccepted  tender  of  the  amount  due  on  a  debt  secured  by  a 
mortgage  does  not  discharge  the  lien  of  the  mortgage,  unless  the 
tender  be  kept  good  and  the  money  be  paid  into  court,  and  the 
same  doctrine  is  affirmed  in  Dickerson  v.  Simmons,  141  N.  C, 
330.  This  last  case  notes  the  distinction  between  a  tender  made 
on  the  day  the  debt  becomes  due,  called  the  law  day,  and  one  made 
afterwards,  and  holds  that  the  first  discharges  the  mortgage,  al- 
though the  plea  of  tender  is  not  accompanied  by  payment  into 
court.  The  principle  is  different  when  the  rights  of  a  surety,  or 
of  one  standing  in  the  relation  of  a  surety,  are  involved.  In  such 
case  a  valid  tender  unaccepted  releases  the  surety  and  his  prop- 
erty conveyed  to  secure  the  debt  of  the  principal,  and  it  is  not 
necessary  to  pay  the  money  into  court  to  make  the  plea  good. 
Smith  v.  B.  &  L.  Assn.,  119  N.  C,  261. 

For  the  reasons  given,  there  must  be  a  Venire  de  novo. 

To  the  same  effect,  Moose  v.  Barnhardt,  116 — 785;  Shoe  Co.  v.  Peacock, 
150—545;  Stone  v.  Rich.  160—161:  Fench  v.  Richardson,  167—41;  Am. 
Woolen  Co.  v.  Maaget,  86  Conn.,  234,  85  Atl.,  583,  Ann.  Cas.,  1913  E,  889; 
30  Cyc,  1227. 

In  mutual  accounts,  the  items  are  applied  in  the  order  made.  Jenkins  v. 
Smith,  72 — 296;  Lester  v.  Houston,  101 — 608.  Where  several  notes,  due  at 
different  times,  are  secured  by  a  mortgage,  and  all  are  to  become  due  upon 
default  in  one,  in  a  sale  made  after  the  first  one  is  due  the  money  will  be 
applied  to  all  ratably.  Kitchin  v.  Grandy,  101 — 86.  The  party  pleading  pay- 
ment must  prove  it.     Harmon  v.  Taylor,  98 — 341. 

The  creditor  mav  applv  an  undirected  pavment  only  to  legal  claims.  Ar- 
mour Packing  Co.  "v.  Vin.  Bend  L.  Co.,  149  Ala..  205,  13  Ann.  Cas.,  951.  In 
some  courts  it  is  held  that  a  creditor  may  apply  an  undirected  payment  to  a 
debt  barred  by  the  statute  of  limitations  so  as  to  revive  it;  but  the  majority 
opinion  seems  to  be  that  while  he  mav  applv  the  pavment,  it  does  not  revive 
the  debt.  Supplv  Co.  v.  Dowd,  146—191;  Young  v.  Alford,  118—215;  Mc- 
Bride  v.  Noble,  40  Colo.,  372.  13  Ann.  Cas.,  1202;  Anderson  v.  Nystrom,  114 
N.  W.,  742,  13  L.  R.  A.  (N.  S.),  1141,  14  Ann.  Cas.,  54;  16  E.  R.  C,  193:  14 
L.  R.  A.,  208,  and  note;  2  Am.  &  Eng.  Encyc,  438. 

The  civil  law  rule  favored  the  debtor  in  the  application  of  payment,  while 
the  common  law  favors  the  creditor.  Clark  Cont..  437 ;  2  Am.  &  Eng.  Encyc, 
436  et  seq.     See  3  Page  Cont.,  sec.  1402  et  seq. 


588  discharge;  of  contract. 


Sec.  4.  Tender. 

(240)  PATTON  v.  HUNT, 

64  N.  C,  163—1870. 

In  this  action  there  was  a  judgment  for  plaintiff,  and  defendant 
appealed. 

Rodman,  J.  This  is  an  action  of  covenant,  brought  on  the  obli- 
gation of  the  defendant  to  deliver  to  the  plaintiff,  twelve  months 
after  the  1st  of  October,  1864,  a  certain  sum,  in  good  current  bank 
notes  on  banks  in  North  and  South  Carolina,  for  value  received. 
The  defendant  pleaded  a  tender  of  such  notes  to  the  plaintiff  on 
the  day,  and  a  refusal  by  him  to  accept,  but  did  not  aver  a  con- 
tinued readiness,  or  make  a  profert  in  court.  Upon  the  tender, 
the  case  states  that  the  agent  of  the  defendant  met  the  plaintiff 
and  told  him,  "that  he  was  sent  to  pay  the  obligation  in  South 
Carolina  bank  bills,  and  that  at  the  time  he  had  such  notes  in  his 
possession,"  and  the  plaintiff  then  refused  to  accept  them.  The 
judge  instructed  the  jury  that  the  offer  of  payment  did  not  bar 
the  plaintiff's  recovery.  We  do  not  know  whether  this  instruction 
was  given  under  an  opinion  that  what  was  done  was  insufficient  as 
a  tender,  or  that  any  tender  would  be  insufficient  unless  the  plea 
averred  a  continuing  readiness,  and  was  accompanied  by  a  profert. 
If  the  alleged  tender  was  insufficient  in  either  point  of  view,  the 
judge  committed  no  error,  and  we  are  compelled,  therefore,  some- 
what to  consider  both  questions.  There  appears  to  be  a  material 
difference  between  a  plea  of  tender  in  an  action  on  a  contract  to 
pay  money,  and  one  on  a  contract  to  deliver  specific  articles.  The 
first  must  aver  a  continued  readiness  to  pay,  and  bring  the  money 
into  court.  But  the  contract  in  this  case  must  be  held  to  be  for 
the  delivery  of  specific  articles.  Neither  when  it  was  made,  nor 
when  it  became  due,  were  bank  bills  money ;  a  note  payable  in 
them  is  not  negotiable,  nor  can  an  action  of  debt  be  maintained  on 
it.     Lackey  v.  Miller,  Phil.,  26. 

The  authorities  to  which  we  were  referred  by  the  counsel  in  an 
action  for  the  nondelivery  of  specific  articles,  may  be  for  the  de- 
fendant, sustain  the  position,  that  a  plea  of  tender  is  sufficient 
without  an  averment  of  continued  readiness  and  without  a  profert. 
Tn  2  Pars.  Cont,  164:  "If  by  the  terms  of  the  contract,  certain 
specific  articles  are  to  be  delivered  at  a  certain  time  and  place,  in 
payment  of  an  existing  debt,  this  contract  is  fully  discharged,  and 
the  debt  is  paid,  by  a  complete  and  legal  tender  of  the  articles,  at 
the  time  and  place,  although  the  promisee  was  not  there  to  receive 
them,  and  no  action  can  thereafter  be  maintained  on  the  contract, 


BY    PERFORMANCE.  5S' ' 

but  the  property  in  the  goods  has  passed  to  the  creditor."  At  p. 
167,  he  says,  "Whenever  a  tender  would  discharge  the  contract,  it 
must  be  so  complete  and  perfect  as  to  vest  the  property  in  the 
promisee,  and  give  him,  instead  of  jus  ad  rem  which  he  loses,  an 
absolute  jus  in  re."  The  articles  must  be  separated  so  as  to  be 
capable  of  identification  as  on  a  sale.  A  tender  of  one  sheep,  in  a 
flock  of  several,  or  of  ten  bushels  of  grain,  in  a  bulk  of  more,  would 
be  insufficient.     Powell  v.  Hill,  decided  at  this  term  (6-1 — 169). 

In  our  opinion,  the  doctrine  thus  stated  by  Parsons  rests  on 
sound  reasons  of  justice  and  convenience.  A  promisee  should  not 
be  allowed,  by  a  wrongful  refusal  to  accept  the  articles  for  whose 
delivery  he  has  contracted,  to  throw  on  the  promisor  the  burden 
of  continuing  to  keep  them  at  his  own  expense  and  risk.  In  some 
cases  it  has  been  held  after  a  refusal  to  accept,  the  promisor  may 
throw  the  goods  upon  the  ground,  and  be  no  longer  liable  for 
them.  However  this  may  be,  if  he  keeps  them  it  is  as  the  bailee 
of  the  promisee,  who  is  regarded  as  the  owner;  if  he  converts 
them  to  his  own  use,  he  is  liable  for  the  value  at  the  time  of  such 
conversion.  His  situation  is  certainly  different  from  that  of  a 
promisor  bound  to  deliver  at  all  events.     .     .     . 

Venire  de  novo. 

LEE  v.  MANLEY, 

Ante  (239). 

To  make  a  valid  tender,  the  money  must  be  produced,  unless  production  is 
waived.  North  v.  Mallett,  3—151;  Mills  v.  Huggins,  14—58;  Smith  v.  Loan 
Asso.,  119—257.  When  the  debtor  tendered  the  money,  and  the  creditor  said 
he  had  no  use  for  it  then,  and  the  debtor  decided  to  keep  it  longer,  he  lost 
the  effect  of  tender.  To  make  a  valid  tender  so  as  to  stop  interest,  the 
debtor  must  be  ready,  able  and  willing  to  pay,  and  so  inform  the  creditor, 
and  produce  the  money  unless  waived.  Terrell  v.  Walker,  65—91 :  Phelps  v. 
Davenport,  151—22;  Gavlord  v.  McCoy,  161—685;  it  must  be  unconditional, 
unless  it  be  a  condition  which  the  debtor  has  a  right  to  make.  Rives  v.  Dud- 
lev.  56—126.    See  38  Cyc,  137  et  seq.;  6  E.  R.  C,  589,  595;  6  R.  C.  L.,  949. 

Tender  must  be  kept  good  by  being  always  ready  to  pay;  and  in  suit,  the 
money  must  be  paid  into  court.  State  v.  Biggs,  65—159;  Terrell  v.  Walker, 
65—91;  Cope  v.  Brvson,  60—112;  Parker  v.  Beasley,  116—1;  Medicine  Co.  v. 
Davenport,  163—294;  DeBruhl  v.  Hood.  156—52.  Tender  of  the  money  stops 
interest,  but  a  subsequent  demand  and  refusal  defeats  the  plea,  and  sets  in- 
terest running  again,  at  least  from  the  demand.  Bank  v.  Davidson,  70— 118; 
Tate  v  Smith  70—685.  Tender  must  be  before  suit  to  bar  the  action.  \\  in- 
ninoham  v  Redding,  51—26,  but  if  made  after  suit  and  money  paid  into 
court,  it  may  stop  further  costs.  Murray  v.  Windley,  29—201 ;  Cope  v.  Brv- 
son 60—112.  Tender  of  principal,  interest  and  costs,  before  the  day  of  sale, 
or  even  on  the  day  of  sale,  invalidates  a  sale  under  mortgage.  Capehurt  v. 
Biggs,  77—261.     See  also  Tavlor  v.  Brewer,  127—75. 

When  the  debt  is  pavable  on  demand,  the  debtor  may  tender  the  amount 
at  any  time.  Wooten  v.  Sherrard,  68—334.  Upon  an  agreement  of  compro- 
mise," a  tender  of  the  amount  is  valid.     Boykin  v.  Buie,  109—301 

Except  in  contracts  for  the  payment  of  money,  a  proper  tender  ot  per- 
formance discharges  the  obligation,  while  the  failure  to  accept  performance 
is  a  breach  of  contract  for  which  the  party  offering  to  perform  is  entitled  to 


590  DISCHARGE    OF    CONTRACT. 

damages.  Some  of  these  remedies  are  mentioned  in  Patton  v.  Hunt,  supra, 
and  others  will  be  given  under  the  cases  for  Breach.  See  Williston  Sales, 
868 ;  6  R.  C.  L.,  950. 

When  the  promisor  is  to  deliver  specific  articles,  he  must  tender  them  at 
the  time  and  place  .fixed ;  if  no  place  fixed,  and  the  articles  are  cumbrous,  he 
should  ask  the  promisee  to  fix  a  time  and  place  for  delivery,  and  must  show 
that  he  was  there  ready.     Mingus  v.  Pritchett,  14 — 78;  Blalock  v.  Clark,  133— 

-in/ 

For  tender  of  judgment,  see  Revisal,  860,  861,  in  Superior  Court,  and  1471 
in  justice's  court.    Rand  v.  Harris,  83 — 486;  Russ  v.  Brown,  113—227. 

Whether  tender  will  discharge  the  lien  of  a  mortgage,  see  Lee  v.  Manley, 
supra;  20  Am.  &  Eng.  Encyc,  1062. 


BY    BREACH.  591 


CHAPTER  III. 

Discharge  by  Breach. 

Sec.  1.    By  renunciation. 

1.    Before  the  time  of  performance. 

(241)   HEISER  v.  MEARS, 

120  N.  C,  443,  27  S.  E.,  117—1897. 

Faircloth,  C.  J.  The  defendants,  retail  merchants  in  Ashe- 
ville,  N.  C,  on  May  21,  1894,  contracted  with  the  plaintiff,  a 
wholesale  manufacturer  of  Baltimore,  Md.,  for  a  lot  of  shoes  to 
be  soon  thereafter  manufactured  and  delivered.  On  May  26,  1894, 
the  plaintiff  received  written  notice  from  the  defendants  not  to 
make  the  shoes,  and  that  the  defendants  could  not  take  them.  At 
that  time  the  plaintiff  "had  cut  the  leather  for  the  uppers  prepara- 
tory to  making  the  shoes  and  partly  fitted  them  to  the  lasts."  The 
plaintiff  refused  to  accept  the  countermand,  finished  the  shoes  and 
tendered  them  to  the  defendants,  who  refused  to  receive  and  pay 
for  them.  The  plaintiff  now  sues  for  the  entire  contract  price. 
His  Honor  charged  the  jury  that  the  measure  of  the  plaintiff's 
damages  was  the  difference  between  the  contract  price  and  the 
market  value  of  the  goods  at  the  time  they  were  to  be  delivered. 
Plaintiff  appealed. 

In  a  contract  for  the  sale  of  specific  articles,  then  in  existence 
and  ready  for  delivery,  and  the  purchaser  refuses  compliance,  the 
seller  has  three  remedies  at  his  option : 

1.  To  treat  the  property  as  his  own  and  sue  for  damages. 

2.  As  the  property  of  the  buyer  and  sue  for  the  price. 

3.  As  the  property  of  the  buyer,  and  to  resell  it  for  him  and 
sue  for  the  difference  between  the  contract  price  and  that  obtained 
on  resale. 

A  contract  for  specific  articles  to  be  thereafter  manufactured 
and  delivered  is  executory,  and  no  title  to  the  article  passes  until 
finished  and  delivered,  and  the  buyer  has  no  title  to,  or  interest  in, 
the  material  used. 

The  option,  in  the  instance  first  above  stated,  is  allowed  the 
vendor,  because  he  is  ready  to  comply  and  the  vendee  is  guilty  of 
a  breach  of  promise. 

When  the  contract  is  executory  and  the  buyer  countermands  his 
order,  that  is  notice  to  the  other  party  that  he  elects  to  rescind  his 


592  DISCHARGE    OF    CONTRACT. 

contract  and  submit  to  the  legal  measure  of  damages,  which  must 
result  from  every  breach  of  contract. 

We  think  His  Honor  gave  the  jury  proper  instruction,  except 
that  he  should  have  said,  "at  the  time  of  the  breach,"  instead  of 
"at  the  time  the  goods  were  to  be  delivered."  That  error  does  not 
hurt  the  defendant,  as  he  does  not  appeal.  His  Honor  properly 
refused  the  plaintiff's  prayer  for  special  instructions.  When  the 
plaintiff  was  notified  of  the  defendant's  rescission  of  the  agree- 
ment, it  seems  unreasonable  that  the  plaintiff  should  continue  to 
manufacture  and  thus  continue  to  increase  his  damages.  This 
conclusion  assumes  that  the  title  to  the  shoes  never  passed,  as  it 
could  not  possibly  do,  before  they  were  finished  and  put  in  the 
condition  contemplated  by  the  contractors.  Benjamin  on  Sales, 
sections  1117,  1121,  860n  (9);  Hosmer  v.  Wilson,  7  Mich.,  294, 
303;  Devane  v.  Fennell,  24  N.  C,  36.  This  was  the  only  question 
in  the  case.  Affirmed. 

See  Grist  v.  Williams,  111—53;  Clothing  Co.  v.  Stadium,  149—6;  Hawk  v. 
Lumber  Co.,  149—10;  Davis  v.  Bronson,  2  N.  Dak.,  300,  50  N.  W.,  836,  16 
L.  R.  A.,  655,  33  A.  S.  R.,  795 ;  6  R.  C.  L.,  1029. 

(242)   BELL  v.  HOFFMAN, 

92  N.  C,  273—1885. 

Civil  action  on  contract.  Plaintiff  agreed  to  sell  to  defendant 
the  entire  stock  of  goods  that  he  might  have  in  his  store  on  the 
1st  day  of  September,  to  be  paid  for  at  "wholesale  prices  as  per 
invoice  from  G.  Oppenheimer  &  Son,"  fixing  the  terms  of  pay- 
ment, and  providing  for  a  forfeiture  of  $50  for  noncompliance  on 
the  part  of  either  party,  which  was  secured  by  individual  notes. 
About  10  o'clock  on  the  day  specified,  the  defendant  went  to  the 
plaintiff  and  told  him  he  was  ready  to  comply  with  the  contract 
and  wished  to  take  an  inventory;  the  plaintiff  claimed  ten  percent 
on  the  prime  cost  of  the  goods;  defendant  refused  to  allow  this 
and  left.  About  2  o'clock  of  the  same  day,  the  plaintiff  saw  de- 
fendant and  offered  to  allow  him  to  take  the  inventory  at  prime 
cost,  and  defendant  declined,  saying  he  had  made  other  arrange- 
ments. 

This  action  was  brought  for  the  $50  forfeiture.  There  was  a 
judgment  against  the  plaintiff  for  the  forfeiture,  and  he  appealed. 

Merrimon,  J.  The  plaintiff  failed  to  comply  with  the  agree- 
ment set  forth  in  the  record,  and,  under  its  provisions,  by  such 
default,  became  indebted  to  the  defendant  Hoffman  in  the  sum  of 
fifty  dollars  secured  to  him  by  the  plaintiff's  promissory  note  for 
that  sum  of  money. 

At   a   reasonable   hour   of   the   day   on   which   the   plaintiff   had 


BY    BREACH.  593 

agreed  to  deliver  the  goods  to  the  defendant  named,  the  latter  went 
to  and  informed  him  that  he  was  ready  and  prepared  to  comply 
with  the  agreement  on  his  part,  and  desired  to  take  an  inventory 
of  the  goods.  That  he  was  so  ready  and  prepared  is  not  contro- 
verted, and  that  he  was,  must  be  accepted  as  the  fact. 

The  plaintiff  "claimed  ten  percent  on  the  prime  cost  price  of 
the  goods,  that  this  was  what  wholesale  price,  as  per  invoice  from 
G.  Oppenheimer  &  Son,  meant,"  and  he  then  refused  to  allow  the 
inventory  to  be  taken,  declaring  that  unless  Hoffman  would  allow 
his  demand,  he,  the  plaintiff,  "would  not  trade."  Hoffman  de- 
clined to  allow  this  demand,  and  left  the  plaintiff. 

There  could  scarcely  be  a  more  palpable  breach  of  the  agreement 
on  the  part  of  the  plaintiff.  He  refused  to  comply  with  its  terms 
and  effect.  He  made  a  demand  unwarranted  by  it,  and,  without 
reserve  or  qualification  declared  to  the  defendant  that  he  "would 
not  trade"  unless  the  latter  would  allow  his  demand.  Hoffman  was 
not  bound  to  allow  it ;  he  was  bound  to  comply  with  the  agreement 
as  far  as  he  could,  and  he  did  so,  when  he  was  ready  and  pre- 
pared to  comply  with  its  requirements  of  him  and  so  informed  the 
plaintiff.  He  was  not  obliged  to  wait  indefinitely  or  at  all  to  see  if 
the  plaintiff  would  reconsider  his  refusal  to  deliver  the  goods ;  he 
had  no  reason  to  believe  he  would  do  so,  and  there  is  nothing  in 
the  agreement  that  can  be  reasonably  construed  to  mean  that  the 
parties  to  it,  each,  should  have  all  the  first  day  of  September,  1882, 
in  which  to  decide  whether  or  not  he  would  comply  with  its  re- 
quirements of  him;  on  the  contrary,  it  was  expressly  stipulated 
that,  in  case  of  noncompliance  with  it  by  either  party,  the  non- 
complying  party  should  pay  the  other  fifty  dollars. 

The  plaintiff  was  bound  to  comply  with  the  agreement  according 
to  its  legal  effect;  he  failed  to  do  so  at  his  peril;  and  his  failure 
and  refusal  to  deliver  the  goods  on  the  day  specified,  was  noncom- 
pliance with  it.  His  claim  that  ten  percentum  should  be  added 
to  the  prime  cost  price  of  the  goods  was  obviously  unfounded. 
The  plain  terms  of  the  agreement  left  nothing  to  doubt,  the  prices 
to  be  paid  were  fixed,  and  they  were  the  "wholesale  prices  as  per 
invoice  from  G.  Oppenheimer  &  Son."  Any  question  as  to  prime 
cost  and  ten  percentum  added  thereto  was  outside  of  and  foreign 
to  the  agreement. 

It  seems  that  the  plaintiff  thought  so  himself,  for  afterwards,  on 
the  same  day,  he  proposed  to  abandon  his  demand.  This  proposi- 
tion came  too  late ;  several  hours  before  he  made  it  he  had  refused 
to  comply  with  the  agreement ;  one  flat  refusal  was  enough  ;  this 
entitled  the  defendant  to  the  forfeiture  of  $50.  and  relieved  him 
from  all  obligations  to  take  the  goods  at  any  price.     .     .     . 


594  DISCHARGE    OF    CONTRACT. 

There  is  no  error  of  which  the  plaintiff  has  the  right  to  com- 
plain, and  judgment  must  be  entered  for  the  defendant.  Judgment 
accordingly. 

(243)  ROEHM  v.  HORST, 

178  U.  S.,  1.  44  L.  Ed.,  953—1899. 

This  was  an  action  for  the  breach  of  four  several  contracts  for 
the  sale  of  hops,  extending  over  five  years ;  Roehm  refused  to 
accept  the  hops  when  offered,  and  notified  Horst  that  he  would 
not  take  any  in  the  future,  and  Horst  brought  suit.  From  a  judg- 
ment for  Horst,  Roehm  appealed. 

Fuller,  C.  J.  .  .  .  The  first  contract  falls  within  the  rule 
that  a  contract  may  be  broken  by  the  renunciation  of  liability 
under  it  in  the  course  of  performance  and  suit  may  be  immediately 
instituted.  But  the  other  three  contracts  involve  the  question 
whether,  where  the  contract  is  renounced  before  performance  is 
due,  and  the  renunciation  goes  to  the  whole  contract,  and  is  abso- 
lute and  unequivocal,  the  injured  party  may  treat  the  breach  as 
complete  and  bring  his  action  at  once.     .     .     . 

It  is  not  disputed  that  if  one  party  to  a  contract  has  destroyed 
the  subject-matter,  or  disabled  himself  so  as  to  make  performance 
impossible,  his  conduct  is  equivalent  to  a  breach  of  the  contract, 
although  the  time  for  performance  has  not  arrived ;  and  also  that 
if  a  contract  provides  for  a  series  of  acts,  and  actual  default  is 
made  in  the  performance  of  one  of  them,  accompanied  by  a  re- 
fusal to  perform  the  rest,  the  other  party  need  not  perform,  but 
may  treat  the  refusal  as  a  breach  of  the  entire  contract  and  re- 
cover accordingly.  And  the  doctrine  that  there  may  be  an  antici- 
patory breach  of  an  executory  contract  by  an  absolute  refusal  to 
perform  it  has  become  the  settled  law  of  England  as  applied  to 
contracts  for  services,  for  marriage,  and  for  the  manufacture  and 
sale  of  goods.  The  cases  are  extensively  commented  on  in  the 
notes  to  Cutter  v.  Powell,  2  Smith  Lead.  Cas.,  1212,  1220.     .     .     . 

In  Hochster  v.  De  la  Tour,  2  El.  &  BL,  678,  plaintiff,  in  April, 
1S52,  had  agreed  to  serve  defendant,  and  defendant  had  under- 
taken to  employ  him,  as  courier,  for  three  months  from  June  1, 
on  certain  terms.  On  the  11th  of  May,  defendant  wrote  plaintiff 
that  he  had  changed  his  mind,  and  declined  to  avail  himself  of 
plaintiff's  services.  Thereupon,  on  May  22,  plaintiff  brought  an 
action  at  law  for  breach  of  contract  in  that  defendant,  before  the 
said  1st  of  June,  though  plaintiff  was  always  ready  and  willing  to 
perform,  refused  to  engage  plaintiff  or  perform  his  promise,  and 
then  wrongfully  exonerated  plaintiff  from  the  performance  of  the 
agreement,  to  his  damage.  And  it  was  ruled  that  as  there  could 
be  a  breach  of  contract  before  the  time  fixed  for  performance,  a 


BY    BREACH.  595 

positive  and  absolute  refusal  to  carry  out  the  contract  prior  to  the 
date  of  actual  default  amounted  to  such  a  breach. 

In  the  course  of  the  argument,  Mr.  Justice  Crompton  observed: 
"When  a  party  announces  his  intention  not  to  fulfill  the  contract, 
the  other  side  may  take  him  at  his  word  and  rescind  the  contract. 
That  word  'rescind'  implies  that  both  parties  have  agreed  that  the 
contract  shall  be  at  an  end,  as  if  it  had  never  been.  But  I  am 
inclined  to  think  that  the  party  may  also  say :  'Since  you  have 
announced  that  you  will  not  go  on  with  the  contract,  I  will  consent 
that  it  shall  be  at  an  end  from  this  time ;  but  I  will  hold  you  liable 
for  the  damage  I  have  sustained ;  and  I  will  proceed  to  make  that 
damage  as  little  as  possible  by  making  the  best  use  of  my  lib- 
erty.'"     .     .     . 

In  Frost  v.  Knight,  L.  R.  7  Exch.,  Ill,  defendant  had  prom- 
ised to  marry  plaintiff  so  soon  as  his  (defendant's)  father  should 
die.  While  his  father  was  yet  alive  he  absolutely  refused  to  marry 
plaintiff,  and  it  was  held  in  the  exchequer  chamber  .  .  .  that 
for  this  breach  an  action  was  well  brought  during  the  father's 
lifetime.  Cockburn,  Ch.  J.,  said:  "The  law  with  reference  to  a 
contract  to  be  performed  at  a  future  time,  where  the  party  bound 
to  performance  announces  prior  to  the  time  his  intention  not  to 
perform  it,  as  established  by  the  cases  of  Hochster  v.  De  la  Tour, 
2  El.  &  BL,  678,  and  the  Danube  &  B.  S.  Rwy.  &  K.  Har.  Co.  v. 
Xenos,  13  C.  B.  N.  S.,  825,  on  the  one  hand,  and  Avery  v.  Bow- 
den,  5  El.  &  Bl.,  714 ;  Reid  v.  Hoskins,  6  El  &  Bl.,  953,  and  Bar- 
rick  v.  Buba.  2  C.  B.  N.  S.,  563,  on  the  other,  may  be  thus  stated: 
The  promisee,  if  he  pleases,  may  treat  the  notice  of  intention  as 
inoperative,  and  await  the  time  when  the  contract  is  to  be  exe- 
cuted, and  then  hold  the  other  party  responsible  for  all  the  conse- 
quences of  nonperformance ;  but  in  that  case  he  keeps  the  contract 
alive  for  the  benefit  of  the  other  party  as  well  as  his  own ;  he  re- 
mains subject  to  all  his  own  obligations  and  liabilities  under  it, 
and  enables  the  other  party,  not  only  to  complete  the  contract,  if 
so  advised,  notwithstanding  his  previous  repudiation  of  it,  but  also 
to  take  advantage  of  any  supervening  circumstance  which  would 
justify  him  in  declining  to  complete  it.  On  the  other  hand,  the 
promisee  may,  if  he  thinks  proper,  treat  the  repudiation  of  the 
other  party,  as  the  wrongful  putting  an  end  to  the  contract,  and 
may  at  once  bring  his  action  as  on  a  breach  of  it ;  and  in  such 
action  he  will  be  entitled  to  such  damages  as  would  have  arisen 
from  the  nonperformance  of  the  contract  at  the  appointed  time, 
subject,  however,  to  abatement  in  respect  of  any  circumstances 
which  may  have  afforded  him  the  means  of  mitigating  his  loss."  .  .  . 

The  doctrine  which  thus  obtains  in  England  has  been  almost 
universally  accepted  by  the  courts  of  this   country,   although  the 


596  DISCHARGE    OF    CONTRACT. 

precise  point  has  not  been  ruled  by  this  court.  (The  court  then 
quotes  from  Smoot's  Case,  15  Wall.,  36;  Lovell  v.  St.  Louis  Mut. 
L.  Ins.  Co.,  Ill  U.  S.,  264;  Dingley  v.  Oler,  117  U.  S.,  490; 
Cleveland  Roll.  Mill  v.  Rhodes,  121  U.  S.,  255 ;  Anvil  Min.  Co.  v. 
Humble,  153  U.  S.,  540;  Pierce  v.  Tenn.  Coal,  I.  &  R.  Co.,  173 
U.  S.,  1.  The  rule  is  disapproved  in  Daniels  v.  Newton,  114 
Mass.,  530,  and  in  Stanford  v.  McGill,  6  N.  D.,  536,  72  N.  W., 
938,  38  L.  R.  A.,  760.)     .    .    . 

As  to  the  question  of  damages,  if  the  action  is  not  premature, 
the  rule  is  applicable  that  plaintiff  is  entitled  to  compensation 
based,  as  far  as  possible,  on  the  ascertainment  of  what  he  would 
have  suffered  by  the  continued  breach  of  the  other  party  down  to 
the  time  of  complete  performance,  less  any  abatement  by  reason 
of  circumstances  of  which  he  ought  reasonably  to  have  availed 
himself.  If  a  vendor  is  to  manufacture  goods,  and  during  the 
process  of  manufacture  the  contract  is  repudiated,  he  is  not  bound 
to  complete  the  manufacture,  and  estimate  his  damages  by  the  dif- 
ference between  the  market  price  and  the  contract  price,  but  the 
measure  of  damage  is  the  difference  between  the  contract  price 
and  the  cost  of  performance.  Hinckley  v.  Pittsburgh  Bes.  Steel 
Co.,  121  U.  S.,  264.  .  .  .  Although  he  may  receive  his  money 
earlier  in  this  way,  and  may  gain,  or  lose,  by  the  estimation  of  his 
damage  in  advance  of  the  time  for  performance,  still,  as  we  have 
seen,  he  has  the  right  to  accept  the  situation  tendered  him,  and  the 
other  party  can  not  complain.     .     .     .  Judgment  affirmed. 

Only  a  part  of  the  discussion  in  the  above  case  is  given.  The  Lake  Shore 
&  Mich.  R.  R.  v.  Richards,  152  111.,  59.  30  L.  R.  A.,  33;  Wester  v.  Casein  Co., 
206  N.  Y.,  506.  100  N.  E.  488,  Ann.  Cas.,  1914  B,  377;  Bradv  v.  Oliver,  125 
Tenn..  595.  147  S.  \V..  1135.  Ann.  Cas.,  1913  C,  389;  6  R.  C.  L..  1023. 

See  also  Grandy  v.  Small,  50—50.  The  party  relying  upon  a  renunciation 
must  show  it  unmistakably,  and  that  he  accepted  it  and  acted  upon  it.  Sit- 
terding  v.  Grizzard,  114—108;  Faw  v.  W'hittington,  72—321;  Holden  v.  Pure- 
foy,  108 — 163.  As  to  what  amounts  to  renunciation,  see  Dingley  v.  Oler,  117 
U.  S.,  490;  Clark  Cont.  444;  7  Am.  &  Eng.  Encyc,  150;  3  Page  Cont.,  sees. 
1436-1442:  9  Cyc,  635;  30  L.  R.  A.,  1;  Register  Co.  v.  Hill,  136—272. 

2.    During  the  time   of  performance. 

(244)  THIGPEN  v.  LEIGH, 
93  X.  C.  47—1885. 

Civil  action  to  enforce  an  agricultural  lien.  One  Riddick,  a 
cropper  on  the  land  of  defendant,  made  an  agricultural  lien  to  F. 
L.  Thigpen,  who  afterwards  assigned  it  to  J.  R.  Thigpen,  the 
plaintiff.  The  cropper  abandoned  his  crop  in  June,  leaving  it  in 
bad  condition  ;  the  defendant  notified  the  plaintiff  to  cultivate  the 
crop  as  the  cropper  was  to  do,  and  he  refused  to  do  so,  but  told 
defendant  to  cultivate  the  crop  and  pay  the  expenses  out  of  it ; 


BY    BREACH.  597 

defendant  said,  "If  I  do,  you  shall  not  have  a  cent  of  it."  The 
defendant  harvested  the  crop,  and  after  paying  the  rent  and  the 
actual  expense,  had  $56  over.  Plaintiff  sued  for  this  amount. 
There  was  a  judgment  for  plaintiff,  and  defendant  appealed. 

Ashe,  J.  We  think  that  the  plaintiff  had  no  right  to  this  bal- 
ance. We  are  unable  to  find  any  authority  in  point,  and  the 
learned  counsel  who  appeared  before  us  for  the  defendant,  ex- 
pressed their  inability  to  find  any.  We  are  therefore  compelled  to 
decide  the  case  upon  general  principles  of  law  and  justice. 

We  start  out  with  the  proposition  that  Riddick,  the  cropper  of 
the  defendant,  having  abandoned  the  crop  in  violation  of  his  con- 
tract,   was   without   remedy   against   the    defendant.      For    "where 
there  is  an  entire  contract,  and  the  plaintiff  has  performed  a  part 
of  it,  and  without  legal  excuse  and  against  the  consent  of  the  de- 
fendant has   refused  to  perforin  the   remaining  part,   he  can   not 
recover  anything  for  the  part  performed."     Niblett  v.  Herring,  49 
N.   C,  262;   Dula  v.   Cowles,   52   N.   C,  290.     Every  agreement 
made  by  the  owner  of  land  with  one  to  cultivate  his  land  as  a 
cropper^  must  necessarily  be  a  special  contract,  and  when  that  is 
so,  neither  party  to  the  contract,  under  the  former  practice,  could 
recover   on    what   was    called    in    the    former    system    a    quantum 
meruit,  when  it  is  made  to  appear  that  he  has  against  the  consent 
of  the  other  party  wilfully   refused  to  perform  his  part  of  the 
agreement.    Winstead  v.  Reid,  44  N.  C,  76. 

These  authorities  go  to  show  that  Riddick,  by  the  wilful  aban- 
donment of  the  crop  in  the  month  of  June,  against  the  consent  of 
the  defendant,  has  lost  all  right  to  it.  To  whom,  then,  did  it  be- 
long? Of  course  to  the  defendant,  the  landlord,  who  was  entitled 
to  his  rent,  and  who  cultivated  the  crop  to  its  maturity,  unless  J. 
R.  Thigpen,  by  his  advancement  to  Riddick,  the  cropper,  acquired 
such  a  lien  on  the  crops  as  would  entitle  him  to  be  paid  thereout, 
subject  to  the  superior  lien  of  the  defendant  as  landlord. 

This  brings  us  to  the  inquiry,  what  interest  in  the  crop  does  the 
lien  of  agricultural  advancements  give  to  him  who  makes  them? 
What  is  the  definition  of  a  lien?  It  is  simply  the  right  to  have 
a  demand  satisfied  out  of  the  property  of  another.  The  lien  for 
advancement  differs  nothing  in  its  nature  and  operation  from  that 
of  a  judgment  which  has  been  held  to  constitute  no  property  in 
the  land  of  the  debtor,  only  a  right  to  have  the  judgment  satisfied 
out  of  the  land  to  which  the  lien  had  attached.  Dail  v.  Freeman, 
92  N.  C,  351,  and  the  authorities  there  cited  in  support  of  the 
principle.  The  principle  must  apply  to  personalty  as  well  as  to 
realtv,  whenever  a  lien  is  created. 

Apply  the  principle  to  our  case.  Thigpen,  by  his  advancements 
to  Riddick,  who  was  a  cropper,  acquired  no  right  of  property  in 


598  DISCHARGE    OF    CONTRACT. 

the  crop  planted  and  cultivated  by  him,  but  only  the  right  to  have 
his  advances  repaid  out  of  that  part  of  the  crop  that  might  fall  to 
Riddick's  share  thereof,  on  a  division  between  him  and  the  de- 
fendant. But  Riddick,  by  his  abandonment  of  the  crop  and  his 
failure  to  perform  his  part  of  the  contract,  had  lost  his  interest  in 
and  all  right  to  a  division  of  it.  There  was  then  nothing  left  upon 
which  the  lien  of  Thigpen  could  operate,  and  out  of  which  his  de- 
mand could  be  satisfied.  Riddick's  right  to  a  share  of  the  crop 
having    ceased,    Thigpen's    lien    on    the    share    necessarily    ceased 

with  it. 

Every  person  making  agricultural  advancements  to  a  cropper 
must  rely  in  a  great  measure  upon  his  good  faith  in  carrying  out 
his  contract  with  his  landlord,  for  he  must  know  that  the  cropper 
has  it  in  his  power  to  desert  his  crop  and  leave  it  uncultivated, 
and  therefore,  in  taking  the  lien  he  knowingly  assumes  the  risk. 

Aside  from  this  view  of  the  law,  the  justice  of  the  case  is  with 
the  defendant.  Upon  the  abandonment  of  the  crop  by  the  cropper 
he  informed  the  plaintiff,  who,  as  assignee,  stood  in  the  shoes  of 
him  who  made  the  advances  and  told  him  to  go  on  and  make  the 
crop,  which  he  refused  to  do,  and  threw  the  trouble  and  burden 
of  finishing  it  upon  the  defendant,  who  expressly  advised  him,  if 
he  did  so,  he  should  not  have  one  cent. 

Our  conclusion  is  there  was  error.  The  judgment  of  the  Supe- 
rior Court  is  therefore  reversed,  and  a  venire  de  novo  awarded. 

(245)  SMITH  v.  LUMBER  CO., 

142  N.  C,  26,  54  S.  E.,  788,  5  L.  R.  A.   (N.  S.),  439-1906. 

The  plaintiff  sued  for  $150,  upon  a  contract  of  service.  On 
February  5,  defendant  employed  plaintiff  for  four  months  at  $75 
a  month;  at  the  end  of  the  first  month  he  paid  the  plaintiff  for 
the  month's  work,  and  discharged  him  without  cause.  The  plain- 
tiff tried  to  get  other  work  for  the  three  months,  but  failed. 
Plaintiff  sued  on  the  5th  of  May  for  the  second  month's  wages, 
and  recovered  judgment ;  and  now  sues  for  the  other  two  months' 
wages.     Judgment  for  plaintiff,  and  defendant  appealed. 

Walker,  J.  (After  holding  that  since  the  plaintiff's  term  of 
service  began  on  February  5,  the  third  month  ended  on  May  4, 
the  salary  for  the  third  month  would  be  included  in  the  judgment 
rendered  in  the  action  brought  on  May  5,  for  the  second  install- 
ment, proceeds.) 

The  defendant  also  contended  that  the  plaintiff  could  not  sue  on 
the  successive  installments  as  they  fell  due,  but  must  sue  on  a 
quantum  meruit  or  for  damages  for  the  breach  of  the  contract, 
and  that  his  recovery  for  the  one  installment  was  a  complete  sat- 


BY    BREACH.  599 

isfaction  of  all  damages  arising  from  the  breach  of  the  contract, 
as  his  recovery  in  either  of  the  other  two  forms  of  action  would 
have  been.     We  do  not  assent  to  this  proposition  in  its  entirety. 
Numerous  and  well-considered  authorities  hold,  in  accordance  with 
what  we  consider  the  correct  principle  and  the  better  reason,  that 
when  the  contract  is  entire  and  the  services  are  to  be  paid  for  by 
installments   at    stated   intervals,   the   servant   or   employe    who    is 
wrongfully  discharged  has  the  election  of  four  remedies:     1.  He 
may  treat  the  contract  as  rescinded  by  the  breach,  and  sue  imme- 
diately on  a  quantum   meruit   for  the  services  performed;  but  in 
this  case  he  can  recover  only  for  the  time  he  actually  served.     2. 
He  may  sue  at  once  for  the  breach,  in  which  case  he  can  recover 
only  his  damages  to  the  time  of  bringing  the  suit.     3.   He  may 
treat  the  contract  as  existing  and  sue  at  each  period  of  payment 
for  the  salary  then  due.     (We  do  not  consider  the  right  to  proper 
deduction  in  this  case,  as  it  is  not  now  presented.)     4.  He  may 
wait  until  the  end  of   the  contract  period  and  then  sue   for  the 
breach,  and  the  measure  of  damages  will  be  prima  facie  the  salary 
for  the  portion  of  the  term  unexpired  when  he  was  discharged,  to 
be  diminished  by  such   sum  as  he  has   actually  earned  or  might 
have  earned  by  a  reasonable   effort  to   obtain  other   employment. 
The  rule  as  thus  stated  is  supported  by  the  great  weight  of  au- 
thority:     14  A.  &  E.  Enc.    (1   Ed.),  797;  20  Ibid.    (2  Ed.),  36 
et  seq.;  and  it  is  clearly  recognized  and  adopted  by  this  court  in 
Markham  v.   Markham,   110  N.   C,  356.     The  difficulty  in  estab- 
lishing the  right  to  sue  upon  the  contract   for  the  whole  amount 
of  the  wages  originated  in  the  doctrine  of  "constructive  service." 
The  law,  in  theory  at  least,  required  that  the  servant  wrongfully 
dismissed  before  the  expiration  of  his  term  must  keep  himself  in 
readiness  at  all  times  to  perform  the  required  service,  and  an  aver- 
ment that  he  had  done  so  was  necessary  in  an  action  on  the  con- 
tract for  a  breach.     By  a  fiction  of  law  his  constant  readiness  to 
perform  was  considered  equivalent  to  actual  service,  so  as  to  en- 
able him  to  recover  the  full  amount  of  the  wages,  the  same  as  if 
the  service  had  been  actually  performed,  and  it  was  so  construed 
by  the  courts.     But  this  principle  was  inconsistent  with  the  rule 
as  to  the  measure  of  damages,  which  permitted  the  master  to  show 
in  diminution  of  the  servant's  recovery  for  wages  that  the  latter 
either   obtained   or  could   have   obtained   other   employment,   inas- 
much as  to  be  always  strictly  ready  he  must  be  always  idle.     The 
two  requirements  of  the  law  could  not  reasonably  and  logically  co- 
exist, and  for  this  reason  the  doctrine  of  constructive  service,  first 
asserted  by  Lord  Ellenborough  in  Oandell  v.  Pontigney,  4  Camp., 
375,  was  repudiated  in  later  cases  and  the  servant's  remedy  was 
restricted  to  either  a  quantum  meruit  (if  he  elected  to  rescind  the 


600  DISCHARGE    OF    CONTRACT. 

contract)  or  an  action  for  the  damages  resulting  from  the  breach, 
and  his  right  to  an  action  for  the  wages,  treating  the  contract  as 
constructively  performed  was  denied.  Goodman  v.  Peacock,  15 
Q.  B.,  74;  Cutter  v.  Powell,  2  Smith  L.  C,  1245;  20  A.  &  E. 
Enc,  40.  This  court  recognized  the  doctrine  of  constructive  serv- 
ice in  Hendrickson  v.  Anderson,  50  N.  C,  246,  and  Brinkley  v. 
Swicegood,  65  N.  C,  626,  to  the  extent  of  expressly  asserting  the 
right  of  the  servant  to  recover  the  full  amount  of  the  wages  for 
the  unexpired  portion  of  the  term,  provided  his  action  is  brought 
after  the  end  of  the  term,  even  though  there  had  been  no  actual 
service  during  that  time.  ...  He  could  not  recover  these  dam- 
ages before  the  expiration  of  his  term  because  of  the  other  rule, 
that  the  master  is  entitled  to  diminish  them  by  the  amount  he  may 
or  could  have  received  from  other  employment,  which  can  not  be 
determined  until  the  full  period  is  at  an  end.  (The  court  granted 
a  new  trial  unless  the  plaintiff  would  remit  the  amount  for  the 
third  month,  which  was  held  to  be  included  in  the  former  judg- 
ment.) 

In  addition  to  the  cases  cited  above,  see  Harris  v.  Separk,  71—372;  Old- 
ham v.  Kerchner.  79—106 ;  6  R.  C.  L.,  1023 ;  Mord.  &  Mc.  Rem.,  549 ;  20  Am. 
&  Eng.  Encyc,  24,  36,  where  it  is  said  that  the  action  may  be  upon  the 
quantum  meruit,  or  for  breach  of  contract,  and  on  page  40  where  the  "con- 
structive service  rule"  is  discussed  and  Markham  v.  Markham  cited  as  an 
instance,  while  the  weight  of  authority  is  given  the  other  way.  As  to  measure 
of  recovery,  it  seems  to  be  governed  by  the  contract  price.  Hobbs  v.  Rid- 
dick,  50—80;  Jones  v.  Mial,  89—89;  but  see  U.  S.  v.  Behan,  110  U.  S.,  338; 
30  L.  R.  A.,  33,  and  note ;  27  L.  R.  A.,  409.  See  also  cases  under  next  sec- 
tion and  under  entire  and  divisible  contracts,  post;  15  Am.  &  Eng.  Encyc, 
1087;  20  Ibid.,  30;  9  Cyc,  688. 

3.    Impossibility  created  by  act  of  one  of  the  parties. 

(246)  BUFFKIN  v.  BAIRD, 

73  N.  C,  283—1875. 

The  plaintiff  claiming  one-fourth  interest  in  certain  lands,  of- 
fered to  sell  the  same  to  the  defendants,  but  defendants  not  being 
willing  to  buy  so  small  an  interest,  said  they  would  buy  as  much 
as  three-fourths  if  plaintiff  could  get  it.  The  plaintiff  bound  him- 
self in  writing  to  get  a  good  title  to  three-fourths  interest  in  the 
land  for  the  defendants,  within  100  days,  for  $3,300;  and  the  de- 
fendants bound  themselves  to  take  the  said  interest  at  that  price 
and  within  that  time.  The  plaintiff  proceeded  at  once  to  try  to 
get  the  title,  employing  counsel  and  incurring  other  expense,  but 
stopped  all  attempts  when  he  learned  that  the  defendants  within  a 
few  days  after  the  contract  had  actually  purchased  the  one-half 
interest  which  the  plaintiff  was  trying  to  get.  The  defendant  later 
purchased  the  other  half  interest,  paying  for  the  whole  $2,000. 


BY    BREACH.  601 

The  plaintiff  sued  for  violation  of  the  contract,  and  alleged  that 
he  was  entitled  to  the  difference  between  what  defendants  were  to 
pay  him  for  the  land  and  what  they  actually  paid  for  it.  Upon  a 
verdict  there  was  a  judgment  for  the  plaintiff  for  $1,800,  and  de- 
fendants appealed. 

Rodman,  J.  The  two  writings  executed  by  the  plaintiff  and  the 
defendants,  respectively,  formed  a  single  contract,  by  which  the 
plaintiff  was  bound  to  convey  to  the  defendants  a  good  title  to 
three-fourths  of  the  Sawyer  land  within  one  hundred  days,  and 
the  defendants  were  bound  on  receiving  such  title  to  pay  the  plain- 
tiff $3,300. 

[The  court  then  shows  that  the  question  of  fraud  or  mistake  is 
not  material  to  the  case.] 

Is  it  clear  that  the  conveyance  of  a  good  title  to  three-fourths  of 
the  land  by  plaintiff,  or  a  tender  of  a  conveyance,  was  a  condition 
precedent  to  the  liability  of  the  defendants  to  pay  him  the  sum 
stipulated  for?  If  a  person  contracts  to  do  a  certain  entire  act, 
for  which  he  is  to  receive  a  certain  sum,  he  can  not  recover  the 
price  as  upon  a  complete  performance,  notwithstanding  it  was  pre- 
vented by  inevitable  accident.  Cutter  v.  Powell,  1  Smith  L.  C,  1, 
and  notes ;  Appleby  v.  Myers,  E.  L.  R.,  2  C.  P. ;  Young  v.  Jeffreys, 
20  N.  C,  357;  White  v.  Brown,  47  N.  C,  403;  Brewer  v.  Tysor, 
48  N.  C,  180;  Mizell  v.  Burnett,  49  N.  C,  249;  Niblett  v.  Her- 
ring, lb.,  262;  Dula  v.  Cowles,  52  N.  C,  290. 

The  complaint,  however,  is  not  framed  upon  the  idea  that  the 
plaintiff  is  entitled  to  recover  upon  the  express  contract.  The 
plaintiff  contends  that  there  results  from  the  express  terms  of  the 
contract  a  promise  by  defendants  that  they  will  do  nothing  within 
one  hundred  days  to  prevent  plaintiff  from  performing  his  part  of 
the  contract,  for  the  breach  of  which  he  is  entitled  to  damages.  It 
can  not  be  doubted  that  when  a  party  to  a  contract  (as  the  de- 
fendant in  the  present  case),  by  his  fault  or  wrong,  prevents  the 
other  from  fully  performing  his  part  of  the  contract,  the  party 
thus  in  fault  can  not  be  permitted  to  take  advantage  of  his  own 
wrong  and  screen  himself  from  payment  for  what  has  been  done 
under  the  contract.  2  Pars.  Cont.,  523.  But  the  defendants  in  the 
present  case  do  not  admit  that  by  their  contract  they  restricted 
themselves  from  buying  the  land  in  question  for  any  time  what- 
ever. They  argue  that  it  is  no  more  than  if  they  had  made  a  con- 
tract with  the  plaintiff  for  the  delivery  to  them  of  a  quantity  of 
corn,  within  a  certain  time,  for  a  certain  price,  which  would  not 
prohibit  them  from  offering  a  higher  price  for  other  corn,  although 
the  incidental  effect  might  be  to  raise  the  price,  and  perhaps  throw 
a  loss  on  the  plaintiff.  We  think,  however,  the  cases  are  not  an- 
alogous, and  that  there  was  an  implied  contract  on  the  part  of  the 


602  DISCHARGE    OF    CONTRACT. 

defendants  to  do  nothing  within  the  hundred  days  to  prevent  the 
plaintiff  from  buying  the  land.  This  was  held  in  the  case  of  Mar- 
shall v.  Craig,  1  Bibb  (Ky.),  379.  It  is  clear,  upon  common  sense 
and  numerous  authorities,  that  inasmuch  as  the  defendants  made 
it  impossible  for  the  plaintiff  to  comply  with  his  contract,  they 
discharged  him  from  it,  and  would  not  be  entitled  to  recover  any- 
thing from  him  by  reason  of  his  failure  to  perform.  Com.  Dig., 
condition,  L.,  6. 

We  think  it  follows  from  what  has  been  said  that  the  plaintiff 
is  entitled  to  recover  some  damages  from  the  defendants  by  reason 
of  their  injurious  interference.  We  have  found  it  more  difficult 
to  say  what  should  be  the  measure  of  damages.  This  is  a  question 
of  law,  although  the  jury  must  apply  the  rules  of  law  to  the  facts, 
if  they  be  in  dispute.  His  Honor,  the  judge  below,  was  of  opinion 
that  the  plaintiff  was  entitled  to  recover  the  difference  between 
what  defendants  actually  paid  for  three-fourths  of  the  land  and 
what  they  had  agreed  to  pay  plaintiff  for  it,  thus  putting  the  plain- 
tiff in  the  situation  he  would  have  been  in  if,  without  trouble  or 
other  expense,  he  had  bought  within  the  hundred  days,  at  the  price 
at  which  defendants  bought. 

Expressions  may  be  found  in  the  text-books  to  the  effect  that  if 
one  party  be  prevented  from  performing  his  contract  by  the  act  or 
default  of  the  other,  he  is  in  the  same  condition  as  if  he  had  per- 
formed it.  But  an  examination  of  the  cases  (so  far  as  I  have  been 
able  to  examine  them)  will  show  that  this  doctrine  applies  only: 

1.  To  protect  the  party  failing  to  perform  from  an  action  by 
the  party  preventing  him. 

2.  Perhaps,  also,  in  cases  where  the  plaintiff  has  agreed  to  do 
work  or  furnish  materials  which  defendant  has  prevented  being 
fully  done,  and  the  like  cases  in  which  it  was  certain  that  but  for 
the  unlawful  act  or  default  of  the  defendant  the  contract  could 
have  been  performed,  and  the  labor  and  expense  of  the  plaintiff  in 
performing  it  could  be  calculated  from  certain  data,  and  conse- 
quently his  profits  upon  performance,  which  may  thus  not  unjustly 
be  made  the  measure  of  damages.  Masterton  v.  Mayor  of  Brook- 
lyn, 7  Hill  (N.  Y.),  61;  Sedgwick  Dam.,  223;  Bingham  v.  Rich- 
ardson, 60  N.  C,  215. 

3.  And  to  cases  in  which  the  plaintiff  has  substantially,  al- 
though not  literallv,  performed  his  contract,  as  in  Ashcraft  v.  Al- 
len, 26  N.  C,  96. 

Whatever  may  be  said  of  such  cases,  we  think  that  this  rule  will 
not  apply  to  a  case  like  the  present.  It  is  impossible  to  say  with 
certainty  that  the  plaintiff  would  or  could  have  bought  the  land  at 
the  price  at  which  defendants  bought  it,  and  within  the  time  al- 
lowed him  ;  and  also  what  would  have  been  his  expense  and  labor 


BY    BREACH.  603 

in  doing  so.  The  owners  might  have  refused  to  sell  at  all,  or  re- 
fused except  at  a  price  greater  than  the  plaintiff  was  to  receive,  or 
might  have  died  before  selling,  in  which  case  the  contract  by  its 
terms  was  to  have  no  effect.  The  damage  would  have  to  be  calcu- 
lated as  under  the  conditions  existing  at  the  time  of  the  breach  of 
defendants'  contract,  and  the  success  of  the  plaintiff  at  that  time 
was  subject  to  contingencies  which  did  not  admit  of  a  certain  cal- 
culation. His  anticipated  profits  were  merely  precarious  and  spec- 
ulative, and  it  can  not  be  said  with  certainty  that  he  has  sustained 
any  damage  beyond  the  value  of  his  labor  and  expenses.  To  give 
to  the  plaintiff  the  full  benefit  of  the  defendants'  purchase,  as  if 
made  by  the  plaintiff,  would  be  to  give  him  the  benefit  of  the  de- 
fendants' labor,  skill  and  good  fortune  without  exertion  on  his  part. 
It  may  be  useful,  too,  to  observe  what  damages  the  defendants 
could  have  recovered  of  the  plaintiff  in  case  he  had  failed  to  pro- 
cure a  title  without  the  excuse  of  an  act  of  theirs.  They  could  not 
have  recovered  the  difference  between  what  they  were  to  pay  the 
plaintiff  and  any  greater  price  which  they  might  have  paid.  The 
authorities  are  that  where  a  vendee  has  paid  nothing,  he  can,  in 
general,  recover  nominal  damages  only,  upon  an  inability  in  the 
vendor  to  make  title.  Sedgwick  Damages,  183 ;  Flurean  v.  Thorn- 
hill,  2  W.  BL,  1078;  Worthington  v.  Warrington,  8  Man.  Gr.  &  S., 
133;  Hopkins  v.  Grazebrook,  6  Barn.  &  Cres.,  31;  Robinson  v. 
Harmon,  1  Ex.,  850;  Allen  v.  Anderson,  2  Bibb.,  415.  Nichols  v. 
Freeman,  33  N.  C.,  99,  does  not  resemble  the  case  supposed. 

In  the  present  case  the  plaintiff  is  entitled  to  recover  for  his 
labor  and  expense  in  endeavoring  to  perform  his  contract,  as  upon 
a  quantum  meruit.  Such,  we  think,  is  the  rule  established  by  the 
modern  authorities.     2  Pars.  Cont.,  523. 

In  Planche  v.  Colburn,  8  Bing.,  14,  the  plaintiff  had  agreed  to 
write  a  treatise  on  ancient  armor,  to  be  published  by  defendants  in 
a  serial  publication  called  the  Juvenile  Library.  Defendants  were 
to  pay  plaintiff  100  pounds  for  the  work.  The  plaintiff  had  pre- 
pared about  one-half  his  work,  and  had  incurred  some  expense, 
when  defendant  abandoned  his  serial  publication,  and  refused  to 
receive  the  treatise  of  the  plaintiff,  or  to  pay  him  any  part  of  the 
compensation.  It  was  held  that  the  plaintiff  was  entitled  to  re- 
cover, not  the  price  of  the  treatise  as  if  he  had  completed  it,  but 
upon  a  quantum  meruit  for  the  labor  he  had  done,  which  the  jury 
had  found  to  be  50  pounds. 

Similar  in  principle  to  this  are  the  numerous  cases  which  hold 
that  where  a  plaintiff  who  has  been  employed  for  a  year,  at  a 
yearly  sum,  has  been  wrongfully  dismissed  during  the  year,  he 
can  not  recover  the  whole  year's  wages,  as  if  he  had  served  during 
the  whole  year,  but  only  for  the  service  actually  performed,  and  in 


604  DISCHARGE    OF    CONTRACT. 

some  cases  with  an  addition  of  damages  by  reason  of  inability  to 
find  other  employment.  The  statement  doubtingly  made  in  Smith's 
notes  to  Cutter  v.  Powell,  1  Smith  L>  C,  1,  that  perhaps  a  servant 
wrongfully  dismissed  might  wait  until  the  end  of  the  year  and 
recover  as  upon  a  constructive  service,  has  not  been  approved  in 
England  or  in  the  United  States.  Goodman  v.  Pocock,  15  Ad.  & 
El.  (2B.),  576;  Ellerton  v.  Emmons,  6  Man.  Gr.  &  S.,  178  (60 
E.  C.  L.  R.)  ;  Woodley  v.  Bond,  66  N.  C,  397;  Alges  v.  Alges,  10 
Serg.  &  Rawle,  225.  In  this  last  case  the  language  of  Gibson,  J., 
is  so  terse  as  to  deserve  quoting: 

"Here  the  plaintiff  below  claimed  to  recover  for  the  whole  time 
for  which  he  had  been  employed,  on  the  ground  that  an  act  the 
performance  of  which  has  been  prevented  by  the  person  for  whose 
benefit  it  was  to  be  performed,  shall,  as  to  him,  be  taken  to  have 
been  actually  performed.  This  holds  so  far  as  to  give  an  action 
on  the  contract  where  actual  performance  would  otherwise  have 
been  a  condition  precedent,  but  not  to  create  an  implied  promise 
to  compensate  the  party  as  if  the  act  were  actually  performed." 
See,  also,  Perkins  v.  Hart,  11  Wheat.,  237.  There  was  error  in 
the  instruction  of  His  Honor. 

Per  Curiam.  Venire  de  novo. 

See  note  to  preceding  case.  Where  A  agreed  to  support  B  for  certain 
land  conveyed  to  him,  and  was  prevented  from  doing  so  by  the  heirs  of  B  ; 
A  was  discharged  from  such  performance,  and  the  heirs  of  B  could  not 
afterwards  claim  the  land  for  such  nonperformance.  Harwood  v.  Shoe,  141 — 
161.  See  in  addition  to  the  cases  cited  above,  McMahan  v.  Miller,  82 — 317; 
Winstead  v.  Reid,  44—76;  Harris  v.  Wright,  118—422;  Nav.  Co.  v.  Wilcox, 
52—481;  Whitlock  v.  Lumber  Co.,  145—120;  15  Am.  &  Eng.  Encyc,  1090; 
Oldham  v.  Kerchner,  79—106;  28  Am.  Rep.,  302;  9  Cyc,  639;  1  Parson's 
Cont.  (9  Ed.),  581;  Conservatory  v.  Dickinson,  158—207;  Parker  v.  Macom- 
ber,  17  R.  I.,  674,  24  AtL,  464,  16  L.  R.  A.,  858;  6  R.  C.  L.,  1012,  1020. 

Sec.  2.    Failure  of  performance. 

1.    Entire  contracts. 

(247)  BREWER  v.  TYSOR, 

48  X.  C,  180—1855. 

Action  of  assumpsit.  The  plaintiff  declared  on  special  contract 
and  also  for  work  and  labor  done.  The  plaintiff  agreed  in  writing 
to  make  a  race  three  feet  deep  and  four  feet  wide,  between  certain 
points,  within  five  months,  for  $250.  There  was  evidence  of  a 
subsequent  modification  of  the  contract,  giving  the  plaintiff  the 
option  to  make  the  race,  or  to  cut  it  part  of  the  way  and  build  a 
dam.  The  plaintiff  did  not  cut  the  race  according  to  the  specifica- 
tions, in  that  it  was  not  three  feet  deep,  and  only  laid  the  founda- 
tion  of  the  dam,  and  then   abandoned   the  work.      The   defendant 


BY    BREACH.  605 

did  some  more  work  on  the  race  and  built  the  dam  and  used  it. 
He  had  paid  the  plaintiff  $140,  and  plaintiff  sued  for  the  balance 
due  or  for  the  value  of  the  work  done.  There  was  a  judgment 
for  plaintiff,  and  defendant  appealed. 

Nash,  C.  J.  The  contract  is  a  special  one,  executory  in  its 
character  and  entire.  It  is  admitted  that  the  plaintiffs  can  not  re- 
cover on  the  special  count ;  neither  can  they  on  the  merits  of  the 
case  on  the  quantum  meruit.  The  contract  being  an  entire  one, 
performance  on  the  part  of  the  plaintiffs  was  a  condition  prece- 
dent, necessary  to  be  averred  in  the  declaration,  and  proved  as 
averred,  unless  the  other  contracting  parties  have  discharged  them 
from  the  performance.  If  the  plaintiffs  do  not  aver  performance, 
or  a  readiness  to  perform,  they  can  recover,  neither  on  the  special 
contract,  nor  on  the  quantum  meruit.  Winstead  v.  Reid,  44  N. 
C,  76;  Cutter  v.  Powell,  6  T.  R.,  320;  White  v.  Brown,  47  N. 
C,  403.  The  contract  in  this  case  was,  that  the  race  should  be 
completed  in  five  months  after  the  date  of  the  contract,  of  a 
certain  length,  depth  and  breadth.  A  portion  only  of  the  race  was 
cut;  and,  after  working  three  months,  the  plaintiffs  abandoned  the 
work,  and  it  was  completed  by  the  defendant.  Here,  time  was  of 
the  essence  of  the  contract,  and  the  plaintiffs  failed  to  bring  them- 
selves within  it.  It  is  said  the  plaintiffs  were  sick  most  of  the 
time,  and  are,  therefore,  to  be  excused,  under  the  maxim,  actus 
Dei  nemini  facit  injuria m \;  but  the  sickness  of  the  plaintiff  did  not 
render  it  impossible  for  them  to  execute  the  contract,  as  they 
might  and  ought  to  have  procured  the  work  to  be  done. 

It  is  again  said  that  the  defendants  received  the  work  as  it  had 
been  executed,  and,  therefore,  they  are  bound  under  the  second 
count.  The  reply  is,  that  the  work  which  the  plaintiffs  had  con- 
tracted to  do  was  necessary  to  the  enjoyment,  by  the  defendants, 
of  the  property  to  which  it  was  appurtenant,  to  wit,  the  mill ;  that 
the  defendants  were  obliged  to  use  that  portion  of  the  race  dug  by 
the  plaintiffs,  in  order  to  put  their  mill  into  operation ;  it  could  not 
be  removed,  nor  could  it  be  cut  in  any  other  place,  to  answer  the 
purpose  for  which  it  was  intended.  If  such  was  the  fact,  it  was 
incumbent  on  the  plaintiffs  to  have  shown  it.  We  do  not  think 
that  case  comes  within  the  principle,  that  where  there  is  a  special 
contract  for  work  to  be  done,  and  it  is  done,  but  not  in  accordance 
with  the  contract,  and  is  received  by  the  person  for  whom  it  is 
executed,  he  shall  pay,  not  on  the  special  contract,  but  on  a  quan- 
tum meruit.  Here  the  work  was  but  partially  done  and  the  plain- 
tiffs abandoned  it  before  completion.  As  to  the  conversation  be- 
tween the  parties,  at  the  time  demand  of  payment  was  made,  it 
can,  in  no  sense,  sustain  the  second  count  in  the  declaration. 
There  was,  on  the  part  of  the  defendants,  an  express  denial  of  any 


606  DISCHARGE    OF    CONTRACT. 

liability;  for  they  asserted  that  they  had  paid  the  plaintiffs  more 

than  their  work  was  worth.     There  was,  in  fact,  no  acceptance  by 

the  defendants  of  the  work  done.     There  was  error  in  the  charge. 

Per  Curiam.    Judgment  reversed,  and  a  venire  de  novo  awarded. 

See  Thiepen  v.  Lee,  supra,  and  note;  other  cases  to  same  effect  not  cited 
above  Dover  v.  Plemmons,  32—23;  Lane  v.  Phillips,  51—455;  Russell  v. 
Stewart,  64—487;  Kelly  v.  Oliver,  113 — 442 ;  Dula  v.  Cowles,  47—544;  49— 
519-  52—290;  75  A.  D.,  463;  Cuthbert  v.  Kuhn,  3  Wharton,  357,  31  A.  D., 
513 '•  Bentley  v.  Edwards,  123  Minn.,  179,  146  N.  W.,  347,  51  L.  R.  A.  (N.  S.), 
254 ;  Huyett  &  Smith  Co.  v.  Chic.  Edison  Co.,  167  111.,  233,  59  A.  S.  R.,  272 ; 
Leopold  v.  Salkey,  89  Til.,  412,  31  A.  R.,  100;  6  R.  C.  L.,  972,  974.  A  contract 
to  support  one  for  land  conveyed  is  an  entire  contract,  Andres  v.  Andres, 
122—352;  Tussey  v.  Owen,  139—457.  In  Gorman  v.  Bellamy,  82--496.  it  is 
said  the  courts  are  inclined  to  relax  the  common  law  rule  and  allow  a  re- 
covery for  benefits  conferred.  In  Brewer  v.  Tysor,  before  the  court  again 
in  50—173,  the  facts  showed  a  severable  contract  and  the  plaintiff  could  re- 
cover for  the  part  performed. 

(248)   CHAMBLEE  v.  BAKER, 

95  N.  C,  98—1886. 

Action  on  quantum  meruit  for  services  rendered.  Plaintiff  was 
hired  by  defendant  in  February,  to  work  on  the  farm  for  the  bal- 
ance of  the  year  at  $10  a  month,  the  contract  to  be  an  entire  one 
for  the  remainder  of  the  year.  He  worked  until  September,  and 
left  without  excuse,  and  defendant  sustained  no  damage  by  his 
leaving.  His  work  amounted  to  $70,  and  he  had  been  paid  $20. 
There  was  a  judgment  for  plaintiff,  and  defendant  appealed. 

Smith,  C.  J.  The  appellant  insists  that  the  contract  being 
special,  for  labor  for  the  entire  residue  of  the  year,  though  the 
compensation  is  measured  by  months,  that  the  plaintiff  having  left 
before  the  expiration  of  the  time  "without  legal  excuse,"  can  not 
recover  for  the  partial  service  performed. 

The  general  rule  is  thus  laid  down,  and  is  sustained  by  numer- 
ous adjudications,  cited  in  the  American  Editor's  Notes  to  the  case 
of  Cutter  v.  Powell,  2  Smith's  Leading  Cases,  1  :  "But  if  there 
has  been  an  entire  executory  contract,  and  the  plaintiff  has  per- 
formed a  part  of  it,  and  then  wilfully  refuses,  without  legal  excuse, 
and  against  the  defendant's  consent,  to  perform  the  rest,  he  can 
recover  nothing,  either  in  general  or  special  assumpsit." 

The  same  rule  has  been  repeatedly  recognized  and  acted  on  in 
this  court,  the  more  recent  cases,  wherein  reference  to  others  may 
be  found,  being  Thigpen  v.  Leigh,  93  N.  C,  47,  and  Hester  v. 
Lawrence,  Ibid.,  79. 

Tndeed,  so  stringent  was  the  former  practice,  that  in  an  action 
upon  a  special  contract  to  pay  for  services  to  be  rendered,  and 
which  were  rendered,  no  evidence  in  defense  or  to  reduce  the  re- 
covery, was  admissible  to  prove  inattention,  neglect,  wasted  time 


BY    BREACH. 


607 


or  other  misconduct  of  the  plaintiff,  and  dereliction  in  the  under- 
taken duty,  and  the  defendant  was  driven  to  a  separate  action  for 
redress.    Hobbs  v.  Riddick,  50  N.  C,  80. 

It  is  otherwise  under  the  present  system,  and  the  entire  dispute, 
involving  opposing  demands,  is  now  adjudged  in  a  single  suit. 
This  is  some  relaxation  of  the  doctrine  regarding  special  contracts, 
and  the  enforcement  of  the  obligations  they  create. 

The  manifest  injustice  upon  such  technical  grounds,  of  refusing 
all  compensation  for  work  done  and  not  completed,  or  for  goods 
supplied  short  of  the  stipulated  quantity,  and  of  allowing  the  party 
to  appropriate  them  to  his  own  use,  without  paying  anything,  has 
been  often  felt  and  expressed  by  the  judges,  and  a  mode  sought 
by  which  the  wrong  could  be  remedied. 

The  mischief  is  adverted  to  by  this  court  in  Gorman  v.  Bellamy, 
82  N.  C,  496,  when  referring  to  the  cases  of  Dumott  v.  Jones,  23 
How.  (U.  S.),  220,  and  Monroe  v.  Phillips,  8  Ellis  &  Black,  739, 
this  language  is  used:  "The  inclination  of  the  courts  is  to  relax 
the  stringent  rule  of  the  common  law,  which  allows  no  recovery 
upon  a  special  unperformed  contract,  nor  for  the  value  of  the 
work  done,  because  the  special,  excludes  an  implied  contract  to 
pay.  In  such  case,  if  the  party  has  derived  any  benefit  from  the 
labor  done,  it  would  be  unjust  to  allow  him  to  retain  that  without 
paying  anything.  Accordingly,  restrictions  are  imposed  upon  the 
general  rule,  and  it  is  confined  to  contracts  entire  and  indivisible, 
and  when  by  the  nature  of  the  agreement,  or  by  express  provision, 
nothing  is  to  be  paid  till  all  is  performed." 

If,  by  the  terms  of  the  agreement,  certain  sums  are  due  on  per- 
formance of  certain  parts  of  the  work,  thus  severing  the  consid- 
eration, separate  actions  are  maintainable  for  each.  And  in  the 
construction  of  the  agreement,  the  court  will  be  guided  by  a  re- 
spect to  general  convenience  and  equity,  and  the  reasonableness  of 
the  particular  case. 

Thus,  the  modified  rule  has  been  declared  to  be,  that  though 
the  consideration  and  contract  be  entire  by  the  apparent  terms  of 
the  agreement,  yet  such  may  be  the  circumstances,  as  to  entitle 
the  plaintiff  to  a  ratable  compensation  for  part  performance. 

So,  the  inference  that  the  compensation  is  payable  in  install- 
ments at  certain  periods,  as  weekly  or  monthly,  according  to  the 
service,  unless  there  is  a  clear  and  distinct  understanding  that 
compensation,  as  a  unity,  is  demandable  only  at  the  expiration  of 
the  full  period  of  service. 

These  views  are  presented  in  the  able  discussion  in  the  note 
from  which  we  have  extracted  a  part,  and  rest  upon  a  series  of 
adjudications  cited. 

In  our  case,  the  plaintiff's  wages  are  measured  by  monthly  sums, 


608  DISCHARGE    OF    CONTRACT. 

and  for  two  months  of  his  work  he  has  received  full  compensation. 
This  indicates  an  understanding  between  the  parties  that  the  wages 
were  to  be  paid  as  the  work  progressed,  and  the  plaintiff's  neces- 
sities may  have  required,  that  he  should  not  be  delayed  until  the 
end  of  the  year. 

The  defendant  loses  nothing  by  the  plaintiff's  leaving,  nor  is  it 
stated  that  the  departure  was  against  the  defendant's  will.  Under 
these  circumstances,  and  to  avoid  manifest  injustice,  we  hold  the 
ruling  to  be  right  and  that  there  is  no  error.  The  judgment  must 
be  affirmed. 

No  error.  Affirmed. 

The  distinction  in  the  above  cases  shows  the  difference  between  special 
contract  and  implied  contract.  The  law  presumes  a  promise  only  when  it 
does  not  appear  that  there  is  any  special  agreement  between  the  parties.  For 
if  there  is  a  special  contract  which  is  still  open  and  unrescinded,  embracing 
the  same  subject-matter  with  the  common  counts,  the  plaintiff,  though  he 
should  fail  to  prove  his  case  under  the  special  count,  will  not  be  permitted 
to  recover  upon  the  common  counts.  Lawrence  v.  Hester,  93 — p.  81 ;  Carter 
v.  McNeely,  23—448;  Dula  v.  Cowles,  47—454,  and  52—290;  Winstead  v. 
Reid,  44—76;  White  v.  Brown,  47—403;  Brewer  v.  Tysor,  48—180;  Niblett 
v.  Herring,  49—262;  Russell  v.  Stewart,  64 — 487;  Ducker  v.  Cochrane,  92— 
597;  Thigpen  v.  Leigh,  93—47;  Wall  v.  Williams,  93—327;  Lindsay  v.  Ins. 
Co.,  115—212;  Wilmington  v.  Bryan,  141— p.  672.  In  Chamblee  v.  Baker,  95— 
98,  the  distinction  is  limited  to  special  contracts  which  are  entire  and  indivis- 
ible, and  this  has  been  approved  in  Booth  v.  Ratcliffe,  107 — 6 ;  Wooten  v. 
Walters,  110—251;  Markham  v.  Markham,  110—356;  Coal  Co.  v.  Ice  Co., 
134—579;  Tussey  v.  Owen,  139—457;  Willis  v.  Construction  Co.,  152—100; 
Jones  v.  Sandlin.  160—150;  Pullen  v.  Green,  75—215;  Raby  v.  Cozad,  164— 
287 ;  Timberlake  v.  Thayer,  24  L.  R.  A.,  234. 

Under  the  Code  practice  an  action  may  be  brought  on  a  special  contract  and 
recovery  had  on  an  implied  contract  if  the  facts  alleged  are  sufficient.  Jones 
v.  Mial,  82—252;  Lewis  v.  R.  R,  95—179;  Stokes  v.  Taylor,  104—394;  Fulps 
v.  Mock,  108—601;  Roberts  v.  Woodworking  Co.,  111—432;  Spence  v.  Cotton 
Mills,  115—210;  Grady  v.  Wilson,  115-344;  Webb  v.  Hicks,  116—598;  Sams 
v.  Price,  119—572;  Burton  v.  Mfg.  Co.,  132—17;  Parker  v.  Express  Co.,  132— 
128;  Wright  v.  Insurance  Co.,  138—488. 

Where  an  action  is  brought  on  an  express  contract  for  work  done,  recov- 
ery may  be  had  on  the  implied  contract,  if  the  defendant  has  accepted  and 
used  the  work.  Dixon  v.  Gravely,  117—84;  Moffitt  v.  Glass,  117—142;  Simp- 
son v.  R.  R.,  112—703;  McPhail  v.  Comrs.,  119—330;  Byerly  v.  Kepley,  46— 
35;  Dover  v.  Plemmons,  32 — 23;  Morrison  v.  Mining  Co.,  143—250;  Corinth- 
ian Lodge  v.  Smith,  147—244;  Haywood  v.  Leonard,  7  Pick.,  181,  19  A.  D., 
268;  Britton  v.  Turner,  6  N.  H.,  481,  26  A.  D.,  713;  6  R.  C.  L.,  973.  But 
when  the  work  is  not  done  at  the  request  of  the  defendant  and  he  does  not 
accept  and  take  the  benefit  of  it,  he  is  not  liable.  Foy  v.  Craven,  111 — 129. 
In  Penny  v.  Fort,  122 — 230,  there  was  an  express  and  an  implied  contract, 
with  separate  items  in  each. 


BY    BREACH.  609 

2.    Divisible  contracts. 

(249)   WOOTEN  v.  WALTERS, 
110  X.  C,  251.  14  S.  E,  734,  736—1892. 

The  plaintiff  and  defendant  made  an  oral  agreement  to  ex- 
change property.  The  plaintiff  agreed  to  let  defendant  have  his 
storehouse  and  lot  and  his  stock  of  goods,  fixing  the  price  of  each 
separately,  for  the  defendant's  interest  in  an  oil  mill.  The  ex- 
change was  made,  the  plaintiff  taking  charge  of  the  mill,  and  the 
defendant  taking  the  storehouse  and  the  goods.  In  about  two 
weeks  plaintiff  notified  defendant  that  he  would  not  complete  the 
trade,  demanded  the  return  of  the  storehouse  and  stock  of  goods, 
and  offered  to  return  the  mill.  Defendant  refused  to  exchange 
again,  and  this  action  was  brought.  A  referee  found  the  facts, 
and  as  a  conclusion  of  law  that  the  contract  of  the  plaintiff  was 
entire.  The  judge  below  "adjudged  that  the  contract  was  divisi- 
ble," and  rendered  judgment  that  the  plaintiff  recover  the  store- 
house and  lot,  that  the  defendant  retain  the  goods,  and  recover  of 
the  plaintiff  $971.32,  the  amount   found  due  by  the  referee. 

The  plaintiff  excepted  and  appealed. 

Merrimon,  C.  J.  A  contract  is  entire,  and  not  severable,  when 
by  its  terms,  nature  and  purpose  it  contemplates  and  intends  that 
each  and  all  of  its  parts,  material  provisions  and  the  consideration, 
are  common  each  to  the  other  and  interdependent.  Such  a  con- 
tract possesses  essential  oneness  in  all  material  respects.  The  con- 
sideration of  it  is  entire  on  both  sides.  Hence,  where  there  is  a 
contract  to  pay  a  gross  sum  of  money  for  a  certain  definite  con- 
sideration, it  is  entire,  and  not  severable  or  apportionable  in  law 
or  equity.  Thus,  where  a  particular  thing  is  sold  for  a  definite 
price,  the  contract  is  an  entirety  and  the  purchaser  will  be  liable 
for  the  entire  sum  agreed  to  be  paid.  And  so  also,  when  two  or 
more  things  are  sold  together  for  a  gross  sum,  the  contract  is  not 
severable.  The  seller  is  bound  to  deliver  the  whole  of  the  things 
sold,  and  the  buyer  to  pay  the  whole  price,  in  the  absence  of  fraud. 
Hence,  it  has  been  held  that  where  a  cow  and  four  hundred 
pound  of  hay  were  sold  for  $17  the  contract  was  entire.  Mr.  Jus- 
tice Story  says  that  "the  principle  upon  which  this  rule  is  founded, 
seems  to  be  that  as  the  contract  is  founded  upon  a  consideration 
dependent  upon  the  entire  performance  thereof,  if  for  any  cause 
it  be  not  wholly  performed  the  casus  foederis  does  not  arise,  and 
the  law  will  not  make  provision  for  exigencies  against  which  the 
parties  have  neglected  to  fortify  themselves."  Such  contracts  are 
enforceable  only  as  a  whole. 

On  the  other  hand,  a  several  contract  is  one  in  its  nature  and 


610  DISCHARGE    OF    CONTRACT. 

purpose  susceptible  of  division  and  apportionment,  having  two  or 
more  parts,  in  respect  to  matters  and  things  contemplated  and  em- 
braced by  it,  not  necessarily  dependent  upon  each  other,  nor  is  it 
intended  by  the  parties  that  they  shall  be.  Hence,  an  action  may 
be  maintained  for  a  breach  of  it  in  one  respect  and  not  necessarily 
in  another,  or  for  several  breaches,  while  in  other  material  re- 
spects it  remains  intact.  In  such  a  contract  the  consideration  is  not 
single  and  entire  as  to  all  its  several  provisions  as  a  whole;  until 
it  is  performed  it  is  capable  of  division  and  apportionment.  Thus, 
though  a  number  of  things  be  brought  together  without  fixing  an 
entire  price  for  the  whole,  but  the  price  of  each  article  is  to  be 
ascertained  by  a  rate  or  measure  as  to  several  articles,  or  when  the 
things  being  of  different  kinds,  though  a  total  price  is  named,  but 
a  certain  price  is  fixed  for  each  thing,  the  contract  in  such  cases 
may  be  treated  as  a  separate  contract  for  each  article,  although 
they  all  be  included  in  one  instrument  of  conveyance,  or  by  one 
contract.  Thus  where  a  party  purchased  two  parcels  of  real  es- 
tate, the  one  for  a  specified  price  and  the  other  for  a  fixed  price, 
and  took  one  conveyance  of  both,  and  he  was  afterwards  ejected 
from  one  of  them  by  reason  of  defect  of  title,  it  was  held  that  he 
was  entitled  to  recover  therefor  from  the  vendor.  Johnson  v. 
Johnson,  3  Bos.  &  Pul.,  162 ;  Minor  v.  Bradley,  22  Pick.,  459.  So 
also  it  was  held  where  a  certain  farm  and  dead  stock  and  grow- 
ing wheat  were  all  sold  together,  but  a  separate  price  was  affixed 
to  each  of  these  things,  it  was  held  that  the  contract  was  entire  as 
to  each  item  and  was  severable  into  three  contracts,  and  hence  a 
failure  to  comply  with  the  contract  as  to  one  item  did  not  inval- 
idate the  sale  and  give  the  vendor  a  right  to  reject  the  whole  con- 
tract. In  such  case  the  contract  may  be  entire  or  several,  accord- 
ing to  the  circumstances  of  each  particular  case  and  the  criterion 
is  to  be  found  in  the  question  whether  the  whole  quantity — all  of 
the  things  as  a  whole — is  of  the  essence  of  the  contract.  If  it  ap- 
pear that  the  purpose  was  to  take  the  whole  or  none,  then  the 
contract  would  be  entire ;  otherwise,  it  would  be  severable.  It  is 
sometimes  difficult  to  determine  whether  the  contract  is  entire  or 
severable  in  such  cases,  and  there  is  great  diversity  of  decisions 
on  the  subject,  "but  on  the  whole,  the  weight  of  opinion  and  the 
more  reasonable  rule  would  seem  to  be  that  where  there  is  a  pur- 
chase of  different  articles  at  different  prices  at  the  same  time,  the 
contract  would  be  severable  as  to  each  article,  unless  the  taking 
ot  the  whole  was  rendered  essential  either  by  the  nature  of  the 
subject-matter  or  by  the  act  of  the  parties."  This  rule  makes  the 
interpretation  of  the  contract  depend  on  the  intention  of  the  par- 
ties  as  manifested  by  their  acts  and  the  circumstances  of  each  par- 
ticular case.     Brewer  v.  Tysor,  48 — 180:  Niblett  v.  Herring,  49 — 


BY    BREACH.  611 

262;  Brewer  v.  Tysor,  50—173;  Dula  v.  Cowles,  52—290;  Jarrett 
v.  Self,  90 — 478;  Chamblee  v.  Baker,  95—98;  Lawing  v.  Rintles, 
97 — 35O;  Pioneer  Mfg.  Co.  v.  Assurance  Co.,  110—176;  Story  on 
Cont.,  sees.  21,  25;  3  Par.  Cont.,  187;  Wharton  Cont.,  sees.  338, 

511,  748. 

Applying  the  rules  of  law  thus  stated  to  the  case  before  us,  we 
are  of  the  opinion  that  the  contract  to  be  interpreted  treated  as  ex- 
ecutory, is  severable  and  the  sale  of  the  goods  therein  mentioned 
was  not  necessarily  an  inseparable  part  of  the  land  embraced  by 
this  contract.     Although  it  is  single,  it  embraces  the  sale  of  two 
distinct  things,  each  having  a  certain  price  affixed  to  it,  and  the 
price    paid    for    the    whole    being    susceptible    of    apportionment. 
Neither  by  the  terms  of  the  contract  settled  by  the  findings  of  fact, 
nor  by  its  nature  and  purpose,  does  it  appear  that  the  storehouse 
lot  of  land  and  stock  of  goods,  distinct  things,  were  both  neces- 
sary parts  of  an  entire  contract.     These  things  were  not  necessary 
parts  of  each  other;  they  were  entirely  capable  of  being  sold  sep- 
arately.    Nor  does  it  appear  that  they  were  sold  as  a  single  whole. 
On  the  contrary,  they  were  spoken  of  and  treated  as  different  sub- 
jects of  sale,  a  specified  price  was  affixed  to  the  land,  and  a  dis- 
tinct definite  price  affixed  to  the  goods.     Wherefore  this  distinc- 
tion?    Why  was  the  price  fixed  as  to  the  separate  and   distinct 
subjects  of  sale?     As  we  have  seen,  the  two  things  were  not  nec- 
essary to  each  other,  and  nothing  was  said  or  done  by  the  parties, 
nor  does  anything  appear  to  show  that  the  party  would  not  have 
made  the  contract  unless  it  embraced  both  the  sale  of  the  land  and 
the  stock  of  goods.     The  sale  of  the  stock  of  goods  was  not  part 
or  parcel  of  the  sale  of  the  land  nor  dependent  upon  it ;  although 
the  sale  of  both  was  made  at  the  same  time  and  embraced  by  the 
same   contract,    severable    in    its    nature    and    purpose,    they    were 
treated  as  distinct  subjects  of  sale,  the  price  of  each  being  defi- 
nitely fixed.     The  mere  fact  that  the  plaintiff  was  about  to  change 
the  character  of  his  business,  did  not  imply  that  the  storehouses 
and  the  land  on  which  they  were  situate  must  be  sold  with  the 
goods,  else  the  goods  would  not  be  sold.     Such  things  are  valuable 
to  let   for   rent.     There  is   an   absence  of   anything  that  shows   a 
purpose  to   sell  the  two  things  as  an  inseparable  whole.     When, 
therefore,  the  plaintiff  avoided  the  contract,  not  reduced  to  writ- 
ing as  to  the  land,  as  he  might  do  under  the  statute  pertinent,  he 
did  not  avoid  the  contract  as  to  the  stock  of  goods;  the  contract 
was   severable,   and  as  to   the  goods   was  valid  and   remained  of 
force  and  continued  to  have  effect. 

It  seems  that  really  the  contract  was  executed  as  to  the  goods, 
and  the  sale  might  on  that  ground  be  upheld  without  reference  to 


612  DISCHARGE    OF    CONTRACT. 

the  ineffectual  sale  of  the  land,  but  no  question  in  that  aspect  of 
the  case  was  raised.  Affirmed. 

In  Keel  v.  Construction  Co.,  143—429,  there  was  a  contract  to  build  a 
house,  the  work  to  be  paid  for  in  installments  as  the  work  progressed,  and 
the  house  was  destroyed  before  it  was  completed  ;  the  contract  was  held  to 
be  divisible.  Compare  Lawing  v.  Rintels,  97—350,  post,  261.  A  policy  of 
insurance  is  a  single  contract,  but  divisible  in  regard  to  the  articles  insured. 
.Mfg.  Co.  v.  Assurance  Co.,  110—176;  but  see  Coggins  v.  Ins.  Co.,  144—7. 
Hiring  slaves  at  $25  a  month,  to  keep  them  during  the  year  unless  the  owner 
is  dissatisfied,  is  divisible.  Johnson  v.  Dunn,  51—122.  Renting  a  storehouse 
and  lot  at  $40  and  part  of  the  crop,  is  indivisible.  Reynolds  v.  Taylor,  144— 
165.  Emnlovment  at  $1,800  a  year,  which  is  paid  for  by  the  month,  is  divisi- 
ble Fd wards  v  R  R.,  121—490.  For  the  same  distinction  as  made  above, 
7    \m.  &  Eng.  Encvc.  95.  96.  97,  150;  Clark  Cont.,  453;  53  L.  R.  A.,  828;  9 

Cvc,  648. 

Installments.— Where  the  contract  is  for  property  to  be  delivered  in 
installments,  there  is  a  difference  of  opinion  as  to  whether  a  failure  in  one 
instance  discharges  the  contract  or  only  gives  a  claim  for  damages. _  See 
discussion  in  Clark  Cont.,  454.  citing  Hoare  v.  Rennie,  5  Hurl.  &  X.,  19, 
Simpson  v.  Crippin.  L.  R.  8,  Q.  B.  14,  for  the  two  views  in  England,  and 
Xorrington  v.  Wright,  115  U.  S.,  188,  for  the  majority  view,  that  it  is  a 
discharge.  The  question  is  one  of  construction  in  ascertaining  the  intention 
of  the  parties.  See  Hassard-Short  v.  Hardison.  114—482;  117—60;  Johnson 
v.  Dunn.  51—122.  In  Grocery  Co.  v.  Bag  Co.,  142— p.  184.  it  is  said:  "Al- 
though performance  to  a  certain  extent  is  divisible,  yet  if  the  default  in  one 
item  of  a  continuous  contract  is  accompanied  with  an  announcement  of  an 
intention  by  the  party  thus  in  default  not  to  perform  it  upon  the  agreed 
terms,  the  "other  party  may  treat  the  contract  as  being  at  an  end.  And  he 
may  likewise  do  so,  if  it  appear  that  the  failure  to  perform  is  deliberate  and 
intentional,  and  not  the  result  of  mere  inadvertence  or  inability  to  perform." 
Citing  9  I've,  649,  and  numerous  cases;  see  also  3  Page  Cont.,  sees.  1489- 
1493;  30  L.  R.  A..  33;  57  L.  R.  A..  225;  Quarton  v.  Am.  Law  Book  Co.,  143 
Iowa,  517,  121  X.  W.,  1009,  32  L.  R.  A.  (X.  S.),  1;  Henningsen  v.  Tonopah 
R.  Co.,  33  Xev..  208.  Ill  Pac,  36,  119  Pac,  774,  Ann.  Cas.,  1913  D,  1008; 
Willis  v.  Construction  Co..  152—100:  Steamboat  Co.  v.  Transportation  Co., 
166—582;  6  R.  C.  L.,  972. 

3.    Independent  and  dependent  promises. 
1.    ABSOLUTE. 

(250)   McGRAW  v.  GILMER,  Admr., 

83  X.  C.  162—1880. 

Claim  and  delivery  proceedings  for  a  cow.  The  defendant's  in- 
testate,  a  lawyer,  wrote  to  plaintiff:  "If  you  will  send  me  the  cow 
I  will  save  you  $18,  in  settlement  of  the  case  against  your  son." 
The  plaintiff  sent  the  cow,  and  defendant's  intestate  died  before 
performing  the  service  promised,  and  his  estate  was  insolvent. 
Plaintiff  brought  this  action  to  recover  the  cow.  There  was  a 
judgmenl    for  the  plaintiff,  and  defendant  appealed. 

A.SHE,  J-  This  court  can  not  take  into  consideration  the  insol- 
vency of  the  defendant.  The  sole  question  is,  did  the  title  to  the 
cow    pass  absolutely  to  the  defendant's  intestate  with  the  delivery 


BY    BREACH. 


613 


of  her  to  him,  or  was  the  sale  conditional,  and  did  the  title  remain 
in  the  vendor. 

There  is  error  in  the  judgment  of  the  court  below.  We  are  un- 
able to  discover  the  conditional  character  of  the  transaction.  It 
is  an  absolute  unconditional  sale  of  the  cow.  The  defendant  says 
to  the  plaintiff,  send  me  your  cow  and  I  will  perform  for  you  cer- 
tain services.  The  cow  is  sent,  is  delivered  upon  this  contract  into 
the  actual  possession  of  the  defendant's  intestate.  There  is  no 
more  condition  in  this  sale  than  in  the  ordinary  sale  of  a  chattel 
on  a  credit ;  as  where  one  buys  a  horse  and  promises  to  pay  the 
price  at  a  future  day,  and  the  horse  upon  the  faith  of  the  promise 
is  at  once  delivered  into  the  possession  of  the  vendee,  it  never  has 
been  contended  that  on  failure  of  the  vendee  to  pay  on  the  day 
agreed  upon,  that  the  vendor  could  retake  the  horse  or  maintain  an 
action  for  it,  for  it  is  well  settled  in  such  a  case  that  by  the  deliv- 
ery of  the  horse  into  the  actual  possesion  of  the  vendee,  the  title 
of'  the  vendor  is  gone  and  the  horse  has  become  the  property  of 
the  vendee,  and  the  vendor  has  agreed  to  take  for  it  the  vendee's 
promise  to  pay  the  price.  So  that  if  the  vendee  fail  to  pay  at 
the  time  agreed,  the  vendor's  remedy  is  limited  to  an  action  for  the 
breach  of  that  promise,  the  damages  for  the  breach  being  the 
amount  of  the  price  promised  with  interest.  Benj.  on  Sales,  622, 
625. 

There  is  error.     The  judgment  in  the  court  below  is  reversed. 

Where  A  made  a  valid  promise  to  deliver  property  at  a  certain  place 
within  a  certain  time,  and  it  does  not  appear  that  B,  the  other  party  had 
anvthing  to  do  on  his  part.  A's  promise  is  absolute,  and  he  must  comply  or 
attempt  to  do  so  whether  B  is  at  the  place  or  not.  Cowper  v.  Sanders,  15— 
283.  Where  the  performance  of  one  promise  does  not  depend  upon  the  per- 
formance of  the  other,  but  onlv  upon  the  promise,  it  is  absolute.  Clark 
Cont.,  450.  See  Burns  v.  McGregor,  90—222;  9  Cyc,  642.  In  a  contract  of 
sale  where  the  vendor  has  done  all  that  he  was  required  to  do,  the  promise 
of  the  vendee  is  absolute,  and  in  case  of  destruction  of  the  property  the  loss 
will  fall  on  him.  Whitlock  v.  Lumber  Co.,  145—120,  and  cases  cited ;  Tufts 
v  Griffin,  107 — 47.  For  dependent  and  independent  covenants,  see  Crampton 
v.  McLaughlin  Realtv  Co.,  51  Wash..  525.  99  Pac,  586.  21  L.  R.  A.  (X.  S.L 
823:  Paine  v.  Brown.  37  X.  Y..  228. 

2.    CONDITIONAL. 

(1)    Condition  subsequent,  ante    (230). 

(2)   Conditions  concurrent. 

(251)  GRANDY  v.  McCLEESE, 

47  X.  C,  142,  64  A.  D.,  574—1855.      . 

Action  of  assumpsit  for  nondelivery  of  a  quantity  of  corn.  The 
defendant  had  a  large  quantity  of  corn  to  sell  and  asked  the  plain- 
tiff 60  cents  a  bushel  for  it ;  plaintiff  offered  58  cents,  and  defend- 


514  DISCHARGE    OF    CONTRACT. 

ant  said  "You  can  send  for  it."  Plaintiff  sent  a  vessel  for  it,  but 
did  not  send  the  money  to  pay  for  it  or  say  anything  about  paying 
for  it  though  he  had  made  arrangements  with  a  bank  to  get  the 
money  Defendant  did  not  know  about  his  not  sending  the  money 
or  his  having  made  any  arrangement,  but  denied  the  contract  and 
refused  to  deliver  the  corn,  because  the  price  had  gone  up.  There 
was  a  judgment  for  plaintiff,  and  defendant  appealed. 

Battle,  J.     The  contract  proved  by  the  testimony   was   simply 
an  executory  one  for  the  sale  of  a  quantity  of  corn  at  a  stipulated 
price ;  the  legal  effect  of  it  was  to  bind  the  parties  to  the  perform- 
ance of  concurrent  acts.     The  plaintiff  was  to  send  for  the  corn 
and  to  pay  for  it  on  delivery;  and  the  defendant  was  to  deliver 
upon   receiving   payment.      Neither   could   demand   a   performance 
by  the  other,  without  the  allegation  and  proof  of  his  own  readiness 
and  ability  to  perform  his  part  of  the  agreement.     2  Blk.   Com., 
447;  Cowper  v.  Saunders,  15  N.  C,  283;  Cole  v.  Hester,  31   N. 
C,   23.     The   plaintiff,   then,   could    not    sustain   his    action    for   a 
breach  of  the  contract  by  the  defendant,  without  showing  that  he 
himself  had  paid  or  tendered  the  price  of  the  corn,  or  was  ready 
'  and  able  to  do  so,  or  that  the  defendant  had  done  something  to 
discharge  him  from  that  duty.     It  is  contended  by  his  counsel  that 
the  denial  of  the  contract  by  the  defendant  was  a  breach  of   it, 
and  dispensed  with  proof  on  the  part  of  the  plaintiff  that  he  had 
paid,  or  tendered  the  money,  or  had  it  ready  to  be  paid  or  ten- 
dered at  the  time  when  he  demanded  the  corn  ;  and  such  was  the 
charge  of  His  Honor  to  the  jury  in  the  court  below.     We  do  not 
concur  in  that  opinion,  in  the  extent  to  which  it  was  carried ;  we 
admit  that  the  conduct  of  the  defendant  dispensed  with  the  obli- 
gation on  the  part  of  the  plaintiff  to  pay  the  money,  or  even  to 
tender  it ;  but  it  did  not  relieve  him  from  the  necessity  of  having 
it  ready  to  be  paid  or  tendered.     Abrams  v.  Suttles,  44  N.  C,  99. 
Until  he  had  provided  the  means  to  pay  for  the  corn  upon  deliv- 
ery, be  had  not  put  himself  in  a  situation  in  which  he  had  a  right 
to  demand  it.     There  was  no  testimony  to  show  that  it  was  to  be 
paid  for  at  any  other  time,  or  place,  than  that  when  and  where  it 
was  to  be  delivered  ;  the  arrangement  made  by  the  plaintiff  with 
the  cashier  of  the  Farmers'  Bank  at  Elizabeth  City  for  procuring 
the  money  with  which  to  pay  for  the  corn,  could  not  have  availed 
him,  had  it   been  made  known  to  the  defendant,  and  of  course  it 
can  not   aid  him  when  it   was  never  communicated  to  the  defend- 
ant.    There  was  error  in  the  instruction  given  by  the  court  to  the 
jurv  for  which  there  must  be  a  venire  de  novo. 

To  the  same  effeel  are  Grandy  v.  Small,  48—8;  50—50;  Hurlbut  v.  Simp- 
son, 25  233;  Hughes  v.  Knott.  138—105:  Hendricks  v.  Furn.  Co..  156—569; 
Wildes  v.  Nelson,  154—590. 


BY    BREACH. 


615 


Mutual  dependent  conditions  must  be  performed  or  readiness  shown  as  a 
condition  to  bringing  suit.  Lutz  v.  Thompson,  87—334;  Jones  v.  Mial,  82— 
252;  79—164;  Braswell  v.  Pope,  82—57;  Hughes  v.  Knott,  138— lCb ;  140- 
550  Payment  of  money  and  delivery  of  goods  concurrent.  Gardner  v. 
King  24—297;  Christian  v.  Nixon,  33—1;  Walker  v.  Allen,  50—58;  Hardy  v. 
McKesson,  51—554;  52—567;  Sydnor  v.  Boyd,  119—481.  So  where  goods 
were  sold  on  condition  that  notes  should  be  given  for  the  price,  the  passing 
of  the  title  to  the  goods  and  the  delivery  of  the  notes  are  concurrent.  Mill- 
hiser  v.  Erdman,  98—292;  103—27.  When  a  note  and  security  are  to  be  given 
for  the  goods,  payable  in  the  future,  and  the  purchaser  fails  to  comply  with 
this  action  mav  be  brought  at  once  for  such  failure.  McRae  v.  Morrison, 
35_46;  Copeland  v.  Fowler,  151—353;  Mord.  &  Mel.  Rem.,  671. 

(3)    Condition  precedent. 

(252)    CLAYTON   v.  BLAKE, 

26  X.  C,  497—1844. 

Action  of  debt  upon  a  contract  for  building  a  house.  Plaintiff 
agreed  to  build  a  house  for  the  defendant  according  to  specifica- 
tions given,  in  a  neat  and  workmanlike  manner,  and  completed  by 
the  1st  day  of  April,  1842.  The  defendant  was  to  pay  $1,000  on 
the  1st  day  of  December,  and  the  balance,  $2,500,  when  the  house 
was  completed.  The  $1,000  was  paid,  but  the  plaintiff  did  not 
complete  the  house  until  about  the  1st  day  of  June.  There  was  a 
judgment  for  the  plaintiff,  and  defendant  appealed. 

Daniel,  J.     The  plaintiff  has  brought  an  action  of  debt  upon 
the  deed  set  forth  in  the  case,  to  recover  $3,500,  the  price  of  build- 
ing a  house  for  the  defendant.    The  first  installment  of  $1,000  was 
agreed  to  be  paid  by  the  defendant,  before  the  work  was  to  be  fin- 
ished by  the  plaintiff;  therefore  that  demand  rested  on  an  inde- 
pendent  covenant.      It  has  been   paid  and  there   is   no   dispute  as 
to  that  sum.     The  "balance"    ($2,500)    was  to  be  paid  when  the 
house  should  be  completed.     The  defendant  resisted  the  plaintiff's 
recovery  of  this  last  installment,  on  the  ground  that   he  did  not 
prove  on  the  trial  that  he  had  completed  the  house  within  the  time 
mentioned  in  the  deed,  to  wit,  on  or  before  the  1st  day  of  April, 
1842.     The  court  instructed  the  jury  that  the  covenants  in  the  in- 
denture,  on   this   point,    were   independent,   and   that   the   plaintiff 
was  entitled  to  recover.     The  dependence  or  independence  of  cove- 
nants is  to  be  collected  from  the  evident  sense  and  meaning  of  the 
parties;  and,  however  transposed  they  may  be  in  the   deed,  their 
precedency  must  depend  on  the  order  of  time,  in  which  the  intent 
of  the  transaction  requires  their  performance.     Kingston  v.  Pres- 
ton, cited  in  Jones  v.  Blakeley,  Doug.,  689;  Wills.,  496;  Piatt  on 
Covenants,  79.     Taking  the  above  directions  as  to  the  law  on  the 
subject,  we  must  say  that  the  judge  erred  in  his  charge.     For  we 
collect   the   intention   and   meaning   of   the   parties   to   be   that   the 


616  DISCHARGE    OF    CONTRACT. 

$2,500  was  to  be  paid,  if  the  plaintiff  completed  the  house  by  the 
ls1  day  of  April,  1842;  at  which  time  he  had  covenanted  that  the 
houses  hould  be  completed.  The  word  when  must  have  reference 
to  the  time  antecedently  agreed  upon  by  the  parties  for  the  comple- 
tion of  the  building;  and  that  time  was  the  1st  day  of  April,  1842. 
The  completion  of  the  house  by  the  plaintiff  in  a  workmanlike 
manner  in  the  time  stipulated  in  the  deed  was,  we  think,  a  con- 
dition precedent  to  his  right  by  force  of  his  deed,  to  claim  the 
$2,500.  This  case  is  like  that  of  Glazebrook  v.  Woodrow,  8  Term 
R.,  366,  where  the  plaintiff  covenanted  to  sell  to  the  defendant  a 
schoolhouse,  and  to  convey  the  same  to  him  on  or  before  the  1st 
day  of  August,  1797,  and  to  deliver  up  the  possession  to  him  on 
the  24th  of  June,  1796;  and  in  consideration  thereof  the  defendant 
covenanted  to  pay  to  the  plaintiff  120  pounds,  on  or  before  the  1st 
day  of  August,  1797.  It  was  holden  that  the  covenant  to  convey, 
and  that  for  the  payment  of  the  money,  were  dependent  covenants; 
and  that  the  plaintiff  could  not  maintain  an  action  for  the  120 
pounds,  without  avering  that  he  had  conveyed,  or  tendered  a  con- 
veyance  to  the  defendant.  Although  the  plaintiff  may  be  unable 
to  recover  in  his  action  as  now  framed,  yet  he  may  not  be  without 
remedy  for  such  sum  as  he  ought  to  recover.  For  if  he  has  built 
a  house  for  the  defendant,  which  the  latter  has  accepted  and  used, 
the  plaintiff  will  be  entitled  to  recover  the  just  value  of  his  work 
and  labor,  as  estimated  by  a  jury,  in  a  proper  action. 

Per  Curiam.  New  trial  awarded. 

Sic  Mizell  v.  Burnett,  49 — 249;  Simmons  v.  Cahoon,  68 — 393;  Lutz  v. 
Thompson,  87 — 334.  For  similar  contracts,  see  Lawing  v.  Rintels,  57 — 350; 
Keel  v.  Construction  Co..  143 — 429.  See  also  cases  under  Entire  Contracts. 
supra. 

When  a  slave  was  hired  with  the  understanding  that  he  was  not  to  be 
taken  out  of  the  county  except  at  hirer's  risk,  and  he  was  taken  out  of  the 
count}  and  died,  the  hirer  is  liable.  Bell  v.  Bowen,  46 — 316.  When  goods 
an-  ?old  upon  condition  that  the  freight  is  not  to  exceed  10  percent,  and  the 
fre'eht  does  exceed  thai  amount,  the  buyer  may  refuse  to  receive  them;  hut 
he  should  do  so  at  once  and  notify  the  seller;  if  before  he  gives  such  notice, 
the  seller  reduces  the  freighl  charge,  the  buyer  must  take  the  goods.  For'  es 
v.  Branson,  81 — 256.  Where  \  agreed  to  manufacture  a  certain  quantity  of 
tobacco  for  I'.,  between  the  1st  day  of  May  and  the  15th  day  of  October,  for 
which  B  \va-~  to  pay  1(1  cents  a  pound  and  pay  the  taxes  and  for  the  in- 
dients  used,  and  payment  was  to  he  made  whenever  notice  was  given  that 
Kin  boxes  were  ready  ;  A's  promise  was  not  dependent  uoon  B's  as  a  condi- 
tion Foard  v.  Bessent,  68—223,  Where  A  agreed  to  make  fifty  wdieat  fans 
For  !'•  bj  a  certain  day,  and  1'.  was  to  furnish  the  materials  by  a  certam  dav, 
B's  promise  was  a  condition  precedent.  Dwiggins  v.  Shaw.  28 — 46.  But  in 
an  I   tender  of  a  deed   is  not   a  condition   precedent.     Trogden  v.   Wil- 

liam-. 144     192;   Hardy  v.  Ward.  151—385. 

A  promise  to  paj   $100  for  evidence  to  prove  a  certain  fact  is  not  due  until 

is    produced    in    such   a  way   that   it  can  he  used.     Williams  v. 

Thompson.   48  -363.       \    agreed   to  let    1'.   have  all  he  could   sell   his   land    for 

M.500;   I',  sold  it  on  credit   for  $1,800;  A  would  not  be  required  to  pay 

until   the   monej    was  collected.     Joice   v.    Bohannon,  49 — 364.     A  salesman, 

whose  contract  requires  him  to  report  each  day  and  send  in  his  expense  ac- 


BY    BREACH. 


617 


count  each  week,  violates  his  contract  by  failure  to  do  so.  Johnson  v.  Ma- 
chine Works.  130—441.  A  note  payable  whenever  the  Legislature  shall  pass 
an  act  recognizing  certain  bonds,  depends  upon  this  contingency.  Leak  v. 
Bear,  80—271.  A  bond  payable  whenever  a  suit  pending  is  decided  m  favor 
of  the  plaintiff  is  due  when  the  suit  is  compromised  so  that  the  plaintiff  gets 
a  judgment  Kittrell  v.  Hawkins,  74—412.  A  note  payable  six  months  after 
a  ratification  of  a  treatv  of  peace  between  the  United  States  and  the  C  onfed- 
erate  States,  depends  upon  a  condition  precedent  which  was  not  and  can  not 
be  performed.     McNinch  v.  Ramsay.  66—229. 

In  a  contract  to  saw  lumber  at  a  mill  out  of  logs  to  be  furnished,  the 
furnishing  of  the  logs  is  a  condition  precedent.  Ducker  v.  Cochrane.  92— 
597.  Where  an  application  for  insurance  states  that  no  insurance  shall  be 
in  force  until  payment  of  premium  and  delivery  of  the  policy,  this  is  a  valid 
condition.  Whitley  v.  Ins.  Co.,  71-480;  Barnes  v.  Ins.  Co..  74-22 ;  Ormond 
v  Ins  Co  96—158;  Ross  v.  Ins.  Co..  124— 39o  ;  Ray  v.  Ins.  lo„  126—166; 
Rayburn  v.'  Casualty  Co.,  138—379.  When  one  undertakes  to  serve  another, 
there  is  an  implied  vital  condition  that  he  is  competent  for  the  service,  lyey 
v  Cotton  Mills,  143—189;  but  to  show  incompetency  is  the  duty  of  the  other 
party  Dietrich  v.  Lumber  Co.,  127—25;  McKeithan  v.  Telegraph  Co..  136— 
213 ;"  Eubanks  v.  Alspaugh.  139-520.  Where  A  bought  from  B  300  barrels 
of  rosin  and  paid  for  them,  and  was  to  call  for  them  "within  the  next  week, 
but  failed  to  do  so  :  B  had  more  than  that  amount  on  hand,  and  the  rosin  was 
destroved;  the  loss  would  fall  upon  A,  and  he  could  not  recover  from  B 
for  fa'ilure  to  deliver  the  rosin.  Willard  v.  Perkins,  44—253.  h  or  other 
cases  of  failure  to  comply  with  condition,  see  Corinthian  Lodge  v.  Smith, 
147_244 :  Supply  Co.  v.  Roofing  Co..  160—443;  Leonard  v.  Dyer,  26  Conn 
172  68  A.  D..  382;  Lake  Shore  &  Mich.  R.  Co.  v.  Richards,  152  111..  59.  30 
L.  R.  A.,  33 ;  6  R.  C.  L.,  904. 

(4)    Condition   and  warranty. 

(253)  LEWIS  v.  ROUNTREE, 

78  N.  C,  323—1878. 

Civil  action  for  breach  of  contract.  Plaintiff  bought  from  the 
defendant  517  barrels  of  "strained  rosin"  and  paid  for  the  same; 
these  were  selected  by  the  plaintiff  out  of  a  large  number  of  bar- 
rels belonging  to  the  defendant  at  Wilson,  N.  C. ;  the  inspection 
was  made  by  taking  samples  out  of  about  20  barrels,  and  the  517 
barrels  were  shipped  to  New  York,  the  whole  number  being  repre- 
sented to  correspond  with  the  sample;  upon  inspection  in  New 
York  only  116  barrels  came  up  to  the  description,  and  401  were 
not  strained  rosin.  There  was  no  fraud  on  the  part  of  the  defend- 
ant, for  there  were  more  than  517  barrels  of  strained  rosin  in  the 
lot  from  which  the  517  were  taken.  His  Honor  held  "that  the 
plaintiffs  did  not  get  the  number  of  barrels  of  strained  rosin  be- 
cause of  their  own  mistake,  and  by  reason  of  the  fact  that  suit 
was  brought  11  months  after  the  sale  without  notice  to  the  defend- 
ants of  the  mistake,  or  demand  to  supply  other  rosin  in  place  of 
the  inferior  rosin  which  the  plaintiffs,  relying  upon  their  own 
judgment,  selected  and  carried  off  and  sold,"  the  plaintiffs  were 
not  entitled  to  recover.     The  plaintiffs  appealed. 


618  DISCHARGE    OF    CONTRACT. 

Rodman,  J.  We  think  the  judge  came  to  a  wrong  conclusion. 
The  defendants  agreed  to  deliver  517  barrels  of  strained  rosin, 
which  clearly  amounts  to  a  warranty  that  the  article  which  they 
deliver  is  of  that  specific  description.  It  may  be  called  a  condi- 
tion precedent,  and  so  it  is,  for  the  purpose  that  the  vendee  is  not 
obliged  to  receive  the  article  unless  it  comes  within  the  description. 
But  it  is  more  than  that,  for  it  is  held,  as  will  presently  be  seen, 
that  after  the  vendee  has  received  and  retained  the  articles,  he 
may  recover  damages  if  they  do  not  come  within  the  specified  de- 
scription ;  the  description  must  therefore  be  a  warranty,  or  what 
practically  is  equivalent  to  it.  Benjamin  on  Sales,  sees.  600,  647. 
Of  course,  it  is  not  meant  that  words  of  description  are  always  a 
warranty.  But  the  cases  in  which  it  is  held  have  all  something 
special  to  take  them  out  of  the  rule,  and  to  show  that  in  those 
cases  it  was  not  so  intended. 

That  plaintiffs  had  an  opportunity  to  inspect  the  rosin  before  or 
when  it  was  delivered  and  did  in  fact  select  the  particular  barrels 
out  of  a  large  number,  did  not  amount  to  a  waiver  of  the  warranty 
that  it  should  be  of  the  specific  description.  This  is  reasonable. 
It  is  almost  impossible,  or  at  least  very  difficult,  to  tell  from  any 
inspection  of  a  barrel  of  rosin  short  of  breaking  it  up  into  frag- 
ments, whether  it  contains  dross,  that  is,  chips,  dirt,  etc.,  or  not. 
And  to  break  it  up  makes  it  unfit  for  transportation  and  unmar- 
ketable.    All  the  above  propositions  are  supported  by  authority. 

In  Jones  v.  Just.  L.  R.,  3;  Q.  B.,  197,  Mcllor,  J.,  says:  '"In 
general,  on  the  sale  of  goods  by  a  particular  description,  whether 
the  vendee  is  able  to  inspect  them  or  not,  it  is  an  implied  term 
of  the  contract  that  they  shall  reasonably  answer  such  description, 
and  if  they  do  not,  it  is  unnecessary  to  put  any  other  question  to 
the  jury." 

Tlie  judge  refers  to  the  case  of  Josling  v.  Kings  ford,  C.  B.  N. 
S.,  447  (  106  K.  C.  L.  R.),  in  which  it  is  distinctly  held  that  even 
if  the  vendee  has  an  opportunity  to  examine  the  goods  before  re- 
ceiving them,  yet  if  the  defect  be  not  patent,  he  may  receive  them, 
and  maintain  an  action  upon  the  warranty  that  they  did  not  come 
within  tlie  specific  description.  Examination,  or  what  is  equiva- 
lent, an  opportunity  of  examination,  is  a  waiver  of  any  implied 
warranty  as  to  the  quality  of  the  goods,  but  not  that  they  shall  be 
of  the  specific  description. 

'  >n  the  argument,  Lush.  Q.  C,  for  the  vendor,  who  was  the  de- 
fendant, in  reply  to  a  remark  of  Brie,  J.,  said:  "That  raises  the 
broad  question  which  has  never  yet  been  specifically  decided,  viz., 
whether  upon  a  sale  of  goods  where  the  buyer  has  an  opportunity 
of  inspecting  them,  and  buys,  relying  on  his  own  judgment,  any 
warranty   can   he   implied   either  as   to  quality,   or  as   to  the   thing 


BY    BREACH.  619 

being  that  which  it  is  represented  to  be."  The  decision  was  as 
above  stated.  This  case  is  on  all  fours  with  the  one  before  us, 
and  both  as  to  reasoning,  and  on  a  question  of  this  sort,  as  au- 
thority, must  be  deemed  conclusive.  See  also  Allen  v.  Lake,  18 
Q.  B.,  560;  Benj.  on  Sales,  sec.  600,  note  p.,  sec.  647. 

It  is  said,  however,  that  as  soon  as  plaintiff  discovered  that  a 
part  of  the  rosin  did  not  come  within  the  description  of  strained 
rosin,  which  he  did  after  it  arrived  in  New  York,  he  was  bound  to 
notify  the  defendants  of  the  defect  and  to  offer  to  return  the  rosin 
to  them.  We  think  this  is  answered  by  the  case  of  Poulton  v.  Lat- 
timore,  9  B.  &  C,  259  (17  E.  C.  L.  R.,  373).  In  that  case  Little- 
dale,  J.,  said:  "I  am  of  opinion  that  where  goods  are  warranted, 
the  vendee  is  entitled,  although  he  do  not  return  them  to  the  ven- 
dor, or  give  notice  of  their  defective  quality,  to  bring  an  action  for 
breach  of  the  warranty,"  etc.  It  is  true  in  that  case  the  plaintiff 
declared  upon  a  breach  of  warranty  as  to  quality ;  but  there  can 
be  no  difference  in  principle  between  such  a  warranty,  and  one  as 
to  the  identity  of  the  article.  Benj.  on  Sales,  sees.  897  and  899, 
note  r.  The  only  result  of  a  failure  to  offer  to  return  the  goods, 
or  to  notify  the  vendor  of  their  defective  quality,  is  to  raise  a 
presumption  that  the  complaint  of  the  quality  is  not  well  founded. 
In  this  case  the  plaintiff  had  paid  for  the  goods,  and  the  property 
in  them  had  passed  to  him.  The  defendant  was  under  no  obliga- 
tion to  receive  them  back  and  return  the  price.  The  case  of  Cox 
v.  Long,  69  N.  C,  7,  supports  this  view.  The  plaintiff  had  con- 
tracted and  paid  for  shingles  of  certain  dimensions,  and  had  re- 
ceived and  used  those  delivered  with  knowledge  that  they  did  not 
correspond  to  the  warranty,  without  having  offered  to  return  them ; 
and  it  was  held  that  he  was  entitled  to  recover  damages  for  breach 
of  the  warranty.  We  think  the  judge  erred  in  holding  that  the 
plaintiff  was  not  entitled  to  recover. 

Error.  Judgment  reversed. 

(254)  ERWIN  v.  MAXWELL, 

7  N.  C,  241,  9  A.  D.,  602—1819. 

Assumpsit  on  warranty  in  the  sale  of  a  horse.  Plaintiff  bought 
a  horse  from  defendant,  and  after  they  had  agreed  upon  the  sale 
and  the  money  was  about  to  be  paid,  or  after  it  was  paid,  plaintiff 
asked  defendant  if  the  horse  was  sound,  and  he  said  it  was ;  plain- 
tiff said  that  some  persons  did  not  like  his  eyes,  and  defendant 
said  they  were  good,  for  anything  he  knew  to  the  contrary,  that  he 
had  been  badly  cut  for  the  hooks  ;  plaintiff  alleged  that  the  horse 
was  lame  and  stiff  and  could  not  travel  well.  There  was  a  judg- 
ment of  nonsuit  from  which  plaintiff  appealed. 


620  DISCHARGE    OF    CONTRACT. 

Taylor,  C.  J.  A  few  plain  principles  have  been  established  by 
many  decisions,  on  the  subject  of  warranty,  the  application  of 
which  to  this  will  free  it  from  difficulty.  As  a  warranty  renders 
the  party  subject  to  all  losses  arising  from  a  failure  of  it,  however 
innocent  he  may  be,  much  caution  has  been  exercised  in  courts  of 
law  in  creating  an  obligation  of  such  extent.  Hence,  the  rule  that 
on  the  sale  of  chattels,  there  is  not  any  implied  warranty,  except  as 
to  the  title;  that  to  constitute  a  warranty  it  must  be  express,  and 
will  not  be  implied  by  a  mere  affirmation  of  the  quality  or  kind  of 
the  article  sold,  nor  by  a  mere  affirmation  of  the  value,  nor  where 
the  subject  is  of  dubious  quality,  on  which  common  judgment 
might  be  deceived.  Therefore  when  an  auctioneer,  on  the  sale  of 
pictures,  set  in  the  printed  catalogue  opposite  to  each,  the  name  of 
a  painter,  it  was  determined  not  to  amount  to  a  warranty  of  the 
picture's  being  the  work  of  such  artist.  2  Esp.  Rep.,  572.  In 
every  case  upon  the  sale  of  a  chattel,  where  there  is  neither  a  war- 
ranty nor  deceit,  the  buyer  purchases  at  his  peril.  In  the  case  of 
Chandler  v.  Lopez  ( Cro.  Jac),  it  was  determined  that  for  selling 
a  jewel,  which  was  affirmed  to  be  a  bezoar  stone,  when  it  was  not, 
no  action  lav,  unless  the  defendant  knew  it  was  not  a  bezoar  stone, 
or  had  warranted  it  to  be  one.  And  in  Packinson  v.  Lee  (2  East., 
314),  it  was  decided  that  a  fair,  merchantable  price  did  not  raise 
an  implied  warranty;  that  if  there  be  no  warranty,  and  the  seller 
sell  the  thing  such  as  he  believes  it  to  be,  without  fraud,  he  will 
not  be  liable  for  a  latent  defect.  Lord  Coke  says,  "That  by  the 
civil  law,  every  man  is  bound  to  warrant  the  thing  that  he  selleth, 
albeit  there  be  no  express  warranty;  but  the  common  law  bindeth 
him  not,  unless  there  be  a  warranty  in  deed  or  in  law."  And  Fitz- 
herbert,  in  the  Nat.  Brev.,  94  c,  says,  "That  if  a  man  sell  wine 
that  is  corrupted,  or  a  horse  that  is  diseased,  and  there  be  no  war- 
ranty, it  is  at  the  buyer's  peril,  and  his  eyes  and  his  taste  ought  to 
be  the  judges  in  that  case."  It  appears  from  all  the  authorities 
that  without  a  warranty  by  the  seller,  or  fraud  on  his  part,  the 
buyer  must  stand  to  all  losses  arising  from  latent  defects;  and  a 
contrary  rule  is  nowhere  laid  down.  The  principle,  on  which  the 
common  law  proceeds,  being,  that  the  purchaser  ought  to  apply  his 
attention  to  those  particulars  which  may  be  supposed  to  be  within 
the  reach  of  his  observation  and  judgment,  and  the  vendor  to  com- 
municate those  particulars  and  defects  which  can  not  be  supposed 
to  be  immediately  within  the  reach  of  such  attention.  The  pur- 
chaser  may  always  provide  against  his  own  want  of  vigilance  or 
skill,  by  requiring  the  vendor  to  warrant.  Saying,  when  the  money 
was  paid,  that  the  horse  was  sound,  did  not  amount  to  a  warranty, 
to  make  an  affirmation  at  the  time  of  the  sale,  a  warranty,  it  must 
appear  by  the  evidence  to  be  so  intended,  and  not  to  have  been  a 


BY    BREACH.  621 

mere  matter  of  judgment  and  opinion.  3  Term  Rep.,  57.  Carth., 
90;  Salk.,  210.  Here  the  plaintiff  seemed  content  with  the  asser- 
tion of  the  defendant  as  to  the  soundness  of  the  horse,  though  he 
had  heen  previously  advised  to  take  a  warranty.  If,  then,  the  de- 
fendant asserted  only  what  he  believed,  and  the  contrary  does  not 
appear;  and  the  plaintiff  chose  to  run  the  risk  of  being  able  to 
prove  that  the  defendant  knew  of  the  unsoundness,  when  he  might 
have  procured  an  indemnity,  with  or  without  that  knowledge,  there 
is  neither  hardship  nor  injustice  in  throwing  the  loss  on  him.  The 
nonsuit  must,  therefore,  stand,  and  the  rule  for  a  new  trial  be  dis- 
charged. 

(255)   GIFFORD  v.  BETTS, 

64  X.  C.  62—1870. 

Action  of  assumpsit.  Plaintiff  bought  flour  of  defendant  at  $40 
a  barrel;  part  of  it  was  inferior,  and  plaintiff  notified  defendant 
to  take  it  and  return  the  money,  or  he  would  sell  it  at  auction  and 
charge  him  with  the  difference ;  defendant  did  not  reply,  and  plain- 
tiff sold  the  flour  for  $20  a  barrel  and  sued  for  the  difference  and 
expenses.  There  was  a  judgment  for  plaintiff,  and  defendant  ap- 
pealed. 

Dick,  J.  The  plaintiff  bought,  and  paid  for,  three  hundred  and 
forty-five  barrels  of  flour,  which  were  to  be  delivered  to  him  by 
the  defendant,  at  Charlotte.  At  the  time  of  the  sale  the  defendant 
expressly  "stipulated  that  the  whole  of  the  flour  should  be  of  the 
quality  known  to  the  merchants  as  extra,  and  superfine."  This 
stipulation  amounted  to  an  express  warranty  of  the  quality  of  the 
flour.  The  whole  quantity  reached  Charlotte  in  due  time,  but  upon 
inspection,  sixty-six  barrels  proved  to  be  of  inferior  quality.  The 
plaintiff  might  have  brought  an  action  at  once,  founded  upon  this 
breach  of  warranty,  without  an  offer  to  return  the  goods  to  the 
defendant,  or  giving  him  notice  of  his  breach  of  warranty.  Chit, 
on  Con.,  458;  2  Saund.  PI.  &  Ev„  916. 

The  plaintiff,  however,  preferred  to  notify  the  defendant  imme- 
diately that  the  inferior  flour  was  not  accepted  in  discharge  of  the 
contract.  As  the  defendant  declined  to  remove  the  goods  which 
were  not  of  the  quality  warranted,  and  pay  back  the  purchase 
money,  the  plaintiff  had  a  right  to  sell  them  in  a  reasonable  time, 
and  recover  from  the  defendant  on  the  special  contract  the  loss 
upon  the  resale,  and  all  proper  expenses,  so  as  fully  to  reimburse 
himself  for  the  money  expended,  but  not  for  the  loss  of  a  good 
bargain.     1  Pars.  Cont.,  475. 

Per  Curiam.  Judgment  affirmed. 


622  DISCHARGE    OF    CONTRACT. 


(256)  ASHFORD  v.  SHRADER  CO., 

167  N.  C,  45,  83  S.  E.,  29-1914. 

This  was  an  action  for  the  recovery  of  damages  for  an  alleged 
breach  of  an  implied  warranty  in  the  sale  of  oranges.  The  con- 
tract was  to  sell  600  boxes  of  oranges  at  a  price  fixed,  without 
further  description,  and  the  right  was  given  to  the  plaintiffs,  the 
purchasers,  to  inspect.  The  plaintiffs  exercised  ordinary  care  in 
the  inspection  of  the  oranges,  when  they  arrived,  did  not  discover 
any  defect,  paid  the  purchase  money,  and  afterwards  found  that 
one-third  of  them  were  rotten  and  unfit  for  sale.  The  defendant 
excepted  to  the  charge  of  the  court  that  there  was  an  implied  war- 
ranty that  the  oranges  should  be  salable,  and  also  to  the  charge  as 
to  the  duty  of  the  plaintiffs  to  inspect.  There  was  a  judgment  for 
plaintiffs,  and  defendant  appealed. 

Allen,  J.  The  maxim  of  the  civil  law  is  caveat  venditor,  while 
the  maxim  of  the  common  law  is  caveat  emptor,  and  it  is  generally 
held,  in  courts  where  the  common  law  is  administered,  that  in 
contracts  for  the  sale  of  personal  property,  as  between  dealers, 
there  is  no  implied  warranty  as  to  quality.  Farrell  v.  Market  Co., 
198  Mass.,  271,  84  N.  E.,  481,  15  L.  R.  A.  (N.  S.),  884,  and  cases 
in  note,  126  Am.  St.  Rep.,  436,  15  Ann.  Cas.,  1076;  Shingle  Co.  v. 
Mill  Co.,  52  Wash.,  620,  101  Pac,  233,  35  L.  R.  A.  (N.  S.),  261, 
and  note ;  Tiffany  on  Sales,  252 ;  35  Cyc,  397 ;  Dickson  v.  Jordan, 
33  N.  C,  166,  53  Am.  Dec,  1403;  Woodridge  v.  Brown,  149  N. 
C,  302,  62  S.  E.,  1076.  This  rule  has  not  been  stated  more  clearly 
or  with  greater  strictness  anywhere  than  in  the  two  cases  cited 
from  our  own  reports. 

In  the  first  of  these,  Pearson,  J.,  speaking  for  the  court,  says : 

"It  is  a  principle  of  the  common  law  that  no  warranty  of  quality 
is  implied  in  the  sale  of  goods.  Caveat  emptor.  In  the  absence  of 
fraud,  if  the  article  proves  to  be  of  bad  quality,  the  purchaser  has 
no  redress,  unless  he  has  taken  the  precaution  to  require  a  war- 
ranty. This  rule  is  founded  in  wisdom;  and  its  practical  good 
sense  is  so  well  fitted  to  the  habits  of  our  trading  people,  that  we 
are  disposed  to  adhere  to  it.  We  believe  it  is  adopted  in  almost 
all  of  the  States  of  the  Union,  where  the  common  law  prevails," 

and  this  is  quoted  and  approved  in  the  latter  case. 

It  seems  thai  the  exceptions  to  this  rule  are:  (1)  Where  the 
sale  is  for  a  particular  purpose ;  (2)  by  sample;  (3)  by  particular 
description,  or  where  it  is  sold  by  the  manufacturer  or  producer. 
35  Cyc,  399. 

Mon^  with  this  principle  as  to  implied  warranties  is  another  of 
equal    importance   and    prominence,  and   that   is   that   the   seller   is 


BY    BREACH.  623 

held   to   the   duty   of    furnishing  property   in   compliance   with   the 
contract  of  sale  that  is,  at  least,  merchantable  or  salable. 

In  the  case  of  Randall  v.  Newson,  2  Q.  B.,   109,  after  quoting 
from  Best,  C.  J.,  in  Jones  v.  Bright,  5  Bing.,  30,  that : 

"If  a  man  sells  an  article  he  thereby  warants  that  it  is  merchant- 
able, and  that  it  is  fit  for  some  purpose.  If  he  sells  it  for  that 
particular  purpose,  he  thereby  warrants  it  fit  for  that  purpose. 
Whether  or  not  an  article  has  been  sold  for  a  particular  purpose 
is,  indeed,  a  question  of  fact ;  but  if  sold  for  such  purpose,  the 
sale  is  an  undertaking  that  it  is  fit.  The  law  then  resolves  itself 
into  this:  That  if  a  man  sells  generally,  he  undertakes  that  the 
article  sold  is  fit  for  some  purpose;  if  he  sells  it  for  a  particular 
purpose,  he  undertakes  that  it  shall  be  fit  for  that  particular  pur- 
pose." 
— and  after  commenting  on  other  English  cases,  Brett,  J.,  for  the 

court  says : 

"I  have  cited  these  cases  and  the  principles  laid  down  in  them 
in  order  clearly  to  ascertain  what  is  the  primary  or  ultimate  rule 
from  which  the  rules  which  have  been  applied  to  contracts  of  pur- 
chase and  sale  of  somewhat  different  kinds  have  been  deduced. 
Those  different  rules,  as  applied  to  such  different  contracts,  are 
carefully  enumerated  and  recognized  in  Jones  v.  Just.  In  some 
contracts  the  undertaking  of  the  seller  is  said  to  be  only  that  the 
articles  shall  be  merchantable ;  in  others  that  it  shall  be  reasonably 
fit  for  the  purpose  to  which  it  is  applied.  In  all,  it  seems  to  us,  it 
is  either  assumed  or  expressly  stated  that  the  fundamental  under- 
taking is  that  the  article  offered  or  delivered  shall  answer  the  de- 
scription of  it  contained  in  the  contract.  That  rule  comprises  all 
the  others ;  they  are  adaptations  of  it  to  particular  kinds  of  con- 
tracts of  purchase  and  sale.  You  must,  therefore,  first  determine 
from  the  words  used,  or  the  circumstances,  what,  in  or  according 
to  the  contract,  is  the  real  mercantile  or  business  description  of  the 
thing  which  is  the  subject-matter  of  the  bargain  of  purchase  or 
sale,  or,  in  other  words,  the  contract.  If  that  subject-matter  be 
merely  the  commercial  article  or  commodity,  the  undertaking  is 
that  the  thing  offered  or  delivered  shall  answer  that  description, 
that  is  to  say,  shall  be  that  article  or  commodity,  salable  or  mer- 
chantable." 

This  authority  has  been  followed  in  Jones  v.  Just,  3  Q.  B.,  199 ; 
Grieb  v.  Cole,  60  Mich..  397.  27  N.  W.,  579,  1  Am.  St.  Rep.,  536; 
Howard  v.  Hoev,  23  Wend.  (N.  Y.),  350,  35  Am.  Dec,  572;  Peck 
v.  Armstrong,  38  Barb.  (N.  Y.),  218;  Warner  v.  Ice  Co.,  74  Me., 
478 ;  Fitch  v.  Archibald,  29  N.  J.  Law,  164 ;  Merriam  v.  Field,  39 
Wis..  580;  Hansen  v.  Brewing  Co.,  70  111.  App.,  265;  and  in  our 
own  reports  in  Main  v.  Field,  144  N.  C,  311,  56  N.  E.,  943,  11 


624  DISCHARGE    OF    CONTRACT. 

L    R    A.    (N.  S.),  245,  119  Am.  St.  Rep.,  956;  Medicine  Co.  v. 
Davenport,  163  N.  C,  296,  79  S.  E.,  603. 

In  the  last  case  Justice  Walker' quotes  with  approval  from  Ben- 
jamin on  Sales  and  from  the  English  cases,  as  follows: 

•'•If  a  man  sell  an  article,  he  thereby  warrants  that  it  is  mer- 
chantable; that  is,  that  it  is  fit  for  some  purpose.  If  he  sells  it 
for  a  particular  purpose,  he  thereby  warrants  it  to  be  fit  for  that 
purpose.'  Jones  v.  Bright,  5  Bing.,  544.  The  principle  was  clearly 
expressed  by  Lord  Ellenborough  in  Gardiner  v.  Gray,  4  Campbell, 
143,  where  he  denied  the  application  of  the  rule  as  to  sales  by 
sample:  'I  am  of  opinion,  however,  that  under  such  circumstances 
the  purchaser  has  a  right  to  expect  a  salable  article  answering  the 
description  in  the  contract.  Without  any  particular  warranty,  this 
is  an  implied  term  in  every  such  contract.  Where  there  is  no  op- 
portunity to  inspect  the  commodity,  the  maxim  of  caveat  emptor 
does  not  apply.  He  can  not  without  a  warranty  insist  that  it  shall 
be  of  any  particular  quality  or  fineness,  but  the  intention  of  both 
parties  must  be  taken  to  be  that  it  shall  be  salable  in  the  market 
under  the  denomination  mentioned  in  the  contract  between  them. 
The  purchaser  can  not  be  supposed  to  buy  goods  to  lay  them  on  a 
dunghill.  The  question  then  is  whether  the  commodity  purchased 
by  the  plaintiff  be  of  such  a  quality  as  can  be  reasonably  brought 
into  the  market  to  be  sold  as  waste  silk.  The  witnesses  describe 
it  as  unfit  for  the  purposes  of  waste  silk,  and  of  such  a  quality 
that  it  can  not  be  sold  under  that  denomination.'  " 

We  are  therefore  of  opinion  that  His  Honor's  charge  was  cor- 
rect ;  that  there  was  an  implied  warranty  in  the  sale  of  the  oranges 
that  they  should  be  at  least  salable,  and  the  question  as  to  the 
waiver  of  the  warranty  was  submitted  to  the  jury,  under  instruc- 
tions which  were  fair  to  both  parties. 

The  evidence  offered  upon  the  part  of  the  plaintiff  tended  to 
prove  that  the  oranges  were  packed  by  machinery,  and  that  if  they 
were  taken  from  the  boxes  they  could  not  be  replaced,  and  that 
the  inspection  that  was  made  was  the  one  usually  made  in  the 
trade,  and  was  such  as  men  of  ordinary  prudence  engaged  in  like 
business  would  have  made,  and  the  jury  has  found  this  evidence 
to  be  true. 

We   find   no  error  in   the  record,  and  the  judgment   is  affirmed. 

(2?7)   (  tl.TMAX  v.  WILLIAMS. 

167   N.  C.  312,  83  S.   I"...  348—1914. 

This  was  an  action  to  recover  money  due  on  notes  given  for  the 
purchase  o\  a  German  coach  stallion.  Among  other  defenses,  the 
defendants  sel  up  a  counterclaim  for  damages  for  breach  of  war- 


BY    BREACH.  625 

ranty  contained  in  the  written  agreement.     There  was  a  judgment 
for  plaintiff,  and  defendants  appealed. 

Brown,  J.  .  .  .  The  paper  writing  is  entitled  "Guaranty," 
and  contains  the  following  clause:  .  .  .  "If  said  horse  does  not 
prove  to  be  as  represented,  the  said  party  of  the  first  part  hereby 
covenants  and  agrees  to  replace  said  horse  Ellmer  with  another 
German  coach  stallion  equally  as  good  or  refund  the  money  to 
said  second  party,  provided  said  second  party  shall  return  said 
stallion  to  said  first  party  in  as  good  health  and  condition  on  or 
before  March  1,  1909,  as  when  said  stallion  was  delivered  to  said 
second  party." 

It  is  well  settled  that  a  party  relying  upon  and  setting  up  a 
written  warranty  of  quality  in  the  sale  of  personal  property  is 
bound  by  the  terms  of  that  warranty  and  must  comply  with  them, 
in  order  to  be  entitled  to  redress  in  an  action  to  cover  the  pur- 
chase price.  Bank  v.  Walser,  162  N.  C.,  54,  77  S.  E.,  1006;  Main 
v.  Griffin,  141  N.  C.,  43,  53  S.  E.,  727;  Robinson  v.  Huffstetler, 
165  N.  C,  459,  81  S.  E.  753.     In  the  last  case  it  is  said: 

"It  seems,  therefore,  to  be  settled  that  when  there  is  an  express 
warranty  in  the  sale  or  exchange  of  personal  property,  and  it  is  a 
part  of  the  contract  .  .  .  that  the  property  is  to  be  returned 
within  a  specified  time,  if  not  as  warranted  to  be,  the  complaining 
party  can  have  no  redress  by  reason  of  the  warranty,  in  the  ab- 
sence of  fraud,  without  offering  to  return  the  property  within  the 
time  named." 

The  contract  of  warranty  in  Piano  Co.  v.  Kennedy,  152  N.  C., 
196,  67  S.  E.,  488,  is  very  similar  to  the  warranty  in  this  case. 
In  that  case  it  is  said  that : 

"A  party  relying  upon  and  setting  up  a  written  warranty  of  the 
quality  in  the  sale  of  personal  property  and  a  counterclaim  for 
damages  for  its  breach,  in  an  action  by  the  seller  for  the  purchase 
money,  is  bound  by  the  terms  of  the  warranty,  and  must  comply 
with  them  in  order  to  recover" — citing  30  Am.  &  Eng.  Ency.  Law, 
p.   199. 

See,  also,  Main  v.  Field,  144  N.  C,  307,  56  S.  E.,  943,  11  L.  R. 
A.  (N.  S.),  245,  119  Am.  St.  Rep.,  956;  Mfg.  Co.  v.  Lbr.  Co.. 
15°  N.  C,  510,  75  S.  E.,  718;  Walters  v.  Akers  (Ky.),  101  S.  W., 
1179;  Wilson  v.  Ward,  159  Ind.,  21,  64  N.  E.,  458;  Wilson  v. 
Nichols  &  Shepherd,  139  Ky.,  506,  97  S.  W.,  18. 

As  we  construe  this  contract,  it  was  obligatory  and  not  discre- 
tionary with  the  defendants  to  return  the  horse  to  the  plaintiffs  on 
or  before  March  1,  1909,  in  order  that  the  plaintiffs  may  fulfill 
their  guaranty  by  replacing  the  horse  Ellmer  with  another  German 
coach  stallion  equally  as  good  or  refund  the  money  to  the  defend- 
ants.    This  construction  brings  the  case  clearly  within  the  princi- 


626  DISCHARGE    OF     CONTRACT. 

pie  laid  down  in  all  the  authorities  we  have  cited.  .  .  .  His 
Honor  erred  in  submitting  that  issue  [as  to  the  breach  of  warranty 
and  counterclaim]  to  the  jury,  as  all  the  evidence  proved,  and  in 
fact  it  was  not  contested,  that  the  defendants  did  not  comply  with 
the  terms  of  the  warranty  on  their  part,  as  was  found  by  the 
jury.  Judgment  affirmed. 

See  Cox  v.  Long,  69 — 7,  and  cases  cited ;  Finch  v.  Gregg,  126—176.  Where 
a  vendor  sells  an  article  by  a  particular  description,  it  is  a  condition  pre- 
cedent that  it  shall  answer  the  description;  if  this  condition  is  not  performed, 
the  purcha:  er  may  reject  it,  or  if  he  has  paid  for  it,  recover  the  price:  gen- 
erally it  is  necessary  to  return  the  article,  but  not  if  it  is  destroyed  in  making 
the  discover},  or  is  entirely  without  value.  Smith  v.  Love,  64 — 439  (sale  of 
guano)  ;  Caldwell  v.  Smith,  20—193.  Where  goods  are  sold  to  be  paid  for 
in  good  notes,  if  the  notes  are  not  good,  the  seller  may  return  them  and  sue 
for  goods  sold  and  delivered.  Bell  v.  Ballance.  12 — 391.  Where  property 
is  sold  to  lie  first  class,  and  is  returned  as  being  unfit  for  the  intended  use, 
the  purchaser  is  entitled  to  recover  the  amount  which  he  agreed  to  pay, 
his  negotiable  note  for  the  same  having  been  transferred  before  maturity. 
Baker  v.  Brem,  103 — 72.  When  plaintiff  sold  defendant  a  car  of  peanuts, 
and  loaded  them  in  time  on  Saturday,  but  on  Monday  opened  the  car  and  put 
in  33  more  bags,  this  was  not  a  violation  of  the  contract,  but  defendant  did 
not  have  to  take  and  pay  for  the  extra  bags.     Bowers  v.  Worth,   129—36. 

There  is  no  implied  warranty  of  quality  in  the  sale  of  goods,  in  the  ab- 
sence of  fraud,  the  doctrine  of  caveat  cm f tor  applies  ;  as  in  the  sale  of  rope, 
there  is  no  warranty  although  the  seller  knew  for  what  it  was  to  be  u^ed, 
unless  that  entered  into  the  contract.  Dickson  v.  Jordan,  33 — 166.  But  where 
one  manufactures  articles  for  another,  as  shingles,  for  a  particular  purpose, 
there  is  a  warranty  that  they  shall  lie  suitable  for  that  purpose,  and  the  seller 
can  not  recover  the  contract  price,  although  they  have  been  received  and  used, 
in  ignorance  of  the  defect.  Thomas  v.  Simpson.  80 — 4.  Where  A  bought 
and  paid  for  a  lot  of  corn  from  B  by  giving  him  C's  note,  without  endorse- 
ment, and  C  became  insolvent,  A  was  not  liable  for  the  note  and  was  entitled 
to  the  corn,  Long  v.  Spruill,  52—96.  See  Hatched  v.  Odom,  19—302;  supra, 
(69)  ;  Parker  v.  Leathers,  55 — 249.  For  other  cases  on  implied  warranty,  see 
Machine  Co.  v.  McClamrock,  152—405;  Woodridge  v.  Brown,  149—299;  Med- 
icine Co.  v.  Davenport,  163 — 294 ;  Grocery  Co.  v.  Vernov,  167 — 427 ;  Hall 
Furn.  Co.  v.  Crane-Breed  Mfg.  Co.,  —  X.  C,  — ,  85  S.  E.,  35 ;  6  R.  C.  L., 
492,  990. 

Whether  there  was  a  warranty  is  a  question  of  intention.  Starnes  v.  Er- 
wjn,  32—226;  Beasley  v.  Surles,  140—605;  Wrenn  v.  Morgan,  148—101; 
Harris  v.  Cannady,  149 — 81 ;  Hodges  v.  Smith,  158 — 256.  In  the  sale  of  a 
patent  there  is  no  implied  warranty  of  title,  in  the  sense  that  the  patent  is 
valid  by  not  interfering  with  other  patents.  Hiatt  v.  Twoomey,  21 — 315. 
But  warranty  of  title  is  generally  implied  in  the  sale  of  personalty,  and  it  is 
not  necessary  for  the  purchaser  to  show  that  he  has  ■  een  deprived  ol  the 
property  by  legal  process.     Hodges  v.  Wilkinson,   111 — 56. 

Where  a  slave  is  sold  with  a  warranty  of  soundness,  nearsightedness  is  a 
defect  that  causes  a  breach.  Bell  v.  Jeffreys,  35 — 356:  but  a  warranty  that 
one  is  "sound  in  mind  and  health"  is  not  broken  by  a  defect  in  the  structure 
of  the  little  finger.  Harrell  v.  Norvill,  50 — 29;  "diseased  liver"  would  be  a 
breach  of  general  warranty  of  soundness.  McLean  v.  Waddill,  50 — 137.  If 
a  soda  fountain  is  sold  with  a  warranty  of  good  condition,  this  means  not 
only  that  it  will  make  good  soda  water  at  the  time  of  rale,  but  that  it  has  no 
defect  that  interferes  with  its  future  usefulness,  Pritchard  v.  Fox,  49 — 140; 
Andrews  v.  Peck,  83  Conn.,  666,  78  Atl..  445,  32  L.  R.  A.   (N.  S.).  181. 

Where  the  terms  of  sale  fix  the  conditions  precedent  to  the  existence  of 
any  rights  under  the  warranty,  such  conditions  must  be  complied  with  or 
the  one  injured  can  not  recover.  Main  v.  Griffin,  141 — 43:  but  in  a  similar 
case  in  Main  v.  Field,  144 — 307,  the  contract  was  rescinded,  because  the  con- 


BY    BREACH. 


627 


dition  was  complied  with  in  a  reasonable  time.  This  case  also  states  that  in 
all  sales  by  samples  there  is  an  implied  warranty  that  the  articles  shall  come 
up  to  the  sample,  or  generally  that  an  article  shall  be  merchantable.  Where 
a  contract  for  tobacco  requires  certain  acts  to  be  done  by  the  seller  before 
it  is  accepted,  if  the  buyer  accepts  knowing  that  these  acts  have  not  been 
done,  he  waives  his  right  to  insist  upon  the  condition,  and  must  pay  the  price. 
Dobson  v.  Moore,  64—512;  see  also  Sapona  Iron  Co.,  64—335.  When  the 
plaintiff  paid  for  the  goods  to  be  delivered  in  two  weeks,  but  they  were  not 
shipped  for  a  month,  and  in  the  meantime  had  depreciated  in  value,  his  tak- 
ing the  goods  and  using  them  does  not  waive  his  right  to  damages  for  the 
breach.  Speers  v.  Halstead,  74—620.  Where  A  contracted  to  sell  B  cotton  in 
bales,  "to  be  the  average  grade  of  middling,"  none  below  "low  middling," 
this  was  a  warranty,  and  the  fact  that  the  vendee  had  an  opportunity  to  in- 
spect, did  not  waive  the  warranty.  Love  v.  Miller,  104—582;  Ferrell  v. 
Hales,  119—199  (sale  of  to'  acco).  See  also  Freeman  v.  Skinner,  31—32,  and 
Waldo  v.  Halsev,  48—107.  For  other  cases  of  warranty  similar  to  the  prin- 
cipal cases  above,  fee  Inge  v.  Bond,  10—101;  Baum  v.  Stevens,  24-411; 
Foggert  v.  Blacwelder.  26—238;  McKinnon  v.  Mcintosh,  98—89;  Osborne  v. 
McCoy,  107-726;  .Mfg.  Co.  v.  Davis.  147—267;  17  L.  R.  A.  (N.  S.),  193; 
Hampton  Guano  Co.  v.  Hill  Live  Stock  Co.,  —  X.  C,.  — .  84  S    E.,  774^ 

For  instances  of  former  practice,  see  Howie  v.  Rea,  70—559;  WcEntire 
v.  McEntire,  34—299;  Moore  v.  Piercy,  46—131;  Odom  v.  Harrison.  46— 
402-  Hobbs  v.  Riddick,  50—80;  Baines  v.  Drake,  50—153;  Sapona  Iron  Co. 
v.  Holt,  64—335;  Ludlow  Lumber  Co.  v.  Kuhling,  119  Ky.,  251,  83  S.  W'.,  634, 
115  A.  S.  R.,  254.  Under  the  present  practice,  the  buyer  may  refuse  to  take 
the  goods  for  breach  of  warranty,  or  he  may  return  them  or  notify  the  seller 
that  he  holds  them  subject  to  his  order,  or  he  may  set  up  the  damage  as  a 
counterclaim  when  sued  for  the  price,  or  sue  to  recover  damages,  Kester  v. 
Miller,  119—475;  30  Am.  &  Eng.  Encyc,  190.  There  is  a  conflict  of  authority 
as  to  the  right  to  rescind  an  executed  contract  for  breach  of  warranty.  "In 
the  absence  of  agreement  giving  him  the  right  to  return  the  goods,  it  is  the 
rule  in  most  jurisdictions  that  the  buyer  in  an  executed  contract  of  sale  of 
goods  can  not  on  a  breach  of  warranty  return  the  goods,  his  remedy  in  such 
case  being  on  the  warranty.  On  the  other  hand,  in  other  jurisdictions  it  has 
been  held  that  the  buyer  may  resort  to  either  remedy,  and  his  right  is  recog- 
nized generally  when  the  sale  is  executory.  .  .  .  While  the  question  has 
not  been  discussed  fully  and  the  distinctions  noted  in  our  reports,  we  have 
at  least  three  cases  in  which  it  is  either  held  that  the  purchaser  may  pursue 
either  remedy  or  the  right  is  assumed  to  exist."  Robinson  v.  Huffstetler, 
165-459,  quoting  from  35  Cyc,  434;  Kester  v.  Miller,  119—476;  Mfg.  Co.  v. 
Gray,  124—325;  Critcher  v.  Porter,  135—547.  The  distinction,  that  a  con- 
dition may  avoid  the  contract  while  a  warranty  gives  a  cause  of  action  for 
damages,  is  not  always  observed.  30  Am.  &  Eng.  Encyc,  130;  9  Cyc.;  646; 
Clark  Cont.  209,  464;  6  R.  C.  L,  991. 

4.     Failure   of  consideration. 

(258)  JOHNSTON  v.  SMITH, 

86  N.  C,  498—1882. 

Civil  action  on  contract.  Plaintiff  alleged  that  defendant  gave 
to  him  a  note  for  $1,250,  payable  in  four  months,  as  the  price  of 
fifty  shares  of  certain  stock  sold  to  him,  and  that  plaintiff  was  to 
retain  the  stock  as  collateral  security  for  the  note;  that  the  stock 
has  no  market  value  and  plaintiff  can  not  realize  anything  on  the 
fifty  shares  which  he  caused  to  be  issued  to  the  defendant ;  the 


628  DISCHARGE    OF    CONTRACT. 

note  was  not  paid  at  maturity,  and  in  this  action  the  plaintiff  ten- 
ders the  certificates  of  stock  upon  payment  of  the  debt. 

The  defendant  demurred  to  the  complaint,  the  first,  second  and 
eighth  causes  alleging  insufficient  consideration,  total  failure  of 
consideration,  and  that  the  stock  was  worthless.  The  demurrer 
was  sustained,  and  plaintiff  appealed. 

Ashe,  J.  The  first  and  second  causes  of  demurrer  assigned, 
touching  the  want  of  consideration,  involve  the  same  point  and 
will  be  treated  together. 

As  the  demurrer  admits  the  facts  stated  in  the  complaint  to  be 
true,  if  the  complaint  had  stated  any  facts  from  which  it  might  be 
inferred  that  the  stock  had  no  value  at  the  date  of  the  contract, 
this  ground  of  demurrer  might  properly  have  been  sustained,  but 
the  complaint  only  states  that  the  stock  at  the  time  of  filing  com- 
plaint had  no  market  value,  and  the  plaintiff  could  not  realize  any- 
thing from  it — non  constat,  but  that  the  stock  may  have  had  a 
market  value  at  the  date  of  the  sale;  nor  does  it  follow  that  al- 
though the  stock  may  have  had  no  market  value  at  the  time  of 
filing  the  complaint,  it  may  not  have  had  some  intrinsic  value  at 
that  date,  and  even  market  value  at  the  date  of  the  sale.  And  if 
at  the  time  of  the  sale  it  had  any  value,  no  matter  how  small,  it 
was  a  sufficient  consideration  to  support  the  sale.  McEntire  v. 
McEntire,  34—299. 

We  understand  the  law  to  be  settled  by  repeated  adjudications 
in  this  State,  that  to  defeat  a  sale  or  contract  for  the  want  of  con- 
sideration, there  must  be  an  entire  failure;  and  it  is  otherwise 
where  there  is  only  a  partial  failure,  which  can  only  be  remedied 
by  a  distinct  action,  and  now  perhaps  by  a  counterclaim.  Wash- 
burn v.  Picot,  14  N.  C,  390;  Hobbs  v.  Riddick,  50  N.  C,  80. 
And  what  is  meant  by  a  failure  of  consideration  is  not  simply  that 
the  article  sold  is  worthless  to  the  purchaser,  but  if  it  be  of  some 
value  to  the  seller  there  is  a  consideration,  by  which  the  promise 
of  the  purchaser  to  pay  the  agreed  price,  however,  disproportionate, 
may  be  sustained.  If  it  be  of  no  value  to  either  party,  it  of  course 
can  not  be  made  the  basis  of  a  sale.  But  if  it  is  beneficial  to  the 
purchaser,  in  any  degree,  he  ought  to  pay  for  it,  and  the  law  fixes 
his  obligation  at  the  agreed  price ;  and  if  it  is  a  loss  to  the  seller 
he  ought  to  be  remunerated.  Johnson  v.  Titus,  2  Hill  Rep.,  606; 
Parley  v.  Batch,  23  Pick.,  283;  Hart  v.  Wright,  17  Wend.,  209; 
Barnum  v.  Barnum,  8  Conn.,  469 ;  Brown  v.  Ray,  32  N.  C,  72 ; 
Weatherly  v.  Miller,  47—166;  Findlay  v.  Ray,  50—125. 

But  some  of  the  authorities  go  even  further  than  these  we  have 
cited,  and  hold  that  where  the  purchaser  gets  that  which  he  really 
intends  to  buy,  although  the  thing  bought  proves  to  be  of  no  value, 
there  is  not  a  failure  of  consideration  ;  as  where  one  bought  rail- 


BY    BREACH.  629 

way  scrip  and  it  was  subsequently  repudiated  by  the  company  upon 
the  ground  that  it  was  issued  without  their  authority,  upon  proof 
offered  that  the  scrip  was  the  only  known  scrip  of  the  company, 
and  had  been  for  several  months  the  subject  of  sale  in  the  market: 
Held,  the  buyer  had  got  what  he  really  intended  to  buy,  and  could 
not  rescind  the  contract  on  the  ground  of  want  of  consideration. 
Benj.  on  Sales,  322;  Lambeth  v.  Heath,  15  M.  &  W.  (Ex.  Rep.), 
486;  Barnum  v.  Barnum,  supra.     .     .     . 

The  eighth  ground  must  be  overruled,  for  the  reason  that  "the 
complaint  does  not  state  that  the  certificate  of  fifty  shares  of  stock 
in  said  company  was  utterly  worthless  and  of  no  value  when  is- 
sued, and  now."  The  complaint  only  states  that  said  stock  has  no 
market  value,  and  plaintiff  can  not  realize  anything  from  it.  Be- 
cause an  article  has  no  market  value,  it  does  not  follow  necessarily 
that  it  had  no  intrinsic  value.  The  stock  may  have  had  no  market 
value  at  the  time  of  filing  the  complaint,  and  yet  have  had  such 
value  at  the  time  of  the  sale. 

We  are  of  opinion  there  was  error  in  the  ruling  of  His  Honor 
in  sustaining  the  demurrer.  The  demurrer  must  therefore  be 
overruled. 

The  portions  of  the  case  not  treating  of  this  point  have  heen  omitted.  For 
other  cases  to  the  same  effect,  see  King  v.  Lindsay,  38 — 77 ;  Welch  v.  Wat- 
kins,  2—369:  Hurdle  v.  Richardson,  52—16;  McEntire  v.  McEntire,  34—299; 
Page  v.  Einstein,  52—147:  Parker  v.  Flora,  63—474;  West  v.  Hall,  64—43; 
Smith  v.  Love.  64—439:  Fair  v.  Shelton,  128—105;  Evans  v.  Williamson.  79— 
87;  Daniels  v.  Englehart,  18  Idaho,  548,  111  Pac.  3,  39  L.  R.  A.  (N.  S.),  943. 

Recovery  of  money  paid.  See  Bunch  v.  Lumber  Co.,  134 — 116;  Lowe  v. 
Weatherly,  20 — 353  ;  Tomlinson  v.  Bennett,  145 — 279. 

5.    Alternative   contracts. 

(259)  PLANK  ROAD  CO.  v.  BRYAN, 

51  X.  C,  82—1858. 

Action  of  debt.  The  action  was  brought  to  recover  $400,  the 
balance  due  upon  subscription  to  the  Plank  Road  Company,  the 
subscription  being  made  with  the  privilege  of  paying  it  in  sawed 
lumber.  Demand  was  made  upon  the  defendant  for  the  lumber, 
and  he  failed  to  furnish  it,  and  also  failed  to  pay  a  preliminary 
sum  of  one  dollar  on  each  share  subscribed,  and  there  was  some 
evidence  of  his  having  taken  part  in  the  meeting  of  stockholders. 
The  contention  of  defendant  was,  1.  That  the  evidence  as  to  stock- 
holders meeting  was  incompetent ;  2.  That  failure  to  make  the  pre- 
liminary payment  rendered  the  whole  contract  void ;  3.  That  an 
action  of  debt  would  not  lie.  There  was  a  judgment  for  the  plain- 
tiff, and  defendant  appealed. 

Battle,  J.     (After  discussing  and  overruling  the  first  two  con- 


630  DISCHARGE    OF    CONTRACT. 

tentions  above.)      The  last  objection,  which  appears  upon  the  de- 
fendant's bill  of  exceptions,  is  as  far  from  being  tenable  as  either 
of   the   others.      The   defendant's   subscription   was,   in   effect,    for 
eight   shares   of   the  capital   stock   of   the  company,   amounting   to 
$400,  to  be  paid  in  lumber,  at  his  own  sawmill,  at  a  certain  agreed 
rate.'    He  undoubtedly  had  the  option  to  pay   for  the  amount  of 
his  subscription   in  that   way,  and  the  company  so  understood   it, 
and  were  acting  in  good  faith  when  they  called  upon  him  for  the 
lumber.     We  can  not  see  the  force  of  the  argument  that,  because 
his  subscription  was,  by  the  consent  of  the  company,  to  be  paid  in 
that  manner,  he  did  not  become  a  stockholder  until  payment  was 
made  in  full.    The  company  would  necessarily  need  plank  for  their 
road,  and  they  had  as  much  right  to  buy   from  the  defendant  as 
from  any  other  person,  and  we  are  unable  to  perceive  any  differ- 
ence between  paying  him   with   his   own   subscription  money,   and 
with  anv  other   funds  belonging  to  them.     He  had  the  option  of 
paying  by  delivering  lumber  at  his  mill  in  discharge  of   his  con- 
tract, but  when  he  first  neglected,  and  then  refused  to  avail  him- 
self of  it,  it  became  an  obligation  to  pay  money,  and  the  company 
had  the  right,  as  in  other  cases,  after  the  sale  of  his  stock,  as  pre- 
scribed in  their  charter,  to  sue  him,  in  debt,  for  the  sum  thus  as- 
certained to  be  the  balance.     Hamilton  v.  Eller,  33 — 276.     If  this 
view  of  the  case  be  correct,  the  cases  of  Grandy  v.  Small,  48  N.  C, 
8,  and  Cole  v.  Hester,  31   N.  C,  23,  referred  to  by  defendant's 
counsel,  have  no  application. 

Per  Curiam.  Judgment  affirmed. 

To  the  same  effect.  Hargrave  v.  Smith,  62—165  ;  Simmons  v.  Cahoon,  68— 
303;  su[>ra,  227;  Austin  v.  Miller,  74—274;  supra,  232;  Lackey  v.  Miller, 
61—26;  Fort  v.  Bank,  61—417;  Speer  v.  Cowles,  72—265.  Before  the  time 
of  performance  the  choice  is  with  the  promisor;  after  the  time  is  past,  it  is 
with  the  promisee.  Homeslev  v.  Elias,  75— p.  573:  3  Page  Cont.,  sees.  1391, 
1392;  Harriman  Cont.,  sec.  262:  2  Pars.  Cont.  (9  Ed.),  804.  809;  9  Cyc,  647; 
29  L.  R.  A.,  849. 

If  a  person  contract  to  do  one  of  two  things,  and  one  is  possible  and  the 
other  not,  he  must  do  the  former.  If  both  are  possible  at  the  time  ot  the 
contract  and  one  becomes  impossible  afterwards,  the  liability  will  depend 
upon  the  intention.  9  Cvc.  633,  647 ;  Clark  Cont.,  474  and  note ;  3  Page  Cont., 
sec.  1380,  1381. 


BY    BREACH.  631 

6.     Impossibility  cf  performance. 
1.    AT    THE    TIME    OF    THE    CONTRACT,    Ante     (86). 

2.  created  by  one  of  the  parties,  Ante  (246). 

3.  subsequent  impossibility. 

(260)  CLANCY  v.  OVERMAN, 

18  X.  C,  402—1835. 

Action  of  covenant  upon  an  apprentice  bond.  The  plaintiff 
bound  a  negro  boy  to  the  defendant  for  three  years,  to  learn  a 
trade,  with  condition  that  the  boy  should  serve  faithfully  and 
obey ;  the  defendant  covenanted  to  "teach  and  instruct,  or  cause  to 
be  taught  and  instructed,  the  said  negro  boy,  the  art  and  mystery 
of  the  coach-making  business."  The  breach  alleged  was  that  the 
defendant  did  not  teach  the  boy  the  trade.  The  defendant  offered 
evidence  that  he  made  an  honest  effort  to  teach  the  boy,  and  the 
boy  would  not  obey  him  and  would  not  learn.  The  court  charged 
that  the  defendant's  covenant  was  absolute,  and  he  could  not  ex- 
cuse failure  to  perform  by  the  want  of  capacity  in  the  boy,  but 
this  might  be  considered  in  estimating  damages.  Judgment  for 
plaintiff,  and  defendant  appealed. 

Gaston,  J.  There  is  a  well-known  distinction  between  obliga- 
tions imposed  by  the  law,  and  those  created  by  express  contract. 
When  the  law  imposes  a  duty,  and  the  party  charged  is  disabled 
to  perform  it  without  any  default  in  him,  and  he  has  no  remedy 
over,  the  law  will  excuse  him ;  but  when  the  party,  by  his  own  con- 
tract, imposes  unconditionally  a  duty  or  charge  upon  himself,  he 
is  bound  to  perform  it,  or  answer  in  damages  for  its  nonperform- 
ance, notwithstanding  any  accident  by  inevitable  necessity.  In  the 
latter  case,  the  contract  constitutes  the  law  between  the  parties,  and 
if  it  contain  no  exception,  none  will  be  presumed.  This  court 
agrees,  therefore,  with  the  Judge  below,  in  holding  that  the  en- 
srasrement  of  the  defendant  was  absolutelv  binding  to  the  extent 
of  that  engagement ;  and  it  is  also  of  opinion  with  him  that  the 
covenants  of  the  respective  parties  to  this  indenture  were  mutual 
and  independent.  But  we  do  not  concur  in  the  construction  which 
was  given  below  to  the  covenant  of  the  defendant.  It  seems  to  us 
that  an  engagement  to  teach  the  apprentice,  or  to  cause  the  appren- 
tice to  be  taught,  a  trade,  is  not  an  engagement  that  the  apprentice 
will  learn  that  trade.  If  it  were  so,  then  had  the  apprentice  died 
on  the  day  succeeding  the  execution  of  the  indenture,  or  had  been 
visited  by  an  infirmity  which  utterly  disabled  him  to  learn,  or  had 


632  DISCHARGE    OF    CONTRACT. 

obstinately  resisted  every  proper  effort  to  make  him  learn,  the 
covenant  would  have  been  broken,  and  the  defendant  responsible 
in  damages  for  the  breach.  Nor  do  we  think  that  in  such  a  case 
these  circumstances  should  avail  to  lessen  the  damages;  for  if  an 
individual  deliberately  bind  himself  to  insure  a  certain  result,  and 
the  obligation  is  broken,  the  extent  of  the  injury  forms  the 
measure  of  damages,  however  the  performance  may  have  been  de- 
feated. It  would  be  doing  violence,  we  think,  to  the  words  found 
in  this  covenant,  to  regard  them  as  stipulating  for  more  than  faith- 
ful, diligent  and  skillful  instruction.  The  case  of  Winston  v.  Linn, 
4  E.  C.  L.  Rep.,  131,  which  has  been  cited  for  the  plaintiff,  does 
not  conflict  with  this  opinion.  It  was  there  held  that  the  covenants 
were  mutual  and  independent,  and  that  disobedience  on  the  part 
of  the  apprentice,  and  his  temporary  withdrawal  from  the  service 
of  the  master,  did  not  warrant  the  latter  in  insisting  that  the  in- 
denture was  dissolved.  It  decides  no  more;  and  the  learned  Mr. 
Justice  Bayley,  who  presided  on  that  occasion,  and  whose  views 
are  given  more  in  extenso  than  those  of  his  brethren,  expressly 
says,  "If  he  (the  apprentice)  had  continued  to  absent  himself  to 
the  end  of  the  term,  there  can  be  no  doubt  but  that  would  have 
been  an  answer  to  the  action." 

The  court  is  also  of  opinion  that  the  evidence  offered  of  the  acts 
and  declarations  of  the  apprentice  was  improperly  rejected.  They 
may  not  have  been  of  great  importance,  and  they  are  not  evidence 
because  of  any  credit  due  to  the  party  by  whom  they  were  done  or 
uttered ;  but  his  acts  are  evidence  because  they  are  his  acts ;  and 
his  declarations  are  evidence  because  his  disposition  and  temper 
are  subjects  of  investigation  ;  and  these  can  not  be  ascertained  but 
through  the  medium  of  such  external  signs. 

The  judgment  below  is  to  be  reversed,  and  a  new  trial  awarded. 

To  the  same  effect  is  Wyatt  v.  Morris.  19—108:  Bell  v.  Walker,  50—43; 
3  Page  Cont.  sees.  1362.  1363,  1375  to  1379:  14  L.  R.  A..  215;  15  L.  R.  A., 
450:  9  Cyc.,  688. 

Common  carriers. — Carrier's  responsibility  is  discharged  by  act  of  God, 
or  of  the  public  enemies,  but  whatever  might  have  been  prevented  by  human 
foresight,  he  is  liable  for,  as  where  the  injurv  was  due  to  a  defective  rudder  of 
a  ship^.  Backhouse  v.  Sneed,  5—173:  Harrell  v.  Owens.  18—273;  Mizell  v. 
Burnett.  49—249;  Capehart  v.  R.  R.,  81—438. 

(261)  LAWING  v.  RINTLES, 

97  X.  C,  350.  2  S.  E..  252—1887. 

Civil  action  on  a  contract.  The  plaintiff  contracted  to  furnish 
material  and  build  certain  houses  for  the  defendant,  in  the  city  of 
Charlotte,  to  be  completed  by  the  1st  of  October,  and  the  defend- 
ant was  to  pay  him  $2,950,  in  installments,  as  the  work  was  per- 
formed.    The   plaintiff   did   work   and    furnished  material   to   the 


BY    BREACH.  633 

amount  of  $2,720,  and  the  defendant  had  paid  him  the  sum  of 
$2,048 ;  but  before  the  buildings  were  completed,  they  were  de- 
stroyed by  fire  without  any  negligence  or  default  of  the  plaintiff, 
and  this  action  is  brought  for  $672,  which  the  plaintiff  claims  is 
still  due  him  for  the  work  done  before  the  houses  were  destroyed. 
The  defendant  contends  that  the  plaintiff  can  not  recover  because 
he  had  not  performed  his  part  of  the  contract.  The  defendant  had 
a  policy  of  insurance  on  the  houses,  while  the  plaintiff  had  no 
insurance. 

His  Honor  intimated  that  the  plaintiff  could  not  recover,  and 
the  plaintiff  submitted  to  a  nonsuit  and  appealed. 

Davis,  J.  It  is  contended  for  the  plaintiff  that  he  was  entitled 
to  pay  for  the  material  furnished,  and  the  work  and  labor  done  on 
the  buildings  up  to  the  time  of  their  destruction  by  fire,  and  for 
this  he  cites  many  authorities ;  but  upon  examination  they  do  not 
sustain  the  position.  Brewer  v.  Tysor,  48  N.  C,  183,  referred  to 
is  direct  authority  the  other  way.  The  court  say  that  the  contract 
being  an  entire  one,  the  plaintiff  can  not  recover  unless  he  avers 
and  proves  an  entire  performance.  The  plaintiffs  sought  to  re- 
lieve themselves  of  the  obligation  to  perform  the  entire  contract, 
by  reason  of  sickness,  upon  the  maxim,  that  actus  Dei  neminem 
facit  injuriam,  but  the  court  said  that  did  not  excuse  them,  but 
when  the  case  was  again  before  the  court  at  a  subsequent  term, 
50  N.  C,  173,  it  appeared  that  the  contract  was  for  work  divided 
into  three  separate  parts,  for  each  of  which  a  separate  price  was 
to  be  paid,  and  the  court  said  there  was  no  reason  why  the  plain- 
tiffs should  not  be  paid  for  the  work  done  on  the  two  parts  which 
had  been  finished,  according  to  the  contract. 

Instead  of  the  plaintiff's  right  to  recover,  the  weight  of  authority 
would  require  him  to  rebuild,  and  thus  perform  his  contract. 

In  Adams  v.  Nichols,  19  Pick.,  275,  it  is  said :  "It  is  not  mate- 
rial to  consider  whose  property  the  house  was  before  the  conflagra- 
tion. The  defendant  had  contracted  to  build  and  finish  the  house 
on  the  plaintiff's  land.  After  the  conflagration  he  might  have 
proceeded  under  the  contract,  and  if  he  completed  the  house,  ac- 
cording to  the  terms  of  his  agreement,  the  plaintiff  would  have 
been  bound  to  fulfill  his  part  of  the  contract." 

In  this  case  it  was  held  that  the  contractor  was  not  discharged 
by  the  conflagration  from  the  duty  to  build.  In  School  District  v. 
Dauchy,  25  Conn.,  531.  the  defendant  had  contracted  to  build  a 
schoolhouse  by  a  day  named — just  before  the  day,  it  was  set  fire 
to  by  lightning  and  entirely  destroyed.  It  was  held  that  the  non- 
performance of  the  contract  was  not  excused.  The  whole  question 
seems  to  be  well  and  fully  considered  in  the  case  of  Tomkins  v. 
Dudley,  25  New  York,  272.     The  defendant  had  guaranteed  the 


634  DISCHARGE    OF    CONTRACT. 

performance  of  a  contract  by  a  builder,  to  erect  a  schoolhouse, 
which  he  failed  to  perform.  The  court  says:  "In  justification  of 
such  nonperformance,  he  alleges  the  destruction  of  the  building  by 
fire,  an  inevitable  accident,  without  any  fault  on  his  part.  The 
law  is  well  settled  that  this  is  no  legal  justification  for  the  non- 
performance of  the  contract."  This  is  the  conclusion  at  which  the 
court  arrived  in  that  case,  after  a  review  of  numerous  decisions 
upon  the  question,  and  we  are  well  satisfied  in  this  case  that  the 
plaintiff  has  no  right  to  recover. 

When  the  contract  was  entered  into,  he  could  have  protected 
himself  against  loss  by  fire,  either  by  a  stipulation  in  the  contract 
or  by  insurance,  but  as  this  was  not  done,  it  is  his  misfortune. 
The  position  that  the  plaintiff  was  entitled  to  the  money  received 
by  the  defendant  upon  the  policy  of  the  insurance  which  she  had 
on  the  building,  was  not  seriously  insisted  upon  in  this  court.  By 
the  insurance  she  was  only  indemnified  against  loss  on  account  of 
the  payments  which  she  had  made. 

There  was  no  error,  and  the  judgment  must  be  affirmed. 

See  Keel  Construction  Co.,  143 — 429 ;  Coal  Co.  v.  Ice  Co..  134 — p.  583 ; 
Dermott  v.  Jones,  2  Wall.,  1;  12  L.  R.  A.,  571  ;  Clark  Cont..  472;  9  Cvc,  625  ; 
Whitlock  v.  Lumber  Co.,  145—120;  Milske  v.  Steiner  Mantel  Co.,  103  M<1.. 
235,  63  Atl.,  471,  5  L.  R.  A.  (  X.  S. ),  1105. 

(262)    STEAMBOAT   CO.   v.   TRANSPORTATION   CO., 

166  X.  C,  582.  82  S.  E.,  956—1914. 

Action  upon  contract.  The  plaintiff  leased  to  the  defendant  a 
steamship  to  be  used  only  on  Sundays  from  June  23  to  September 
29,  1912,  for  the  sum  of  $80  per  Sunday,  payable  "on  the  1st  and 
15th  of  each  month  after  said  steamship  has  been  so  used  by  said 
party  of  the  second  part  during  said  term."  The  defendant  used 
the  steamer  until  August  4,  when  it  was  destroyed  by  fire.  The 
plaintiff  had  received  payment  for  all  the  trips  made  except  two, 
and  he  sues  for  these  payments.  The  defendant  resisted  payment 
on  the  ground  that  the  contract  was  entire  and  that  the  plaintiff 
had  no  right  of  action  without  showing  performance  for  the  whole 
time  covered  by  the  contract,  and  also  set  up  a  counterclaim  for 
damages  for  failure  to  perform  the  contract.  A  motion  of  non- 
suit was  allowed,  the  defendant  withdrew  his  counterclaim,  and 
plaintiff  appealed. 

Hoke,  J.  Where  parties  contract  with  reference  to  specific 
property  and  the  obligations  assumed  clearly  contemplate  its  con- 
tinued existence,  if  the  property  is  accidentally  lost  or  destroyed 
by  fire  or  otherwise,  rendering  performance  impossible,  the  parties 
are  relieved  from  further  obligations  concerning  it.     As  to  the  ex- 


BY    BREACH.  635 

ecutory  features  of  such  an  agreement,  the  destruction  of  the  prop- 
erty, without  fault,  will  amount  to  a  discharge  of  the  contract.  3 
Page  on  Contracts,  sec.  1730;  Clark  on  Contracts  (2d  Ed.),  p.  475. 

Under  the  circumstances  as  stated  and  in  reference  to  the  ad- 
justment of  rights  and  liabilities  of  the  parties  by  reason  of  stipu- 
lations already  performed,  if  the  contract  in  express  terms  or  from 
its  nature  is  entire  and  indivisible,  requiring  full  performance  be- 
fore anything  is  due,  then  no  recovery  can  be  had,  but,  if  the  con- 
tract is  severable  and  substantial  benefit  has  been  received  under 
it  and  enjoyed  by  one  of  the  parties,  this  must  ordinarily  be  ac- 
counted for,  either  according  to  the  rates  fixed  by  the  contract  or 
under  a  quantum  meruit,  as  the  case  may  be,  and  if,  under  the 
terms  of  the  contract,  the  work  done  or  the  services  rendered  are 
to  be  paid  for  by  installments  or  at  stated  periods,  these  install- 
ments or  payments  being  fixed  with  regard  to  the  value  of  the 
work  done  or  as  specified  portions  are  performed,  in  that  event, 
if  the  property  is  destroyed,  the  claimant  may  recover  for  the  in- 
stallments due  or  for  the  portion  of  the  work  done  as  for  an 
amount  already  earned. 

These  general  principles  are  in  accordance  with  decided  case 
here  and  in  other  jurisdictions.  Keel  v.  Construction  Co.,  143  N. 
C,  429-432,  55  S.  E.,  826;  Tussey  v.  Owen,  139  N.  C,  457,  52 
S.  E.,  128;  Coal  Co.  v.  Ice  Co.,  134  N.  C,  574,  47  S.  E.,  116; 
Lawing  v.  Rintles,  97  N.  C,  350,  2  S.  E.,  252 ;  Chamblee  v.  Baker, 
95  N.  C,  98;  Gorman  v.  Bellamy,  82  N.  C,  496;  Brewer  v.  Tysor, 
50  N.  C,  173;  Viterbo  v.  Friedlander,  120  U.  S.,  707,  7  Sup.  Ct, 
962,  30  L.  Ed.,  776;  McCaslin  v.  Mfg.  Co.,  155  Ind.,  298,  58  N. 
E.,  67;  Dexter  v.  Norton,  47  X.  Y.,  62,  7  Am.  Rep.,  415;  Wells 
v.  Calnan,  107  Mass.,  514.  9  Am.  Rep.,  65;  Stewart  v.  Stone,  127 
N.  Y.,  500,  28  N.  E.,  595,  14  L.  R.  A.,  215;  and  the  two  cases 
of  Lawing  v.  Rintles,  supra,  and  Keel  v.  Construction  Co.,  very 
well  illustrate  the  different  positions  as  applied  to  the  facts  of  the 
present  appeal.  In  Lawing's  Case,  a  contract  to  construct  certain 
buildings  as  a  whole  was  held  to  be  entire  and,  on  accidental  de- 
struction of  buildings  before  completion,  it  was  held  that  the  con- 
tractor could  not  recover  any  portion  of  the  price.  In  the  later 
case  of  Keel  v.  Construction  Co.,  the  contract  was  to  construct  a 
building,  the  payment  to  be  by  certain  installments  due  as  specified 
portions  of  the  structure  were  completed ;  the  apportionment  hav- 
ing evident  reference  to  the  portion  of  the  work  done,  and,  in  the 
opinion,  the  general  principles  applicable  were   stated  as   follows : 

"When  one  contracts  with  the  owner  of  a  lot  to  furnish  all  the 
materials  and  build  and  construct  a  house  thereon  for  a  certain 
price,  the  contract  being  entire  and  indivisible,  if  the  structure,  be- 
fore completion,  is  destroyed  by  fire,  without  fault  on  the  part  of 


636  DISCHARGE    <'I;    CON!  R  \i  T. 

the  owner,  and  the  contractor,  being  given  the  opportunity,  refuses 
to  proceed  further,  in  such  case,  he  is  liable  to  refund  any  money 
which  may  have  been  paid  him  on  the  contract,  and  also  for  dam- 
ages for  its  nonperformance.  Brewer  v.  Tysor,  48  N.  C,  181  ; 
Lawing  v.  Rintles,  97  N.  C,  350,  2  S.  E.,  252;  Beach's  Modern 
Law  of  Contracts,  sec.  232,  citing  Tompkins  v.  Dudley,  25  N.  Y., 
272,  82  Am.  Dec,  349.  And  this  principle  will  not  be  affected  by 
the  fact  that  the  money  is  to  be  paid  by  installments,  if  the  price 
is  entire  for  a  completed  building  and  these  installments  are  arbi- 
trarv  and  fixed  without  any  regard  to  the  value  of  any  distinctive 
portion  of  the  work  done.  School  Trustees  v.  Bennett,  27  N.  J. 
Law,  513,  72  Am.  Dec,  373.  lint,  if  the  contract  is  divisible  and 
severable,  if  the  price  is  not  entire  for  a  completed  building,  but 
is  payable  by  installments,  these  installments  being  fixed  with  re- 
gard to  the  value  of  the  work  done,  or  as  certain  portions  of  same 
are  finished,  in  that  event,  if  the  structure  be  destroyed  by  inevita- 
ble accident,  'the  builder  is  entitled  to  recover  for  the  installments 
which  have  been  fully  earned,'  but  it  seems  that  he  has  no  claim 
for  a  proportional  part  of  the  next  installment  which  has  been 
only  partially  earned.  Brewer  v.  Tysor,  50  N.  C,  173 ;  Beach, 
Modern  Law,  citing  Richardson  v.  Shaw,  1  Mo.  App.,  234.  In 
this  well-considered  case,  Lewis,  Judge,  delivering  the  opinion, 
says:  'The  true  principle  which  controls  such  a  case  as  this  is 
clearly  stated  in  Addison  on  Contracts,  452:  "If  the  contract 
price  of  the  building  is  to  be  paid  by  installments  on  the  comple- 
tion of  certain  specified  portions  of  the  work,  each  installment  be- 
comes a  debt  due  to  the  builder  as  the  particular  portion  specified 
is  completed;  and,  if  the  house  is  destroyed  by  accident,  the  em- 
plover  would  be  bound  to  pay  the  installments  then  due,  but  would 
not  be  responsible  for  the  intermediate  work  and  labor  and  ma- 
terials." '  " 

And  such  in  effect  is  the  case  presented  here,  the  contract  show- 
ing that  plaintiff  was  to  be  paid  $80  per  Sunday,  payable  on  the 
1st  and  15th  of  each  month,  after  such  steamship  has  been  so  used 
by  said  party  of  the  second  part  during  said  term,"  and,  in  further 
support  of  the  position  that  the  price  per  Sunday  was  to  be  re- 
garded as  a  severable  item,  it  is  provided  further  in  the  contract 
that  in  case  the  weather  was  such  as  to  prevent  the  trip  on  any 
given  Sunday,  the  stipulated  price  for  such  day  was  not  to  be 
required. 

On  the  facts  in  evidence,  therefore,  the  plaintiff,  in  any  aspect 
of  the  case,  had  a  definite  claim  for  $160,  earned  under  the  pro- 
visions of  the  contract,  which  entitled  him  to  bring  suit  and,  if  de- 
fendant desires  to  insist  that  it  has  been  wronged  by  plaintiff's 
failure  to  perform  further  the  position  should  be  made  available 


BY    BREACH.  637 

by  counterclaim,  the  course  suggested  and  approved  in  some  of 
the  authorities  cited.  See  Coal  Co.  v.  Ice  Co.,  134  N.  C,  579,  47 
S.  E.,  116;  Chamblee  v.  Baker,  supra;  Gorman  v.  Bellamy,  supra. 
In  reference  to  this  counterclaim  of  defendant,  it  may  be  well 
to  note  that  the  obligations  of  an  ordinary  business  contract  are 
imperative  in  their  nature.  This  principle,  which  relieves  a  party 
to  such  a  contract  by  reason  of  the  destruction  of  the  property 
with  which  it  deals,  is  sometimes  treated  as  an  exception ;  the  gen- 
eral rule  being  the  other  way.  9  Cyc,  pp.  627-629.  Before  a 
party  can  avail  himself  of  such  a  position,  he  is  required  to  show 
that  the  property  was  destroyed,  and  without  fault  on  his  part. 
For  this  reason,  and,  further,  because  by  the  terms  of  the  present 
contract  the  care  and  custody  of  the  property  was  left  with  plain- 
tiff, if  it  is  established  that  plaintiff  has  failed  to  further  perform 
the  executory  features  of  this  agreement,  the  burden  would  be  on 
plaintiff  to  show  that  the  steamer  was  destroyed  by  fire,  and  that 
the  plaintiff  and  its  agents  were  in  the  exercise  of  proper  care  at 
the  time.  Xew  trial. 

(263)  ALLEN  v.  BAKER, 

86  \".  C,  91,  41   A.   R..  444—1882. 

Civil  action  for  breach  of  marriage  contract.  While  the  action 
was  pending  the  defendant  died,  and  his  administrator  was  made 
a  party  :  the  court  held  the  action  did  not  abate.  The  defendant 
promised  to  marry  the  plaintiff,  and  afterwards  finding  out  from 
his  physician  that  he  had  a  disease  which  rendered  him  unfit  for 
the  married  life,  he  asked  to  have  the  marriage  postponed,  and  the 
plaintiff's  parents  assented.  At  the  time  of  his  answer  to  the  ac- 
tion he  still  had  the  disease,  and  at  no  time  had  been  in  a  condi- 
tion to  marry,  as  he  alleged.  There  was  judgment  for  the  plain- 
tiff, and  defendant  appealed. 

Ruffix.  J.  In  Shuler  v.  Millsaps,  71  X.  C,  297,  the  Act  of 
1868-69  (Bat.  Rev.,  ch.  45,  sees.  113,  114),  received  a  construc- 
tion by  this  court,  and  it  was  held  that  by  reason  of  the  provisions 
thereof,  an  action  for  a  breach  of  promise  of  marriage  did  not 
abate  upon  the  death  of  the  defendant,  but  survived  as  against  his 
personal  representative.  We  feel  ourselves  bound  by  that  decision, 
though  were  it  an  open  question,  we  are  inclined  to  think  we 
should  hold  differently,  in  a  case  like  that  and  the  present  one,  in 
which  no  special  damages  were  laid  in  the  complaint. 

As  stated  by  His  Honor,  contracts  of  this  sort  differ  from  ordi- 
nary contracts,  as  for  the  sale  of  goods  and  the  like,  in  which  dam- 
ages are  awarded  according  to  some  well-settled  rule  of  the  courts, 
and   when   the   financial   condition   of   the   defendant   can   have   no 


538  DISCI]  KRGZ    nl;    CONTRACT. 

bearing  on  the  question.  About  the  only  instruction  that  could  be 
given  was  the  general  one  which  His  Honor  gave,  to  the  effect 
thai  all  the  circumstances  of  the  case  and  the  surroundings  of  the 
parties  should  be  fairly  considered,  and  just  compensation  allowed 
for  the  anguish  endured  by  the  plaintiff,  and  the  injury  inflicted 
upon  her  prospects  in  life.  In  estimating  them,  it  is  proper,  ac- 
cording to  the  great  weight  of  modern  authority,  that  the  jury 
should  consider  the  pecuniary  condition  of  the  defendant  as  some 
standard  by  which  to  measure  her  disappointment,  and  the  extent 
oi  her  loss.  Harrison  v.  Swift,  13  Allen.  144;  Sprague  v.  Craig, 
51  111..  288;  Sedgwick  on  Damages  (7  Ed.),  146.  The  same  au- 
thorities are  full  to  the  point,  that  the  jury  should  take  into  con- 
sideration whatever  mortification  and  pain  of  mind  the  plaintiff 
may  have  suffered,  resulting  from  a  refusal  of  the  defendant  to 
Fulfill  his  promise.  So  that,  in  the  judgment  of  this  court  no  error 
was  committed  with  reference,  either  to  the  testimony  admitted, 
or  the  instructions  given  to  the  jury,  of  which  the  defendant  can 
rightly  complain. 

We  are  of  opinion,  however,  that  the  issues  which  were  sub- 
mitted do  not  cover  the  whole  merits  of  the  case,  and  that  without 
other  findings  on  the  part  of  the  jury  it  is  impossible  to  do  full 
justice  to  the  rights  of  both  parties.  Assuming  it  to  he  true,  as 
we  do  from  the  verdict,  that  the  plaintiff  did  not  give  her  assent 
to  a  postponement  of  the  marriage,  and  that  defendant's  intestate 
refused  to  consummate  it,  it  is  still  important  to  know  from  what 
cause  that  refusal  proceeded — whether  from  a  disregard  of  the 
plaintiff's  feelings  and  his  own  plighted  word,  or  from  a  conscious- 
ness supervening  his  engagement,  that  he  labored  under  a  loath- 
some disease,  incurable  in  fact,  and  of  such  a  nature  as  to  render 
him  unfit  to  enter  the  marriage  relation  with  anyone.  In  his  an- 
swer he  alleged  that  his  failure  to  comply  really  depended  upon 
such  a  conviction  on  his  part,  and  if  such  he  true,  this  court  could 
not  hold  that  he  was  responsible  in  damages  by  reason  thereof. 
We  can  not  understand  how  one  can  be  liable  for  not  fulfilling  a 
contract,  when  the  very  performance  thereof  would  in  itself 
amount  to  a  great  crime,  not  only  against  the  individual,  hut 
against  society  itself. 

However  once  doubted,  it  is  now  generally  conceded  that  if  the 
performance  of  a  contract  be  rendered  impossible  by  the  act  of 
God  alone,  such  fact  will  furnish  a  valid  excuse  for  its  nonper- 
formance ;  and  such  a  stipulation  will  be  understood  to  be  an  in- 
herent part  of  every  contract.  It  is  likewise  true  that  whenever 
the  main  part  of  an  executory  contract  becomes  impossible  of  per- 
formance from  any  cause  beyond  the  power  of  the  party  to  con- 
trol, it  will  be  treated  as  having  become  impossible  in  toto.     Why 


BY     BREACH.  639 

should  not  the  same  principle  apply  to  a  contract,  the  fulfillment 
of  which,  owing  to  causes  subsequently  intervening  and  altogether 
independent  of  any  default  of  the  party,  can  only  be  productive  of 
consequences  disastrous  to  the  parties  themselves,  and  such  as  may 
entail  misery  upon  others  to  come  after  them? 

Our  attention  was  called  by  counsel  to  the  decisions  made  by  the 
court  of  Queen's  Bench,  and  afterwards  by  the  court  of  Exche- 
quer, in  the  case  of  Hall  v.  Wright,  96  Kng.  C.  L.  Rep.,  74(>,  where 
a  defendant  was  held  liable,  who,  after  pomise  and  before  breach, 
became  afflicted  with  bleeding  from  the  lungs,  whereby  he  became 
incapable  of  marrying  without  imminent  hazard  to  his  life.  In 
making  that  decision,  the  court  treated  the  contract  for  marriage 
as  they  would  any  other  contract,  saying,  that  though  in  bad 
health,  the  man  might  nevertheless  so  far  perform  his  contract  as 
to  marry  the  woman,  and  thus  secure  to  her  the  status  and  social 
position  of  his  wife,  and  endow  her  with  a  wife's  interest  in  his 
estate;  and  if  unwilling  to  do  this,  he  should  compensate  her  in 
damages  for  his  refusal.  We  confess  that  we  are  not  satisfied 
with  this  course  of  reasoning.  In  the  first  place,  it  is  not  possible 
to  assimilate  a  contract  like  this  to  an  ordinary  contract  for  per- 
sonal service,  which,  if  not  capable  of  being  wholly  performed, 
may  he  partially  so;  and  in  the  next  place,  we  believe  it  to  he  con- 
trary to  the  understanding  of  men  generally,  that  the  acquisition  of 
property  or  social  position,  either  does  or  should  constitute  a  main 
and  independent  motive  and  inducement  for  entering  into  such  a 
contract. 

The  usual,  and  we  may  say  legitimate,  objects  sought  to  he  at- 
tained by  such  agreements  to  marry,  arc.  the  comforts  ol  associa- 
tion, the  consortium  iritae,  as  it  is  called  in  the  hooks;  the  gratifi- 
cation of  the  natural  passions  rendered  lawful  by  the  union  of 
the  parties;  and  the  procreation  of  children.  And  if  either  party 
should  thereafter  become,  by  the  act  of  Cod  and  without  fault  on 
his  own  part,  unlit  for  such  a  relation  and  incapable  of  perform- 
ing the  duties  incident  thereto,  then  the  law  will  excuse  a  non- 
compliance with  the  promise — the  main  part  of  the  contract  hav- 
ing become  impossible  of  performance,  the  whole  will  he  consid- 
ered to  be  so. 

In  Pollock  on  Contracts,  370  (a  hook  in  which  the  principles  of 
contract  are  treated  more  philosophically  than  by  any  author 
known  to  us),  the  decision  in  Nail  v.  Wright,  supra,  is  referred 
to,  with  the  remark  that  it  is  so  much  against  the  tendency  of  the 
later  cases  as  to  be  now  of  little  or  no  authority,  beyond  the  mere 
point  of  pleading  decided  therein. 

We  are  not  unmindful  of  the  fact  that  the  malady  under  which 
the  party  in  this  instance  labored,  was  the  legitimate  result  of   his 


640  DISCHARGE    OF    CONTRACT. 

own  imprudence;  or,  that  the  evidence  offered  showed  that  the 
disease  was  upon  him,  when  he  gave  his  promise  to  the  plaintiff. 
As  to  the  first  point,  the  same  might  have  been  said  of  consump- 
tion, or  any  other  fatal  and  disqualifying  disease;  it  too  may  have 
proceeded  from  imprudence  and  sinful  indulgence,  but  if  con- 
tracted when  he  owed  no  duty  to  the  plaintiff,  we  can  not  see  how 
that  can  vary  the  case.  The  other  is  a  point  of  more  consequence ; 
if  knowing,  or  by  using  extraordinary  diligence  he  might  have 
known,  that  his  infirmity  was  incurable,  or  of  long  duration,  he 
entered  into  a  contract  with  the  plaintiff,  his  subsequent  incapacity 
to  perform  it  would  furnish  no  excuse  for  its  breach — so  far  from 
it,  it  would  amount  to  a  gross  aggravation.  But,  on  the  other 
hand,  if  he  had  reason  to  believe  his  disease  was  a  temporary  one, 
which  might  be  healed  in  time  to  enable  him  to  complete  his  agree- 
ment, then  the  law  would  hold  him  excusable  for  a  breach  result- 
ing from  a  knowledge  subsequently  attained,  that  his  disease  was 
in  fact  not  only  incurable,  but  such  as  must  necessarily  be  com- 
municated to  his  wife,  and  probably  to  their  offspring,  in  case  he 
made  her  such  and  availed  himself  of  his  conjugal  rights. 

The  law  will  constrain  no  man  to  assume  a  position  so  full  of 
peril,  as  to  have  placed  within  his  reach  the  lawful  means  of  grat- 
ifying a  powerful  passion,  at  the  risk  of  another's  health  or  life, 
and  the  possibility  of  bringing  into  the  world  children  in  whose 
constitution  the  seeds  of  a  father's  sin  shall  lurk.  As  said  in  the 
dissenting  opinion  in  Hall  v.  Wright,  it  would  seem  to  be  strange 
that  a  man  should  be  liable  in  damages  for  not  doing  that  which 
is  against  all  law,  human  and  divine. 

Under  the  rules,  without  sending  the  case  back,  and  without 
depriving  the  plaintiff  of  the  benefit  of  the  verdict  in  her  favor 
upon  the  issues  already  submitted,  the  court  directs  these  further 
issues : 

1.  Did  the  defendant's  intestate  refuse  to  perform  his  contract 
of  marriage  with  the  plaintiff,  because  of  his  being  so  diseased  as 
to  be  unfit  for  the  married  state? 

2.  Was  he  diseased  at  the  time  of  making  his  agreement  with 
the  plaintiff;  and  if  so,  had  he  reason  then  to  believe  that  his  dis- 
ease was  permanent,  or  likely  to  be  of  long  duration? 

This  course  we  pursue  bv  virtue  of  the  example  set  in  Barnes 
v.  Brown,  69  N.  C,  439. 

Per  Curiam.  Judgment  accordingly. 

Where  a  person  by  express  contract  undertakes  to  do  something  which 
afterwards  becomes  impossible,  lie  is  not  discharged,  but  must  answer  in 
damages.  To  this  rule  there  are  three  exceptions:  (1)  Where  the  impossi- 
bility arises  by  operation  of  law:  (2)  where  the  continued  existence  of  the 
subject-matter  is  contemplated:  (3)  where  the  contract  i^  for  personal  serv- 
ices to  be  rendered  onlv  bv  the  nerson  promising.  Tavlor  v.  Caldwell,  32 
L.  J.  Q.  B.,  164,  6  E.  R.'C.,"603:  Beebe  v.  Johnson,  19  Wend..  500,  32  A.  D., 


BY    BREACH.  641 

518;  Cordes  v.  Miller,  39  Mich.,  581,  33  A.  R.,  430;  Dewey  v.  School  Dist,  43 
Mich.,  480,  38  A.  R.,  206;  Huett  &  Smith  Mfg.  Co.  v.  Chic.  Edison  Co.,  167 
111.,  233,  59  A.  S.  R.,  272 ;  Milske  v.  Steiner  Mantel  Co.,  103  Md.,  235,  63  Atl., 
471,  5  L.  R.  A.  (N.  S.),  1105;  Mendenhall  v.  Davis,  52  Wash.;  100  Pac, 
336,  21  L.  R.  A.  (N.  S.),  914;  Taulbec  v.  McCarty,  144  Ky.,  199,  137  S.  W., 
1045,  Ann.  Cas.,  1913  A,  456;  Dermott  v.  Jones,  2  Wall.,  1;  Goodbread  v. 
Wells,  19—476;  West  v.  Hall,  64—43;  Whitlock  v.  Lumber  Co.,  145—120; 
6  R.  C.  L.,  978,  997;  1  Am.  &  Eng.  Encyc,  588;  7  Ibid.,  147;  9  Cyc,  625; 
16  L.  R.  A.,  858;  23  L.  R.  A.,  707;  Clark  Cont.,  472;  Pollock  Cont.  (3d  Ed.), 
523 ;  Page  Cont.,  sec.  1364  et  seq.  In  the  case  of  landlord  and  tenant,  the 
tenant  is  not  liable  for  accidental  damages  to  the  premises,  unless  he  so  con- 
tract. Revisal,  sec.  1992;  and  a  lease  to  repair  will  not  bind  the  lessee  to 
repair  or  rebuild  when  the  house  is  destroyed  or  damaged  to  more  than  half 
the  value,  by  accidental  fire  not  occurring  from  his  negligence.  Ibid.,  sec. 
1985. 


642  DISCHARGE    OF    CONTRACT. 


CHAPTER  IV. 

Discharge  by  Operation  of  Law. 

Sec.  1.    Merger. 

(264)   COSTNER  v.  FISHER, 

104  N.  C,  392,  10  S.  E.,  526-1889. 

The  plaintiff  brought  his  action  before  a  justice  of  the  peace  for 
$135.35,  due  by  account  and  note  under  seal.  When  the  case  came 
on  for  trial  he  entered  a  nolle  prosequi  as  to  the  cause  of  action 
on  the  note.  The  plaintiff  testified  that  the  bond  was  given  for 
the  amount  due  upon  the  account,  and  that  he  accepted  it  on  con- 
dition that  the  defendant  would  pay  him  $10  a  month;  that  the 
bond  was  intended  only  as  security;  and  that  he  did  not  receipt 
the  account.  The  court  held  that  "the  cause  of  action  upon  the 
account  was  merged  into  the  note,  and  that,  the  same  not  being 
due,  the  plaintiff  could  not  recover."  There  was  a  judgment  for 
defendant,  and  plaintiff  appealed. 

Shepherd,  J.  His  Honor  was  clearly  right  in  holding  that  the 
account  was  merged  in  the  bond.  Gibson,  C.  J.,  in  Jones  v.  John- 
son, 3  Watts  &  S.,  277,  says:  "Extinguishment  by  merger  takes 
place  between  debts  of  different  degrees,  the  lower  being  lost  in 
the  higher;  and,  being  by  act  of  the  law,  it  is  dependent  on  no 
particular  intention.  ...  No  expression  of  intention  would 
control  the  law  which  prohibits  distinct  securities  of  different  de- 
grees for  the  same  debt ;  for  no  agreement  would  prevent  an  obli- 
gation from  merging  into  a  judgment  on  it,  or  passing  in  rem  ju- 
dication. Neither  would  an  agreement,  however  explicit,  prevent 
a  promissory  note  from  merging  into  a  bond  given  for  the  same 
debt,  by  the  same  debtor;  for  to  allow  a  debt  to  be  at  the  same 
time  of  different  degrees,  and  recoverable  by  a  multiplicity  of  in- 
consistent remedies,  would  increase  litigation,  unsettle  distinctions, 
and  lead  to  embarrassment  in  the  limitation  of  actions,"  etc.  This 
high  authority  fully  sustains  the  ruling  of  His  Honor. 

Even  if  there  were  no  merger,  the  taking  of  the  bond  payable 
at  a  certain  time  implies  an  agreement  to  suspend  his  remedy  on 
the  account  for  that  period.  2  Daniel  Neg.  Inst.,  sec.  1272 ;  Put- 
nam v.  Lewis,  8  Johns,  304;  Frisble  v.  Larned,  21  Wend.,  450, 
and  other  cases  cited  in  Bank  v.  Bridgers,  98  N.  C,  67,  3  S.  E. 
Rep.,  826.    There  is  No  error. 


BY    OPERATION    OF    LAW.  643 

For  other  cases  of  merger  by  judgment,  see  Gregory  v.  Hooks,  33 — 371 ; 
Ruftv  v.  Claywell,  93 — 306;  Gibson  v.  Smith,  63 — 103;  Walton  v.  Pearson, 
85—34 ;  Grant  v.  Burgwyn,  88—95 ;  Piatt  v.  Potts,  33—266. 

Between  the  parties  to  the  action  the  judgment  is  a  merger  of  the  instru- 
ment sued  on ;  but  as  to  sureties  and  endorsers  not  parties  to  the  action,  is 
not  a  merger.  Bank  v.  Lumber  Co.,  123 — 24;  Hicks  v.  Davis,  68 — 231.  A 
judgment  rendered  upon  a  former  judgment  which  was  docketed  and  a  lien 
on  the  homestead  of  the  debtor,  does  not  merge  the  former  judgment  so  as 
to  lose  the  lien ;  "security  of  higher  nature  extinguishes  inferior  securities, 
but  not  securities  of  an  equal  degree."  Springs  v.  Pharr,  131 — 191.  Where 
a  contract  of  employment  payable  in  installments,  is  broken  by  the  employer, 
the  employee  may  sue  for  installments  due,  but  if  he  omit  one  and  sue  for 
a  later  one,  the  former  is  merged  in  the  judgment ;  but  not  so  as  to  install- 
ments not  due.     Smith  v.  Lumber  Co.,  142—26;   140 — 375. 

Where  there  was  an  oral  contract  for  shipment  which  defendant  failed 
to  comply  with,  and  afterwards  shipment  was  made  for  which  a  bill  of 
lading  was  given,  the  former  contract  is  not  merged  in  the  latter.  Absher 
v.  R.  R.,  108—344;  Hamilton  v.  R.  R.,  96—398.  A  bond  can  not  merge  a 
simple  contract  except  as  to  those  who  are  bound  by  it ;  if  one  give  a  bond 
for  his  simple  contract  it  is  merged ;  but  if  he  gives  a  bond  for  his  own 
bond,  it  is  no  merger ;  so  if  he  give  a  bond  for  the  simple  contract  debt  of 
another.  Spear  v.  Gillett,  16 — 470.  A  promise  made  after  a  covenant  is 
merged,  upon  the  same  ground  that  a  promise  made  before  is  merged,  when 
the  promise  and  the  covenant  are  precisely  the  same,  because  the  covenant, 
being  a  deed,  is  the  surest  and  highest  evidence.  Burnes  v.  Allen,  31 — 370. 
Merger  of  simple  contract  in  specialty,  Horton  v.  Child,  15 — 460.  For  dis- 
cussion generally,  see  3  Page  Cont.,  sees.  1352,  1353 ;  20  Am.  &  Eng.  Encyc, 
596 ;  Mordecai's  Lectures,  850 ;  9  Cyc,  633 ;  6  R.  C.  L.,  920 ;  Pollock  Cont.,  874. 

Sec.  2.    Alteration  of  instrument. 

(265)  LONG  v.  MASON, 

84  N.  C,  15—1881. 

This  was  a  civil  action  upon  a  bond  made  by  defendant's  intes- 
tate as  surety  to  one  John  B.  Kerns,  for  $100,  payable  to  the 
plaintiff  as  guardian  of  T.  M.  Kerns.  The  words  "at  ten  per- 
cent" had  been  written  in  the  left  lower  corner  of  the  bond,  after 
it  had  been  signed  by  both  principal  and  surety,  and  was  done  by 
the  principal,  in  the  absence  of  the  surety  and  without  his  knowl- 
edge or  consent,  and  without  the  knowledge  or  consent  of  plaintiff; 
but  it  was  done  at  the  suggestion  of  the  ward,  who  was  about 
nineteen  years  old.  The  defense  was  that  this  alteration  rendered 
the  bond  void,  and  the  court  so  held,  giving  judgment  for  the  de- 
fendant, and  the  plaintiff  appealed. 

RuFFin,  J.  An  alteration  of  a  bond  in  a  material  part  by  a 
party  to  it,  vacates  the  same,  except  as  to  parties  consenting  there- 
to. Davis  v.  Coleman,  29—424;  Draper  v.  Wood,  112  Mass.,  315. 
An  addition  of  the  words  "interest  at  six  percent,"  written  in  a 
corner  of  a  bond  after  it  had  been  signed,  is  an  alteration  of  it  in 
a  material  particular.  3  Addison  on  Cont.,  sec.  1280.  The  intent 
with  which  the  alteration  is  made  seems,  according  to  the  weight 


644  DISCHARGE    OF    CONTRACT. 

of  authorities,  to  be  immaterial;  but  however  that  may  be,  it  has 
been  decided  by  this  court  in  Dunn  v.  Clements,  52  N.  C,  58,  that 
whenever  a  material  alteration  has  been  made,  a  presumption  of 
fraud  arises,  and  remains  until  rebutted.  There  was  no  evidence 
offered  on  the  trial  to  remove  this  presumption. 

•We  therefore  concur  with  His  Honor  in  the  opinion  that  the  de- 
fendant was  entitled  to  judgment. 

No  error.  Affirmed. 

(266)   MATHIS  v.  MATHIS, 
20  N.  C,  55—1838. 

Daniel,  J.  The  plaintiff  brought  his  warrant  against  the  de- 
fendant "to  answer  in  a  plea  of  debt  of  twelve  50-100  dollars  and 
interest,  due  by  note."  The  defendant  pleaded  "non  est  factum." 
On  the  trial  of  the  issue  it  was  proved  that  the  defendant  executed 
to  the  plaintiff  a  bond  for  $7.50,  which  bond  it  was  alleged  had 
been  altered  by  a  stranger  from  $7.50  to  the  sum  of  $12.50.  The 
plaintiff's  counsel  requested  the  court  to  instruct  the  jury  that  if 
they  were  satisfied  that  the  fact  was  so,  to  find  a  verdict  for  $7.50 
and  interest.  The  court  refused  so  to  charge;  but  told  the  jury 
that  an  alteration  of  a  deed  or  bond  by  a  stranger  in  a  material 
part,  destroyed  the  whole  validity  of  the  instrument,  and  that  the 
jury  were  not  at  liberty  to  render  a  verdict  for  the  true  amount, 
however  clearly  it  might  be  shown. 

The  defendant's  plea  denied  that  he  executed  the  bond  of  $12.50 
as  described  in  the  warrant.  The  plaintiff  replied  that  he  did,  and 
upon  this  issue  the  parties  went  to  trial.  The  plaintiff,  having 
warranted  upon  a  bond  for  $12.50,  can  not  sustain  the  affirmative 
side  of  the  issue  by  showing  that  the  defendant  had  executed  to 
him  a  bond  for  $7.50,  even  if  the  latter  bond  had  never  been 
altered.  His  probata  did  not  correspond  with  his  allegata.  The 
evidence  in  fact  was  inadmissible  to  support  the  plaintiff's  side  of 
the  issue.  But  if  the  plaintiff  had  warranted  upon  a  bond  for 
$7.50,  alleged  to  have  been  destroyed  by  accident,  as  an  excuse  for 
not  making  profert,  his  evidence  then  would  have  been  proper. 
Powers  v.  Wave,  2  Pick.  Rep.,  458.  The  alteration  of  a  deed  or 
bond  in  a  material  part  by  a  stranger  does  not  destroy  any  vested 
rights;  it  only  changes  the  mode  of  proof  of  the  contents  of  the 
bond.  Chitty's  Gen.  Pract,  304;  Byles  on  Bills,  173.  But  the 
plaintiff  did  not  so  warrant,  and  he  is  not,  in  this  warrant  and 
pleadings,  entitled  to  recover  the  sum  of  $7.50,  proved  to  be  due 
on  a  bond  executed  for  a  different  sum  than  the  bond  described 
in  the  warrant. 

Per  Curiam.  Judgment  affirmed. 


BY    OPERATION    OF    LAW.  645 


(267)   BURGESS  v.  BLAKE, 

128  Ala.,  105,  86  A.  S.  R.,  78-1900. 

This  was  a  suit  to  foreclose  a  mortgage,  which  included  certain 
lands  claimed  by  defendant's  wife;  one  of  the  deeds  under  which 
she  claimed  was  written  entirely  in  violet  ink,  and  changes  were 
made  in  black  ink. 

Sharps,  J.  .  .  .  Recognizing  the  principle  as  declared  in 
Sharpe  v.'Orme,  61  Ala.,  263,  that  an  alteration  in  a  deed  will  be 
presumed  to  have  been  made  prior  to  its  execution,  unless  it  be  of 
a  character  to  excite  suspicion  that  it  occurred  afterward,  yet  we 
are  of  opinion,  treating  the  question  as  one  of  fact,  that  this  al- 
teration must,  in  the  absence  of  explanatory  proof,  be  held  to  have 
been  made  after  the  deed  was  executed.  Though  it  may  have  been 
made  by  the  grantor  for  the  purpose  of  conveying  the  additional 
40  acres  and  without  fraudulent  intent,  yet  for  the  lack  of  attes- 
tation of  acknowledgment  which  the  statute  makes  essential  to  a 
conveyance  of  land,  no  title  to  the  added  40  acres  passed. 

Unlike  writings  which  evidence  executory  contracts,  a  deed,  so 
far  as  it  operates  as  a  conveyance,  is  not  avoided  by  alteration. 
Having  accomplished  transmission  of  the  title,  the  grantee  is  not 
devested  of  title  by  alteration  of  the  deed,  however,  its  covenants 
may  be  affected.  The  original  instrument  remains  a  muniment  of 
title,  and  with  or  without  explanation  is  evidence  of  title,  and  may 
be  used  as  such.  The  question  of  its  admissibility  was  well  de- 
cided in  Alabama  State  Land  Co.  v.  Thompson,  104  Ala.,  570,  53 
A.  S.  R.,  80,  16  So.,  440,  where  conflicting  authorities  are  referred 
to  and  discussed.  See,  also,  2  A.  &  E.  Eric,  204 ;  Burnett  v.  Mc- 
Cluey,  78  Mo.,  676.     .     .     . 

For  discussion  of  the  effect  of  alteration  generally,  see  note  to  the  above 
case  in  86  A.  S.  R.,  80.  In  Wicker  v.  Jones,  159-102,  74  S.  E.,  81  40  L.  R. 
A.  (N.  S.),  69,  the  rule  is  stated  as  to  the  presumption  in  favor  of  the  altera- 
tion before  execution :  see  also  Tharp  v.  Jamison,  134  N.  W.,  583,  39  L.  R. 
A.  (N.  S.),  100.  The  distinction  between  executed  and  executory  contracts, 
as  affected  bv  alteration,  is  given  in  Chessman  v.  Whittemore,  23  Pick.,  231. 
In  Martin  v.'Buffaloe,  121—34.  it  was  held  that  an  alteration  made  by  tilling 
up  blanks  in  a  deed,  bv  consent  of  parties,  did  not  invalidate  it,  but  the  bur- 
den of  showing  the  grantor's  consent  was  on  the  grantee.  A  executed  a 
deed  to  B,  and  afterwards  without  A's  knowledge  or  consent  the  name  of  C 
was  substituted  for  B's,  and  the  deed  was  thus  registered;  held,  that  the 
deed  was  void,  Perry  v.  Hacknev,  142—368 ;  and  where  such  change  was  made 
to  defraud  creditors,  the  court  will  not  aid  the  party  to  restore  the  deed. 
Respass  v.  Jones,  102—5.  Where  a  wife  gave  a  mortgage  to  secure  her  hus- 
band's note,  and  without  her  knowledge,  he  "raised"  the  note,  this  made 
the  note  void  as  to  her,  but  the  mortgage  was  good  for  the  original  amount. 
Cheek  v.  Nail.  112—370;  Howell  v.  Coleman,  117—77. 

It  has  been  held  in  some  cases  that  an  alteration  in  an  immaterial  part,  it 
made  by  the  partv  claiming  benefit  under  it,  avoids  the  instrument.  Nun- 
nery v   Cotton,  8—222;  Pullen  v.  Shaw,  14—241;  but  it  is  now  the  rule  that 


646  DISCHARGE    OF    CONTRACT. 

the  alteration  must  be  material.  Smith  v.  Eason,  49—34.  When  the  altera- 
tion affects  the  character  of  the  instrument,  it  is  material.  49 — 34.  Cutting 
off  the  name  of  one  of  the  makers  and  substituting  another  is  a  material 
change.  Davis  v.  Coleman,  29—424.  Adding  the  words  "in  specie"  to  a  note 
in  1865,  was  a  material  alteration.  Darwin  v.  Rippey,  63—318;  an  attempt 
to  retrace  the  name  of  the  obligor  with  ink,  and  a  change  in  one  letter 
which  does  not  change  the  name,  is  immaterial.  Dunn  v.  Clements,  52 — 58. 
Putting  the  name  of  a  subscribing  witness  to  a  bond  is  not  a  material  altera- 
tion. Blackwell  v.  Lane,  20—245;  but  see  Clark  Coi.it.,  481.  Placing  the 
name  of  a  P.  O.  in  S.  C.  where  the  contract  was  made,  is  not  material, 
though  being  a  S.  C.  contract  might  change  the  rate  of  interest.  Houston  v. 
Potts,  64 — 33.  If  the  penalty  is  inserted  in  a  guardian  bond  after  it  is  ex- 
ecuted, it  is  invalid.  Rollins  v.  Ebbs,  137 — 355,  but  on  a  rehearing  in  138 — 
140,  it  was  held  to  be  binding.  The  rule  for  alteration  does  not  apply  to  a 
receipt  unless  it  is  also  a  contract.     Wilson  v.  Derr,  69 — 137. 

For  effect  of  alteration  generally,  see  Clark  Cont.,  479;  2  Am.  &  Eng. 
Encyc,  185;  3  Page  Cont.,  sec.  15*11  et  seq.;  Mordecai's  Lectures,  850;  2 
Cyc,  137 ;  Master  v.  Miller,  4  T.  R.,  320,  2  H.  Bl.,  140,  2  E.  R.  C,  669 ;  6  E. 
R.  C,  615 ;  Pollock  Cont.,  845 ;  1  R.  C.  L.,  966. 

Sec.  3.    By  bankruptcy. 

This  is  regulated  by  statute,  but  the  effect  is  given  in  Parker  v. 
Grant,  91 — 338,  "A  debt  discharged  in  bankruptcy  has  no  longer 
any  legal  existence.  It  is  extinguished  by  the  discharge ;  and  the 
only  instance  in  which  it  has  been  recognized  as  having  any  vital- 
ity is,  when  after  discharge  it  is  held  to  be  a  sufficient  moral  con- 
sideration to  support  a  promise  to  pay  it." 

What  debts  are  discharged. — All  provable  debts  except,  1.  Taxes;  2. 
Liability  for  false  pretense,  malicious  injury,  alimony,  support  of  family, 
seduction  and  criminal  conversation ;  3.  Those  not  duly  scheduled,  unless 
such  creditors  had  notice  of  the  proceeding;  4.  Any  liability  created  by 
fraud,  etc.,  in  any  fiduciary  capacity.  Brandenburg  on  Bankruptcy,  sec. 
418.  Provable  debts  discharged.  Knabe  v.  Hayes,  71 — 109;  Blum  v.  Ellis, 
73—293;  Withers  v.  Stinson,  79—341;  Sumrow  v.  Black,  87—103;  Wall  v. 
Fairley,  77—105;  McMinn  v.  Allen,  67—131;  Elliott  v.  Higgins,  83—459. 
Debts  of  fiduciarv  character  not  discharged.  Calvert  v.  Peebles,  80 — 334 ; 
Shields  v.  Whitak'er,  82—516;  Councill  v.  Horton,  88—222;  Mock  v.  Howell, 
101—443 ;  but  it  can  not  be  enforced  against  the  homestead.  Simpson  v. 
Houston,  97—344;  where  an  officer  made  default  and  gave  his  note  for  the 
amount,  and  judgment  was  taken  on  the  note,  bankruptcy  was  a  discharge. 
Comrs.  v.  Staley,  82—395 ;  in  Arrington  v.  Arrington,  131—143,  it  was  said 
that  a  decree  for  alimony  was  discharged,  but  see  above ;  owelty  of  partition 
is  not  discharged.  Walker  ex  fiarte,  107—340,  but  a  debt  for  purchase-money 
is.  Hoskins  v.  Wall,  77 — 249;  discharge  of  principal  does  not  affect  surety. 
Bank  v.  Simpson,  90—467 ;  but  see  Simpson  v.   Simpson,  80—332. 

An  oral  promise  to  pay  the  debt  after  discharge  was  valid.  Hornthal  v. 
McRae.  67—21;  Fraley  v.  Kelly,  67—78,  79—348,  88—228;  Henly  v.  Lanier, 
75 — 172;  the  promise  must  be  direct  and  unequivocal.  Kull  v.  Farmer,  78 — 
337;  Riggs  v.  Roberts,  85—151;  Shaw  v.  Burney,  86—83.  The  promise  must 
now  be  in  writing.     Revisal,  978. 

Bankruptcy  laws  discharge  the  contract,  while  insolvent  laws  liberate  the 
debtor,  Brandenburg,  sec.  386.  For  discussion  of  subject  generally,  see  16 
Am.  &  Eng.  Encyc,  769,  ct  scq.;  Sturges  v.  Crowninshield,  4  Wheat.,  122; 
Collier  Bankruptcy,  308;  3  R.  C.  L.,  316. 


REMEDIES   FOR   BREACH.  647 


CHAPTER  V. 

Remedies  for  Breach. 

Sec.  1.    By  action  at  law  for  damages. 

(268)  EEWARK  v.  RAILROAD  CO., 

137  N.  C,  383,  49  S.  E.,  882—1905. 

Action  for  damages  for  failure  to  deliver  ice.  Judgment  for 
the  plaintiffs  for  less  than  they  demanded;  they  appealed. 

Brown,  J.  On  November  14,  1902,  the  plaintiffs  had  shipped 
from  Norfolk,  Va.,  to  themselves  at  Church  Island,  N.  C,  two 
tons  of  ice  over  the  defendant's  line.  The  ice  was  never  delivered, 
although  by  due  course  it  would  have  reached  Church  Island  the 
same  day  it  was  shipped.  It  was  admitted  the  plaintiffs  were 
dealers  in  fish  and  desired  the  ice  for  their  own  use. 

The  sole  exception  in  the  record  presents  the  question  as  to  the 
measure  of  the  damage.  His  Honor  in  the  court  below  charged 
the  jury  that  the  measure  of  damages  was  the  value  of  the  ice  at 
Church  Island  on  November  14,  1902.  To  this  instruction  the 
plaintiffs  excepted.     We  find  no  error  in  the  instruction. 

The  general  rule  for  the  measure  of  damages  is  tersely  stated  in 
Ashe  v.  DeRosset,  50  N.  C,  299 :  "When  one  violates  his  contract 
he  is  liable  only  for  such  damages  as  are  caused  by  the  breach,  or 
such  as  being  incidental  to  the  act  of  omission  or  commission,  as 
the  natural  consequence  thereof,  may  reasonably  be  presumed  to 
have  been  in  the  contemplation  of  the  parties  when  the  contract 
was  made."  In  the  well-known  case  of  Hadley  v.  Baxendale,  9 
Exc,  341,  the  plaintiff  sought  to  recover  damages  which  grew  out 
of  the  special  circumstances  under  which  the  contract  was  made, 
i.  c,  the  stopping  of  plaintiff's  mill  in  consequence  of  the  non- 
delivery of  a  shaft  which  was  necessary  to  and  ordered  for  its 
operation.  This  was  refused,  and  the  court  says  in  respect  to  it : 
"If  the  special  circumstances  under  which  the  contract  was  made 
were  communicated  to  the  defendant  and  thus  known  to  both  par- 
ties, the  damages  resulting  from  the  breach  of  such  contract,  which 
they  would  reasonably  contemplate,  would  be  the  amount  of  in- 
jury which  would  ordinarily  follow  from  a  breach  of  contract  in 
the  special  circumstances  so  known  and  communicated.  But,  on 
the  other  hand,  if  these  special  circumstances  were  unknown  to  the 
party  breaking  the  contract,  he  at  most  could  only  be  supposed  to 


548  DISCHARGE    OF    CONTRACT. 

have  had  in  contemplation  the  amount  of  injury  which  would 
arise  generally  and,  in  the  great  number  of  cases,  not  affected  by 
any  special  circumstances,  from  such  a  breach  of  contract."  See 
also  Boyle  v.  Reeder,  23  N.  C,  607;  Foard  v.  Railroad,  53  N.  C, 

235. 

The  plaintiff's  contention  is  that  the  measure  of  damages  is  the 
loss  on  fish.  Such  damages  are  too  remote  and  could  not  have 
reasonably  been  within  the  contemplation  of  the  defendant  com- 
pany when  it  accepted  the  ice  for  shipment.  If  everyone  were  an- 
swerable for  all  the  consequences  of  his  acts,  no  one  could  tell 
what  were  his  liabilities  at  any  moment."  3  Parsons  on  Contracts 
(5  Ed.),  179.  "Every  defendant  shall  be  liable  for  those  conse- 
quences which  might  have  been  foreseen  and  accepted  as  a  result 
of  his  conduct,  and  not  for  those  he  could  not  have  foreseen,  and 
therefore  under  no  moral  obligation  to  take  into  his  consideration." 

Ibid.,  180. 

When  the  defendant  accepted  the  ice  at  Norfolk  for  shipment  it 
could  not  foresee  that  the  plaintiff's  fish  would  be  spoiled  or  that 
the  ice  could  be  used  for  packing  fish.  The  defendant  did  not 
know  that  the  plaintiff  had  any  fish  at  the  time  the  ice  was 
shipped.  Nor  is  there  any  evidence  that  the  defendant  knew  it  at 
any  time. 

If  the  plaintiffs  had  shown  by  evidence  that  the  defendant  knew 
or  should  have  known  from  facts  and  circumstances  connected 
with  the  shipment,  or  otherwise,  that  the  ice  was  intended  by  the 
plaintiffs  for  packing  fish,  the  plaintiffs  would  have  brought  their 
case  within  the  exception  to  the  general  rule. 

We  have  examined  the  evidence  with  care  and  fail  to  find  any 
which  could  reasonably  bring  to  the  defendant's  knowledge  the 
fact  that  the  shipment  was  other  than  an  ordinary  shipment.  It 
had  no  knowledge  of  the  special  purpose. 

Neal  v.  Hardware  Co.,  122  N.  C,  104,  pressed  upon  our  atten- 
tion by  the  plaintiff's  counsel  in  his  brief  and  oral  argument,  dif- 
fers materially  from  the  case  at  bar.  Tobacco  flues  are  different 
commodities.  Ice  is  something  of  general  everyday  use  all  the 
year  round  and  required  for  many  different  purposes.  Persons  in 
localities  -where  tobacco  is  cultivated  are  presumed  to  know  what 
a  tobacco  flue  is  intended  for,  and  if  tobacco  is  not  cured  promptly 
when  cut,  serious  loss  will  result. 

Tn  Sledge  v.  Reid,  73  N.  C,  440,  Mr.  Justice  Bynum  says: 
"The  loss  of  the  crop,  though  following  the  loss  of  the  mule,  was 
neither  a  necessary  nor  natural  consequence.  .  .  .  The  value  of 
the  mult-  taken  and  the  hire  of  another  is  the  measure  of  the  plain- 
tiff's damage.  Anything  beyond  this  would  be  too  remote  and 
conjectural,   and   would   lead  the  courts  into  a  boundless  field  of 


REMEDIES  FOR  BREACH.  649 

investigation."  See  also  Wood's  Mayne  on  Damages,  sees.  26  and 
40.  It  is  useless  to  multiply  authorities,  as  the  measure  of  dam- 
ages in  contracts  for  the  sale  and  delivery  of  personal  property  has 
been  discussed  in  many  cases  in  the  recent  reports  of  this  court, 
and  we  find  nothing  in  any  of  them  to  support  the  plaintiff's  con- 
tention. The  judgment  of  the  Superior  Court  is  Affirmed. 
Connor,  J.,  concurs  in  result. 

(269)  MACE  v.  RAMSEY, 

74  N.  C,  11—1876. 

Civil  action  on  contract.  Defendant  contracted  to  furnish  plain- 
tiff a  flatboat  and  hands  to  transport  a  party  of  excursionists,  and 
failed  to  furnish  the  boat.  The  price  agreed  on  was  $4  a  day,  the 
usual  price.  There  was  a  verdict  and  judgment  for  the  plaintiff 
for  $210  as  damages,  and  the  defendant  appealed. 

Bynum,  J.  The  terms  of  the  contract  were  disputed  and  it  was 
left  to  the  jury  to  ascertain  what  was  the  contract.  Their  finding 
establishes  that  it  was  unconditional  and  as  follows:  On  the  5th 
of  July,  1873,  the  defendant  contracted  with  the  plaintiff  to  fur- 
nish a  flatboat  and  hands,  on  the  morning  of  the  16th  of  July  for 
the  plaintiff's  use  on  the  16th,  17th  and  18th  of  July  to  transport 
passengers,  or  excursionists  from  Morehead  City  to  Beaufort,  and 
different  points  about  the  harbor,  an  excursion  train  being  ex- 
pected at  Morehead  on  the  morning  of  the  16th  of  July.  The 
price  agreed  upon  for  the  use  of  the  boat  was  $4  per  day.  The 
boat  was  not  furnished,  and  the  question  was  as  to  the  amount  of 
damages  the  plaintiff  was  entitled  to  recover. 

As  evidence  of  his  damages  the  plaintiff  offered  to  prove  that 
an  excursion  train  was  expected  to  arrive  with  a  large  number  of 
excursionists  at  Morehead  City  on  the  morning  of  the  16th  of 
July,  and  that  the  plaintiff  had  engaged  passengers  for  this  and  his 
other  boats,  and  had  received  money  to  the  amount  of  $600,  which 
he  was  compelled  to  refund. 

The  defendant  objected  to  the  admission  of  this  evidence,  and 
the  court  rejected  so  much  of  it  as  related  to  the  receipt  and  re- 
payment of  the  $600,  but  admitted  so  much  as  related  to  the  ex- 
cursion for  the  purpose  of  showing  that  the  plaintiff  had  engaged 
passengers  enough  for  this  and  his  other  boats. 

The  defendant  asked  the  court  to  give  the  jury  the  following 
special  instructions : 

1.  That  the  damages  should  not  exceed  the  trouble  and  expense 
of  hiring  such  a  boat  as  the  defendant's  at  Morehead  City  wharf, 
on  the  arrival  of  the  party. 

2.  That  he  could  recover  only  such  amount  as  would  cover  the 


650  DISCHARGE    OF    CONTRACT. 

loss  he  would  have  suffered,  in  a  fair  competition  that  morning 
with  other  boats  for  the  public  patronage,  irrespective  of  the  fore- 
stalling resorted  to  by  him,  in  the  previous  engagement  of  pas- 
sengers. 

3.  That  the  damage  should  be  measured  by  an  indemnity  for  the 
moneys  actually  expended,  and  a  reasonable  compensation  for  work 
and  services  performed  in  preparing  for  transportation  of  pas- 
sengers. 

The  court,  without  responding  to  each  instruction  asked  for, 
gave  a  general  charge  to  this  effect :  The  measure  of  the  damages 
would  be  only  what  a  boat  like  the  defendant's  would  be  worth  at 
such  a  time,  if  they  were  satisfied  that  the  defendant  knew  of  the 
excursion  and  the  use  the  plaintiff  intended  to  put  the  boat  to; 
as  the  damages  must  be  such  as  were  in  the  reasonable  contem- 
plation of  the  parties  at  the  time  the  contract  was  entered  into ; 
that  the  defendant  was  not  liable  for  more  than  the  ordinary  earn- 
ings of  the  boat  on  such  occasions,  and  to  arrive  at  that  they  could 
consider  the  capacity  of  the  boat,  the  state  of  the  weather  and  the 
tide,  as  well  as  the  evidence  that  the  plaintiff  had  engaged  enough 
passengers  for  this  and  his  other  boats. 

We  think  these  instructions  are  as  favorable  to  the  defendant  as 
he  could  ask,  and  are  responsive  to  his  prayer  for  instructions. 
It  is,  however,  contended  by  his  counsel  in  this  court  that  the  rule 
of  damages  laid  down  by  His  Honor  is  incorrect,  in  that  it  author- 
ized the  jury  to  assess  damages  too  remote  in  law.  In  answer  to 
this  it  is  to  be  observed  that  His  Honor  substantially  followed  the 
rule  laid  down  by  this  court  in  Ashe  v.  DeRosset,  50  N.  C,  299: 
"Where  one  violates  his  contract  he  is  liable  only  for  such  dam- 
ages as  are  caused  by  the  breach,  or  such  as  being  incident  to  the 
act  of  omission  or  commission  as  a  natural  consequence  thereof, 
may  reasonably  be  presumed  to  have  been  in  the  contemplation  of 
the  parties  at  the  time  the  contract  was  made."  No  safer  rule  than 
this  has  yet  been  discovered  by  which  to  distinguish  proximate 
damages,  which  may  be  recovered,  from  remote  damages  which 
may  not  be,  in  an  action  for  breach  of  contract.  General  rules  are 
in  abundance  for  estimating  damages  for  breach  of  contract,  as 
that  "the  amount  should  be  what  would  have  been  received  if  the 
defendant  had  kept  his  contract."  Alden  v.  Keighly,  15  M.  &  W., 
117.  Or  "when  a  party  sustains  loss  by  reason  of  a  breach  of 
contract,  he  is,  so  far  as  money  can  do  it,  to  be  placed  in  the  same 
situation  with  respect  to  damages,  as  if  the  contract  had  been  per- 
formed." Robeson  v.  Harman,  1  Ex.,  chs.  855-6.  Or,  "the  true 
measure  of  damages  is  that  which  will  completely  indemnify  the 
plaintiff  for  the  breach  of  the  engagement."  Shepherd  v.  John- 
son, 2  East.,  210.     All  will  concede  these  to  be  sound  equitable 


REMEDIES    FOR    BREACH. 


651 


principles,  but  most  cases  of  contract  vary  from  each  other,  and 
whatever  general  rules  there  may  be  for  awarding  damages,  they 
must  be  modified  by  the  particular  cases  to  which  they  come  to  be 
applied.  None  of  the  above  rules  afford  a  criterion  for  discrimi- 
nating between  remote  and  proximate  damages,  and  to  meet  our 
case,  which  turned  upon  the  distinction,  a  more  specific  instruc- 
tion was  required  to  restrain  the  jury  from  considering  remote  and 
conjectural  loss  on  the  one  hand,  and  on  the  other  allowing  them 
to  estimate  the  actual  loss  which  followed  as  an  immediate  and 
necessary  consequence  of  the  breach  of  contract. 

It  was  a  special  occasion,  and  the  contract  was  made  solely  in 
reference  to  that  occasion,  and  so  made  known  to  the  defendant  at 
the  time  of  the  contract.  An  excursion  train  with  a  large  number 
of  passengers  seeking  amusement  or  recreation  at  a  summer  resort, 
was  expected  at  Morehead  City  on  the  morning  of  the  16th  of 
July,  and  to  remain  for  three  days  in  the  vicinity.  The  plaintiff 
undertook  to  provide  boats  for  their  accommodation,  and  did  en- 
gage this  boat  and  passengers  to  fill  it.  The  immediate  and  neces- 
sary consequence  of  the  failure  of  the  defendant  to  furnish  the 
boat  was  the  loss  to  the  plaintiff  of  the  fares  of  the  passengers  en- 
gaged  by   him    for  the   trip   to    Beaufort,   and   excursions    in   the 

harbor. 

The  contract  was  thus  for  a  specific  occasion  and  specific  pur- 
pose, and  the  damage  immediately  and  necessarily  follows  the 
breach,  and  was  reasonably  contemplated  by  both  parties.  The 
amount  of  damage  incurred  was  a  question  for  the  jury.  The  de- 
fendant, had  the  fact  been  so,  could  have  shown  in  mitigation  that 
the  plaintiff  hired,  or  could'  have  hired,  other  boats  in  place  of  his, 
but  he  failed  to  do  so,  and  we  must  assume  that  the  plaintiff  did 
not  provide,  and  could  not  reasonably  have  provided,  a  substitute 
for  this  boat.  The  actual,  immediate  and  necessary  loss  was  for 
the  jury,  and  if  excessive  damages  were  rendered  by  their  verdict, 
as  it  rather  appears  to  us  was  the  case,  the  remedy  was  by  an  ap- 
plication to  the  judge  trying  the  case  for  a  new  trial,  because  of 
excessive  damages  assessed  by  the  jury.  This  court  is  precluded 
from  interfering  with  the  action  of  the  court  below  in  matters 
solely  within  their  discretion. 

This  case  is  easily  distinguished  from  Foard  v.  Railroad  Com- 
pany, 53  N.  C,  235 ;  Ashe  v.  DeRosset,  53  N.  C,  241 ;  Boyle  v. 
Ruder,  23  N.  C,  607,  and  Sledge  v.  Reid,  73  N.  C.  Rep;,  440, 
and  similar  cases,  in  that,  in  those  cases  the  damage  was  accidental 
and  unforeseen,  or  merely  vague,  uncertain  and  conjectural;  and 
in  this  they  are  immediate,  necessary  and  reasonably  certain,  and 
such  as  were  in  the  contemplation  of  the  parties  to  the  contract. 

There  is  no  error. 


652  DISCHARGE    OF    CONTRACT. 

Fo'-  other  cases  giving  measure  of  damages,  see  Crawford  v.  Geiser  Co., 
88_554;  Heiser  v.  Meares,  120—443;  Buff  kin  v.  Baird,  73—283;  Gifford  v. 
Betts,  64—62;  Tanning  Co.  v.  Tel.  Co.,  143—376. 

The  rule  for  damages  in  Hadley  v.  Baxendale  is,  that  the  injured  party 
is  entitled  to  such  damage  as  "may  fairly  and  reasonably  1>e  considered, 
either  arising  naturally,  that  is,  according  to  the  usual  course  of  things,  from 
such  breach  of  contract  itself,  or  such  as  may  reasonably  be  supposed  to 
have  been  in  the  contemplation  of  the  parties,  at  the  time  the  contract  was 
made,  as  the  probable  result  of  it;"  if  special  circumstances  are  known  to 
both  parties,  they  are  supposed  to  contemplate  the  injury  which  would  rea- 
sonably follow  from  a  breach  under  such  circumstances.  Ashe  v.  DeRos- 
settj  50—299;  Spencer  v.  Hamilton,  113-49;  Xeal  v.  Hardware  Co.,  122 — 
104;  Herring  v.  Armwood,  130—177;  Critcher  v.  Porter,  135—548;  Van 
Lindley  v.  R.  R.,  88—547;  Williams  v.  Tel.,  136—82;  Owen  v.  Meroney, 
136—475;  Hancock  v.  Tel.  Co.,  142—163;  Tillinghast  v.  Cotton  Mill,  143— 
268;  Lambert  v.  Express  Co.,  146—321;  Davenport  v.  R.  R.,  147—503;  Furn. 
Co.  v.  Express  Co.,  148—87;  Sloan  v.  Hart,  150—269;  Lumber  Co.  v.  R.  R., 
151—23;  Brown  v.  R.  R.,  154—300;  Peanut  Co.  v.  R.  R.,  155—148;  Penn  v. 
Tel.  Co.,  159—306;  Lumber  Co.  v.  Mfg.  Co.,  162—395;  Underwood  v.  Car 
Co.,  166—458.  In  breach  of  contract  by  defect  in  engine  furnished,  special 
damage  may  be  recovered,  as  for  idle  labor,  etc.,  where  the  delay  is  caused 
by  the  defendant,  Kester  v.  Miller,  119—475.  In  breach  of  contract  by  not 
delivering  corn  to  be  ground  at  plaintiff's  mill,  the  measure  is  the  difference 
between  the  cost  of  grinding  and  the  contract  price,  Oldham  v.  Kerchner, 
79_106,  81—430.  For  delay  in  delivering  goods,  the  damage  is  the  differ- 
ence in  the  market  value  at  the  time  delivered  and  when  they  should  have 
been  delivered.  Spiers  v.  Halstead,  74 — 620;  Hosiery  Co.  v.  Cotton  Mills, 
140—452;  Berbarry  v.  Tombacher,  162—497;  and  if  no  difference,  then  in- 
terest on  the  money  invested.  Mills  v.  R.  R.,  119—693;  Lee  v.  R.  R.,  136— 
522;  5  Am.  &  Eng.  Encyc,  384.  In  the  delay  to  transport  melons,  the  dam- 
age was  the  value  at  destination,  although  the  bill  of  lading  stipulated  the 
value  at  place  of  shipment  as  the  measure.  McConnell  v.  R.  R..  144—87. 
In  breach  of  contract  for  sale  of  coal,  partly  performed,  the  seller  may  re- 
cover for  amount  sold  and  damages  for  the  breach.  Coal  Co.  v.  Ice  Co., 
134 — 574.  For  defect  in  article,  difference  in  value  as  received  and  as  it 
should  have  been.  Parker  v.  Fenwick,  138—209;  Mfg.  Co.  v.  Oil  Co.,  150— 
150.  For  explanation  of  nominal,  actual  and  exemplary  damages,  see  Hocutt 
v.  Tel.  Co.,  147— p.  191. 

Profits  and  speculative  damages. — For  breach  of  contract  to  exhibit  a 
certain  machine,  plaintiff  mav  recover  costs  and  expenses,  but  not  for  pros- 
pective sales.  Machine  Co.  v.  Tobacco  Co.,  141—284;  144—421.  Loss  of 
profits  can  not  be  considered  unless  the  circumstances  are  known  to  the 
other  party;  the  damage  must  be  the  proximate  result  and  not  the  remote 
effect.  Jones  v.  Call,  96—337;  Kester  v.  Miller,  119—476;  Tompkins  v. 
Cotton  Mills,  130—347;  Lumber  Co.  v.  Iron  Works,  130—584;  Sharpe  v.  R. 
R.,  130—613;  Critchter  v.  Porter,  135—542;  Allen  v.  Tompkins,  136—210; 
Johnson  v.  R.  R.,  140—574;  Mfg.  Co.  v.  Machine  Works,  144—689;  Hawk  v. 
Lumber  Co.,  149—10;  Wilkinson  v.  Dunbar,  149—20;  Bell  v.  Machine  Co., 
150—111;  Coles  v.  Lumber  Co.,  150—183;  Steel  Co.  v.  Copeland,  159—556; 
Wells  v.  Nat  L.  Association,  99  Fed.,  222,  53  L.  R.  A.,  33.  Where  defend- 
ant sold  seed  rice  to  plaintiff,  which  failed  to  come  up,  plaintiff  could  recover 
the  price  paid  for  the  rice,  the  expense  of  preparing  the  ground  and  plant- 
ing, and  it  being  too  late  for  another  crop,  a  reasonable  rent  for  the  land, 
to  be  diminished  by  anything  the  defendant  may  show  that  the  plaintiff 
might  have  made  out  of  the  land.  Riger  v.  Worth,  127 — 230 ;  52  L.  R.  A., 
362,  and  cases  cited ;' Leonard  Seed  Co.  v.  Crary  Canning  Co.,  147  Wis.,  166, 
132  N.  W.,  902,  37  L.  R.  A.  (N.  S.),  85. 

Plaintiff  must  use  reasonable  diligence  to  prevent  loss,  and  if  no  loss  fol- 
lows the  breach  he  is  entitled  to  nominal  damages.  Hassard-Short  v.  Hardi- 
son,  114—482;  State  v.  Skinner,  25—564;  Mfg.  Co.  v.  Machine  Works,  144— 
689;  Bowen  v.  King,  146— p.  391;  Fertilizer  Co.  v.  McLawhorn,  158—274. 


REMEDIES  FOR  BREACH.  653 

In  telegraph  cases  mental  anguish  may  be  considered  as  an  element  of 
damage  in  some  States.  Young  v.  Tel.  Co.,  107 — 370;  Green  v.  Tel.  Co., 
136—489;  Mord.  &  Mc.  Rem.,  403-405.  It  is  sometimes  said  that  in  such 
cases  the  action  must  be  in  contract  rather  than  in  tort,  since  the  nature  of 
the  message  indicates  that  peculiar  damage  will  result,  but  in  N.  C.  it  is 
held  that  the  action  may  be  in  tort  or  in  contract.  Thomason  v.  Hackney, 
159—299;  Penn  v.  Tel.,  159—306. 

Punitive  damages  will  not  be  allowed  for  breach  of  contract,  except  in 
breach  of  promise  of  marriage.  Richardson  v.  R.  R.,  126 — 100;  Allen  v. 
Baker,  86—91;  Baumle  v.  Verde,  124  Pac,  1083,  41  L.  R.  A.  (N.  S.),  846. 
For  damages  generally,  see  8  R.  C.  L.,  427,  442,  455,  492;  13  Cyc,  17,  32, 
39,  49,  71. 

Sec.  2.     Specific  performance. 
(270)   PADDOCK  v.  DAVENPORT, 
107  X.  C,  710,  12  S.  E.,  464—1890. 
The  facts  in  this  case  are  given  in  (24)  ante. 

Shepherd,  J.  .  .  .  The  second  cause  of  action  is  for  specific 
performance,  both  against  Davenport,  who  executed  the  contract, 
and  Thrash,  who  purchased  of  him  with  notice  of  the  claim  of 
the  plaintiff. 

The  true  principle  upon  which  specific  performance  is  decreed 
does  not  rest,  in  all  cases,  simply  upon  a  mere  arbitrary  distinc- 
tion as  to  different  species  of  property,  but  it  is  founded  upon  the 
inadequacy  of  the  legal  remedy  by  way  of  pecuniary  damages. 
This  principle  is  acted  upon  (1)  where  there  is  a  peculiar  value 
attached  to  the  subject  of  the  contract  which  is  not  compensable 
in  damages.  The  law  assumes  land  to  be  of  this  character  "simply 
because"  (says  Pearson,  J.,  in  Kitchen  v.  Herring,  42  N.  C,  191), 
"it  is  land,  a  favorite  and  favored  subject  in  England  and  every 
country  of  Anglo-Saxon  origin."  The  law  also  attaches  a  peculiar 
value  to  ancient  family  pictures,  titles,  deeds,  valuable  paintings, 
articles  of  unusual  beauty,  rarity  and  distinction,  such  as  objects 
of  virtu.  A  horn,  which  time  out  of  mind  had  gone  along  with 
an  estate,  and  an  old  silver  patera,  bearing  a  Greek  inscription 
and  dedicated  to  Hercules,  were  held  to  be  proper  subjects  of  spe- 
cific performance.  These,  said  Lord  Eldon,  turned  upon  the  pre- 
tium  affectionis,  which  could  not  be  estimated  in  damages.  So  for 
a  faithful  slave,  endeared  by  a  long  course  of  service  or  early  as- 
sociation, Chief  Justice  Taylor  remarked  that  "no  damages  can 
compensate ;  for  there  is  no  standard  by  which  the  price  of  the 
affections  can  be  adjusted  and  no  scale  to  graduate  the  feelings  of 
the  heart."     Williams  v.  Howard,  7  N.  C,  74. 

This  principle  is  also  applied  (2)  where  the  damages  at  law  are 
so  uncertain  and  unascertainable,  owing  to  the  nature  of  the  prop- 
erty or  the  circumstances  of  the  case,  that  a  specific  performance 


654  DISCHARGE    OF    CONTRACT. 

is  indispensable  to  justice.  Such  was  formerly  held  as  to  the 
shares  in  a  railroad  company,  which  differ,  it  was  said,  from  the 
funded  debt  of  the  government  in  not  always  being  in  the  market 
and  having  a  specific  value.  Also  a  patent  (34  Conn.,  325),  and 
a  contract  to  insure  (4  Sanf.,  ch.  408),  and  like  cases.  The  gen- 
eral principle  everywhere  recognized,  however,  is  that  except  in 
cases  falling  within  the  foregoing  principles,  a  court  of  equity  will 
not  decree  the  specific  performance  of  contracts  for  personal  prop- 
erty; "for,"  remarks  Pearson,  J.,  in  Kitchen  v.  Herring,  supra, 
"if  with  money  an  article  of  the  same  description  can  be  bought 
.  .  .  the  remedy  at  law  is  adequate."  See  also  Pomeroy  Spec. 
Perf.,  14. 

Applying  these  principles  to  the  facts  alleged  in  the  complaint, 
it  must  follow,  we  think,  that  this  is  not  a  case  which  calls  for  the 
exercise  of  the  equitable  power  of  the  court.  The  trees  were  pur- 
chased with  a  view  to  their  severance  from  the  soil  and  thus  be- 
ing converted  into  personalty.  It  is  not  shown  that  they  have  any 
peculiar  value  to  the  plaintiff,  nor  does  there  appear  any  circum- 
stance from  which  it  may  be  inferred  that  the  breach  of  the  con- 
tract may  not  be  readily  compensated  for  in  damages.  Neither  is 
it  shown  that  other  trees  may  not  be  purchased,  but  it  is  simply 
alleged  that  they  are  scarce  at  the  contract  price.  The  simple  fact 
that  they  are  near  a  watercourse  does  not  alter  the  case,  for  the  con- 
veniences of  transportation  are  elements  which  may  be  considered 
in  the  estimation  of  damages.  Neither  is  the  circumstance  that 
the  plaintiff  purchased  a  "few  trees  of  like  kind"  in  the  vicinity, 
sufficient  to  warrant  the  equitable  intervention  of  the  court.  We 
can  very  easily  conceive  of  cases  in  which  contracts  of  this  kind 
may  be  specifically  enforced,  but  we  can  see  nothing  in  this  com- 
plaint which  calls  for  such  extraordinary  relief.  The  ruling  of  the 
court,  as  to  this  branch  of  the  case,  is  sustained. 

Specific  performance  is  not  a  strict  right  of  the  party,  hut  rests  in  the 
sound  discretion  of  the  court,  to  determine  whether  or  not  it  should  lie 
granted,  Herren  v.  Rich,  95 — 500;  Boles  v.  Caudle,  133 — 528.  It  is  a  purely 
equitahie  remedy,  and  the  essentials  as  given  in  Adams  Equity,  77,  are:  (1) 
The  contract  must  he  for  a  valuahle  consideration:  (2)  the  mutual  enforce- 
ment must  he  practicahle,  that  is,  something  that  the  defendant  can  do.  and 
the  court  can  enforce:  (3)  it  must  he  necessary,  that  is,  important  to  the 
plaintiff,  and  not  oppressive  to  the  defendant.  See  May  v.  Getty,  140 — 310 ; 
Timber  Co.  v.  Wilson,  151—154:  Rudisill  v.  Whitener.  146 — 403;  Cuddee  v. 
Rutter,  1  P.  Wms.,  570,  6  E.  R.  C,  640 ;  Mord.  &  Mc.  Rem.,  608 ;  specific  per- 
formance mav  also  he  granted  with  compensation  for  defects.  Bethell  v. 
McKinnev,  164—71:  Mord.  &  Mc.  Rem.,  313;  Bisph.  Eq.,  sec.  388;  Jovner 
v.  Crisp,   158—199. 


REMEDIES  FOR  BREACH.  655 

Sec.  3.     By  injunction. 

COWAN  v.  FAIRBROTHER, 
118  N.  C,  486,  ante  (167). 

This  is  an  indirect  way  of  obtaining  specific  performance  by  restraining 
the  defendant  from  breaking  his  contract.  Harris  v.  Theus,  149  Ala.,  133, 
43  So.,  131,  10  L.  R.  A.  (N.  S.),  204,  Rem.,  710;  Phila.  Ball  Club  v.  Lajoie, 
202  Pa.,  210,  51  Atl.,  973,  58  L.  R.  A,  227,  Rem.,  712;  Lumley  v.  Wagner,  21 
L.  J.  Ch..  898,  6  E.  R.  €.,  652 ;  Guilford  v.  Porter,  167—366. 

Sec.  4.     Discharge  of  right  of  action  for  breach. 

1.    By  release. 

(271)   STINSON  v.  MOODY, 
48  N.  C.  53—1855. 

The  plaintiff  declared  on  a  bond  of  $258,  to  make  title  to  a  cer- 
tain tract  of  land.  The  defendant  pleaded  general  issue,  condi- 
tions performed,  and  a  release  since  the  last  continuance.  To  sus- 
tain the  plea  of  "release,"  the  defendant  introduced  a  writing 
under  seal,  beginning  "Contract,  compromise,  and  reconveyance 
between  W.  R.  Stinson  and  A.  S.  Moody,"  in  which  Stinson  agrees 
to  dismiss  his  suit  against  Moody,  and  pay  the  cost ;  to  sell  to 
Moody  the  land  for  which  he  held  bond  for  title,  "which  title  bond 
the  said  Stinson  agrees  and  binds  himself  to  surrender  and  deliver 
up  to  said  Moody." 

His  Honor  charged  the  jury  that  the  deed  offered  in  evidence 
did  not  sustain  the  plea  of  release.  Judgment  for  plaintiff,  and 
defendant  appealed. 

BatteE,  J.  (After  discussing  the  question  of  payment  in- 
volved.) The  last  objection  urged  against  the  plaintiff's  right  to 
recover  is  of  a  different  character,  and  we  are  unable  to  discover 
any  ground  upon  which  it  can  be  resisted.  We  lay  no  stress  upon 
that  part  of  the  instrument  pleaded  puis  darcin  continuance,  which 
purports  to  be  a  reconveyance  of  the  plaintiff's  interest  in  the  land, 
but  we  do  not  see  how  the  agreement  under  seal  to  dismiss  the 
suit,  pay  the  costs,  and  surrender  the  bond  sued  upon,  can  be  con- 
strued to  be  anything  else  than  a  release.  A  release  is  said  to  be 
"when  a  man  quits  or  renounces  that  which  he  before  had."  7 
Com.  Dig.  Tit.  Release,  Letter  A.  It  may  be  by  express  words,  or 
by  act  in  law.  When  it  is  by  express  words,  it  does  not  require 
any  particular  word ;  so  that  "remise,"  "quitclaim,"  "renounces," 
"acquits,"  etc.,  will  have  the  same  effect  as  the  word  "release." 
Co.  Lit.,  264b.     If  lessor  grants  that  his  lessee  shall  be  discharged 


656  DISCHARGE    OF    CONTRACT. 

of  his  rent,  this  amounts  to  a  release  of  the  rent.  So,  if  a  man 
acknowledges  himself  to  be  satisfied  and  discharged  of  all  bonds, 
etc.,  by  the  obligor,  it  amounts  to  a  release  of  the  bond.  So,  if 
one  covenant  that  he  will  never  sue  for  a  debt,  this  amounts  to  a 
release.  See  7  Com.  Dig.,  ubi  supra,  and  the  cases  there  cited.  In 
Dean  v.  Newhall,  8  Term  Rep.,  168,  it  was  decided  that  where  an 
obligee  covenanted  not  to  sue  one  of  two  joint  and  several  obligors, 
and  that  if  he  did,  the  deed  of  covenant  might  be  pleaded  in  bar, 
he  might  sue  the  other  obligor.  But  it  was  said,  in  the  same  case, 
that  a  covenant  not  to  sue  a  single  obligor  might  be  pleaded  as  a 
release,  to  avoid  a  circuity  of  action.  This  principle  must  neces- 
sarily embrace  our  case.  An  agreement  under  seal  to  dismiss  a 
suit  then  pending,  to  pay  the  cost,  and  to  surrender  up  the  bond 
upon  which  the  action  is  brought,  must,  to  avoid  circuity  of  action, 
be  construed  to  be  a  release  of  the  action.  The  judgment  of  the 
court  below  is  reversed,  and  venire  de  novo  awarded. 

See  Adams  v.  Battle,  125—152;  May  v.  Getty.  140—310;  Lowe  v.  Weath- 
erly,  20 — 353.  For  fraud  and  mistake  in  release,  see  Bean  v.  R.  R.,  107— 
731;  Wright  v.  R.  R.,  125—1;  Boutten  v.  R.  R.,  128—337;  Dorsett  v.  Mfg. 
Co.,  131—254;  Moore  v.  Casualty  Co.,  150—153;  Pollock  Cont,  812;  34 
Cyc,  1045. 

2.    Accord  and  satisfaction. 

(272)   ELAM  v.  BARNES, 

110  N.  C,  73,  14  S.  E.,  621—1892. 

Clark,  J.  .  .  .  Upon  looking  into  the  pleadings,  we  find 
that  the  complaint  alleged  the  purchase  of  certain  tobacco  by  the 
plaintiff  of  the  defendant,  which  the  latter  afterward  refused  to 
deliver,  whereupon  the  plaintiff  took  out  claim  and  delivery  pro- 
ceedings, and  while  under  such  proceedings  the  tobacco  was  in  the 
sheriff's  hands,  the  complaint  alleges  that  the  defendant  made  an 
offer  to  the  plaintiff  to  settle  the  matter  on  a  specific  basis,  "and 
that  all  matters  in  the  controversy  between  them  should  be  thereby 
settled."  It  is  further  alleged  that  the  plaintiff  accepted  the  offer, 
and  that  the  terms  thereof  were  fully  complied  with.  Notwith- 
standing all  which,  the  plaintiff  still  brings  this  action  for  alleged 
damage  to  the  tobacco  by  its  being  hauled  and  rehauled  and  loaded 
and  unloaded  when  the  defendant  was  resisting  the  plaintiff's  claim 
to  possession  of  the  tobacco,  all  of  which  was  prior  to  the  com- 
promise and  settlement  by  which  it  is  alleged  in  the  complaint  that 
it  was  agreed  "that  all  matters  in  controversy  between  them  should 
be  thereby  settled." 

Compliance  with  such  settlement  is  averred,  and  no  cause  of 
action  is  set  out  which  arose  subsequent  thereto.  It  is  true  that 
it  is  alleged  that  the  defendant  has  brought  suit  against  one  George 


DISCHARGE    OF    RIGHT    OF    ACTION.  657 

B.  Harris,  who  was  surety  to  the  plaintiff  for  the  payment  of  the 
purchase  money  of  the  tobacco,  for  an  alleged  deficiency  in  the 
amount  by  the  original  contract  agreed  to  be  paid.  If  so,  the 
above-alleged  agreement  of  compromise  and  full  settlement  be- 
tween the  plaintiff  and  the  defendant  can  be  pleaded  in  bar  to  such 
action.  The  fact  that  the  defendant  has  brought  such  action  does 
not  invalidate  and  set  aside  the  compromise  and  settlement  so  as 
to  entitle  the  plaintiff  to  maintain  an  action  which  upon  his  own 
averments  is  barred  by  the  compromise  and  settlement.  Let  it  be 
entered  that  the  action  is  Dismissed. 

See  cases  under  part  payment  in  satisfaction.  To  maintain  the  plea  of 
accord  and  satisfaction,  there  must  be  not  only  an  agreement  and  readiness 
of  the  defendant,  but  actual  acceptance  by  the  plaintiff.  Bank  v.  Littlejohn, 
18—563;  1  Am.  &  Eng.  Encyc,  408  et  seq.;  Jaffray  v.  Davis,  124  N.  Y.,  164, 
26  N.  E.,  351,  11  L.  R.  A.,  712;  Shubert  v.  Rosenberger,  204  Fed.,  934,  45  L. 
R.  A.  (N.  S.),  1062;  Manley  v.  Vt.  F.  Ins.  Co.,  78  Vt.,  531,  6  Ann.  Cas,  562; 
1  R.  C.  L.,  177;  1  Cyc,  311;  Mord.  &  Mc.  Rem.,  88. 

3.    By  arbitration  and  award. 

(273)  WILLIAMS  v.  MANUFACTURING  CO., 
153  N.  C,  7,  68  S.  E,  902—1910. 

Brown,  J.  It  is  unnecessary  to  review  the  conclusions  of  the 
Superior  Court  that  the  provision  in  the  contract  agreeing  to  sub- 
mit all  matters  of  difference  to  arbitration  is  no  bar  to  this  action, 
for  the  reason  that  the  plaintiffs  and  defendant  did  voluntarily  sub- 
mit such  matters  to  arbitration  in  manner  and  form  as  provided 
in  the  contract  and  the  arbitrators  in  due  time  rendered  their 
award.  It  is  common  learning  that  a  valid  award  operates  as  a 
final  and  conclusive  judgment,  as  between  the  parties  to  the  sub- 
mission, or  within  the  jurisdiction  of  the  arbitrators,  respecting  all 
matters  determined  and  disposed  of  by  it. 

But  it  is  contended  that  the  fact  that  a  summons  in  this  action 
was  issued  some  days  before  the  rendering  of  the  award  revoked 
the  submission,  and  deprived  the  arbitrators  of  the  right  to  make 
an  award.     No  other  form  of  revocation  is  contended  for. 

At  common  law  a  submission  might  be  revoked  by  any  party 
thereto  at  any  time  before  the  award  was  rendered.  Bacon 
Abridg.,  Arb.  B ;  Comyns  Dig.,  Arb.  D,  5 ;  Vinyor's  Case,  8  Coke, 
82  Some  of  the  courts  of  this  country  have  held  to  the  contrary 
(Berry  v.  Carter,  19  Kans.,  135,  and  cases  cited),  but  this  court 
has  followed  the  doctrine  of  the  common  law.  Tyson  v.  Robin- 
son, 25  N.  C,  333 ;  Carpenter  v.  Tucker,  98  N.  C,  316.  The  revo- 
cation must  be  express  unless  there  is  a  revocation  by  implication 
of  law,  and  in  case  of  express  revocation,  in  order  to  make  it 
complete,  notice  must  be  given  to  the  arbitrators.     It  is  ineffective 


658  DISCHARGE    OF    CONTRACT. 

until  this  has  been  done.  Allen  v.  Watson,  10  Johns.,  205 ;  Brown 
v.  Leavitt,  96  Me.,  251 ;  Morse  on  Arb.  and  Award,  231  ;  Yin.  Al.., 
Authority  E.,  3,  4;  Vinyor's  Case,  supra;  2  Am.  &  Eng.,  600. 

It  is  contended  that  commencing  an  action  is  a  revocation  by 
legal  implication.  Such  revocations  arise  from  the  legal  effect  of 
some  intervening  happening  after  submission,  either  by  the  act  of 
God  or  caused  by  the  party,  and  which  necessarily  puts  an  end  to 
the  business.  The  death  of  a  party,  or  arbitrator,  marriage  of  a 
feme  sole,  lunacy  of  a  party,  or  the  utter  destruction  and  final 
end  of  the  subject-matter,  are  of  this  description.  But  whether 
the  bringing  of  an  action  for  the  subject-matter  of  an  arbitration 
after  submission  and  before  award  is  an  implied  revocation,  is  a 
matter  about  which  the  courts  differ. 

In  New  York  it  is  held  that  it  is  no  revocation  in  law  (Lumber 
Co.  v.  Schneider,  1  N.  Y.  Supp.,  441  ;  Smith  v.  Bard,  20  Barb., 
262).  To  the  same  effect  are  the  decisions  in  New  Jersey  and 
Vermont  (Knores  v.  Jenkins,  40  N.  J.  L.,  288;  Sutton  v.  Tyrrell, 
10  Vt.,  91).  The  courts  of  Kentucky,  Illinois,  Georgia  and  New 
Hampshire  hold  the  contrary.  (Peters  v.  Craig,  6  Dan.,  307; 
Paulser  v.  Manske,  24  111.  App.,  95;  Leonard  v.  House,  15  Ga., 
473;  Kimball  v.  Gilman,  60  N.  H.,  54.)  .  .  .  Nevertheless  it  is 
plainly  deducible  from  all  the  cases  that  the  action  when  com- 
menced must  cover  the  subject-matter  submitted  to  arbitration; 
otherwise  it  can  not  be  construed  as  a  revocation  or  notice  to  the 
party  or  to  the  arbitrators. 

In  the  case  at  bar  the  summons  was  issued  some  days  before 
the  award  was  made,  but  the  complaint  was  not  filed  until  a  year 
after.  The  summons  gave  no  indication  as  to  the  character  of 
the  action  except  that  it  was  a  civil  action.  Until  a  complaint  is 
filed  the  defendant  has  no  legal  notice  of  the  cause  of  action  and 
the  arbitrators  had  a  right  to  proceed  with  the  pending  arbitration 
and  to  render  their  award.  ...  In  their  written  award  the 
arbitrators  appear  to  have  carefully  confined  themselves  to  the 
questions  submitted  and  to  have  confined  their  findings  to  the  four 
matters  in  dispute.  But  it  is  unnecessary  to  discuss  that  conten- 
tion further,  as  it  is  expressly  admitted  in  the  case  agreed  that  the 
arbitrators,  on  25  January,  1907,  rendered  their  award,  "passing 
on  the  matters  submitted  to  them."  In  view  of  this  admission  in 
the  record  it  is  not  now  open  to  the  plaintiff  to  attack  the  award. 

Judgment  reversed. 

See  this  case  and  notes  in  138  A.  S.  R.,  637,  21  Ann.  Cas.,  954.  and  31  L. 
R.  A.  (N.  S.),  679;  also  in  ISA — 203.  "A  submission  to  arbitration  may  be 
defined  as  an  agreement  by  which  parties  refer  disputed  or  doubtful  matters 
pending  between  them  to  the  final  decision  and  award  of  another  party, 
whether  one  person  or  more;  the  party  to  whom  the  reference  is  made  is 
called  an  arbitrator,  the  arbitration  is  the  investigation  and  determination 
of  the  matters  of  difference  between  the  contending  parties  by  the  arbitrator 


DISCHARGE    OF    RIGHT    OF    ACTION.  659 

so  chosen  and  the  award  is  the  decree  or  judgment  of  the  arbitrator  and  is 
generally  conclusive  in  its  effect."  Millsaps  v.  Estes,  137 — p.  539,  citing  2 
Am.  &  Eng.  Encyc,  539,  and  Morse  on  Arbitration,  36.  See  also  Robertson 
v.  Marshall,  155—167;  Peele  v.  R.  R.,  159—60;  Sprinkle  v.  Sprinkle,  159— 
81;  Millinery  Co.  v.  Ins.  Co.,  160—139;  2  R.  C.  L.,  386;  3  Cyc,  728;  2  Am. 
&  Eng.  Encyc,  794;  Mord.  &  Mc.  Rem.,  90. 

4.    By  judgment. 

(274)   WINSLOW  v.  STOKES, 

48  N.  C,  285,  67  A.  D.,  242—1856. 

Action  on  a  written  covenant  in  relation  to  the  management  of 
a  sawmill.  The  pleas  were  covenants  performed,  former  suit,  and 
recovery  for  the  same  cause  of  action. 

It  appeared  upon  the  trial  below  that  a  former  suit  had  been 
brought  upon  the  instrument  in  question,  and  the  same  breaches 
assigned  as  in  the  present  case ;  also,  that  the  plaintiff  had  recov- 
ered damages  for  these  breaches,  and  had  received  satisfaction  for 
the  same  before  this  suit  was  brought. 

Upon  an  intimation  from  His  Honor  that  this  appeared  to  be  a 
full  answer  to  the  suit,  the  plaintiffs  offered  to  show  that  the  jury 
on  the  former  trial  were  instructed  by  the  court  to  give  damages 
up  to  the  time  of  the  trial,  and  for  no  longer  time ;  but  His  Honor 
being  of  opinion  that  this  would  not  alter  the  case,  refused  the  tes- 
timony, and  the  plaintiffs  excepted. 

Verdict  and  judgment  for  the  defendant,  and  appeal  by  the 
plaintiffs. 

Battle,  J.  The  recovery  in  the  former  suit  upon  the  same 
covenant  in  which  the  same  breaches  were  assigned  was,  we  think,. 
a  bar  to  the  present  action,  and  His  Honor  properly  ruled  out  the 
testimony  which  was  offered  to  show  that  full  damages  were  not 
then  given.  The  covenant  was,  in  the  particulars  mentioned,  one 
and  indivisible,  and  upon  a  breach  of  it,  the  plaintiffs  were  en- 
titled to  the  whole  amount  of  damages,  present  and  prospective, 
caused  by  such  breach.  If  the  damages  were  restricted  in  conse- 
quence of  instructions  from  the  court,  it  was  an  error  which  the 
plaintiffs,  by  taking  the  proper  steps,  might  have  had  corrected  in 
that  action.  Their  omission  to  do  so  can  not  give  them  the  right 
to  harass  the  defendant  with  the  expense  and  trouble  of  another 
suit.  For  the  distinction  between  the  cases  where  prospective  dam- 
ages, that  is,  such  as  have  accrued  since  the  commencement  of  the 
suit,  may,  and  where  they  can  not,  be  given,  see  the  case  of  Moore 
v.  Love,  decided  at  the  last  term,  and  reported  ante,  215  (48 — 
215),  in  which  the  subject  is  fully  discussed. 

Per  Curiam.  Judgment  affirmed. 


660  DISCHARGE    OF    CONTRACT. 

Estoppel  and  res  judicata. — A  judgment  of  a  court  having  jurisdic- 
tion estops  parties  and  privies.  44 — p.  161;  85—456;  99—258;  128—130.  The 
judgment  is  decisive  of  the  points  raised  in  the  pleadings,  or  which  might 
properly  be  predicated  upon  them;  but  not  as  to  matters  which  might  have 
been  brought  in,  but  in  fact  were  not  embraced  in  the  litigation.  144—516; 
140-18;  140-437;  140—503;  125-64;  119—460;  117—181;  91-82;  91-322; 
Clothing  Co.  v.  Hay,  163 — 495 ;  Ferebee  v.  Sawyer,  167—199. 

"Splitting  up"  accounts. — Where  the  items  are  distinct  dealings,  though 
they  may  be  contained  in  a  "running  account,"  they  may  be  separated,  and 
different  actions  brought  so  as  to  give  a  justice  of  the  peace  jurisdiction,  but 
they  may  afterwards  be  consolidated  by  order  of  court,  Caldwell  v.  Beatty, 
69— p.  370;  Boyle  v.  Robbins,  71 — 130;  but  where  there  is  an  account  stated 
or  rendered  and  not  objected  to,  it  becomes  one  debt  and  can  not  be  sepa- 
rated, or  where  the  items  constitute  one  dealing,  Hawkins  v.  Long,  74 — 
781;  McGruder  v.  Randolph,  77—79;  Waldo  v.  Jolly,  49—173;  Gooch  v. 
Vaughan,  92—610;  Kearns  v.  Heitman,  104—332;  Marks  v.  Ballance,  113— 
28;  Simpson  v.  Elwood,  114—528;  Cotton  Mills  v.  Cotton  Mills,  115—475; 
Fort  v.  Penny,  122—230;  Norvelle  v.  Mecke,  127—400;  Copeland  v.  Tel.  Co., 
136—11;  McPhail  v.  Johnson,  109—571;  a  judgment  on  part  would  exclude 
further  recovery,  Jarrett  v.  Self,  90 — 478;  Smith  v.  Lumber  Co.,  140—375, 
142—26.  See  Moore  v.  Nowell,  94—265;  Mord.  &  Mel.  Rem.,  673.  For  the 
different  views  taken  on  the  subject,  see  24  Am.  &  Eng.  Encyc,  786  el  seq. 
A  mortgagee  may  bring  an  action  for  part  of  the  articles  included  in  his 
mortgage.     Kiser  v.  Blanton,   123 — 400. 

5.    By  statute  of  limitations. 

(275)   HUSSEY  v.  KIRKMAN, 
95  N.  C,  63—1886. 

Civil  action  by  plaintiff  against  the  defendant  as  administrator 
of  John  Woods,  for  the  sum  of  $54.50  due  by  note,  alleged  to 
have  been  lost.  The  note  was  alleged  to  have  been  executed  in 
June,  1875,  and  the  action  was  brought  in  April,  1884.  Defendant 
denied  plaintiff's  allegations  and  set  up  the  statute  of  limitations 
as  a  defense. 

One  Cullen  Woods  testified  that  about  two  months  before  the 
death  of  the  intestate,  he  heard  him  say  that  he  owed  the  plaintiff 
near  the  sum  of  $60,  "that  it  was  just  and  due,  and  he  intended 
to  pay  it  if  he  ever  got  well  enough."  Plaintiff  testified  that  the 
signature  to  the  note  was  in  the  handwriting  of  John  Woods,  and 
proposed  to  prove  the  contents,  but  defendant  objected,  and  the 
objection  was  sustained. 

The  judge  held  that  there  was  no  evidence  to  go  to  the  jury, 
and  plaintiff  submitted  to  nonsuit  and  appealed. 

Smith,  C.  J.  (After  discussing  the  evidence  under  sec.  590  of 
The  Code.)  Upon  the  received  evidence,  it  does  not  appear  when 
the  note  was  made,  nor  when  it  matured ;  and  when  the  statutory 
bar  is  set  up,  it  devolves  on  the  plaintiff  to  show  that  the  cause  of 
action  accrued  within  the  time  limited  for  bringing  it. 

If  the  note  was  made  previous  to  the  time  when  The  Code  of 
Civil  Procedure  went  into  effect,  there  would  be  no  limited  time 


DISCHARGE    OF    RIGHT    OF    ACTION.  661 

for  instituting  suit,  but  only  a  presumption  of  payment  raised  by 
the  lapse  of  time.  If  made  and  maturing  on  or  after  April  8, 
1874,  the  limitations  in  the  present  law  would  not  have  expired 
before  the  issue  of  the  summons.     The  Code,  sec.  132,  par.  2. 

If  it  was  executed  and  became  due  within  the  interval  thus 
marked,  the  statutory  bar  would  protect  the  intestate.  The  plain- 
tiff did  not  show  when  the  note  was  given,  and  when  the  cause  of 
action  accrued. 

To  meet  this  difficulty,  we  suppose  the  intestate's  admissions  of 
his  indebtedness  were  given  in  evidence,  and  the  inquiry  is,  were 
they  sufficient  to  remove  the  bar? 

The  admission  is,  that  the  intestate  owed  a  note  to  the  plaintiff 
of  about  sixty  dollars,  which  had  been  renewed. 

The  trouble  is,  that  no  note  has  been  produced,  nor  its  contents 
shown,  to  which  the  admissions  can  be  attached,  so  as  to  admit  of 
identification. 

The  acknowledgment  is  very  like  that  in  Faison  v.  Bowden,  72 
N.  C,  405,  in  which  the  testator  said  to  the  plaintiff,  "I  can't  pay 
you  what  I  owe  you,  but  I  will  pay  you  soon,  or  next  winter.  I 
need  what  money  I  have  now  for  building,  and  it  will  do  you  more 
good  to  get  it  in  a  lump."  The  testator  owed  the  plaintiff  for 
medical  services,  running  over  a  period  from  the  beginning  of 
1854  until  his  death,  in  November,  1861,  and  the  recognition  of 
the  debt  was  relied  on  to  remove  the  bar  as  to  the  whole  account. 

It  was  held  to  be  insufficient,  and  Reade,  J.,  for  the  court,  says: 
"The  rule  to  be  gathered  from  the  numerous  cases,  to  which  we 
were  referred  by  the  counsel,  may  be  thus  expressed :  The  new 
promise  must  be  definite  and  show  the  nature  and  amount  of  the 
debt,  or  must  distinctly  refer  to  some  writing,  or  to  some  other 
means  by  which  the  amount  and  nature  of  it  can  be  ascertained; 
or  there  must  be  an  acknowledgment  of  a  present  subsisting  debt, 
equally  definite  and  certain,  from  which  a  promise  to  pay  such 
debt  may  be  implied." 

Again,  it  has  been  held  that  the  promise  must  be  made  to  the 
creditor  himself  (Parker  v.  Shuford,  76  N.  C,  219,  and  Faison 
v.  Bowden,  Ibid.,  124),  or  to  an  attorney  or  agent  for  the  cred- 
itor (Kirby  v.  Mills,  78  N.  C,  124),  to  repel  the  statute. 

If,  however,  the  note  was  executed  since  The  Code  of  Civil 
Procedure  became  the  law  (and  the  time  is  not  shown),  the  prom- 
ise or  acknowledgment  must  be  in  writing  (The  Code,  sec.  172), 
and  if  before,  there  is  no  statutory  limitation  applicable. 

The  ruling  of  the  court,  that  there  was  no  evidence  before  the 
jury  to  warrant  a  verdict  for  the  plaintiff,  must  therefore  be  sus- 
tained. 

Judgment. — Action  on  Superior  Court  judgment  is  barred  in  ten  years. 
Rev.,  391;  Clark's  Code,  sec.  152;  but  it  must  be  a  final  judgment.     Williams 


662  DISCHARGE    OF    CONTRACT. 

v  McFadyen,  145—156;  a  void  judgment  does  not  affect  the  rights  of  the 
party  Card  v.  Finch,  142—140;  the  statute  also  applies  to  a  foreign  judg- 
ment. Arrington  v.  Arrington,  127—190.  A  justice's  judgment  is  barred  in 
seven  years,  Rev.,  392 ;  but  it  may  be  docketed  in  the  Superior  Court  and  be 
enforced  by  execution  within  ten  years.  Rev.,  1479;  Mcllhenny  v.  Trust 
Co.,  108—311.  The  running  of  the  statute  is  suspended  by  allotment  of  the 
homestead,  during  the  continuance  of  the  homestead.  Rev.,  685;  Bevan  v. 
Ellis  121—224;  Farrar  v.  Harper,  133—71;  Wells  v.  Lumber  Co.,  131—161; 
Formyduvall  v.  Rockwell,  117—320;  whether  a  conveyance  of  the  homestead, 
which  now  removes  the  exemption  (Rev.,  686),  would  cause  the  statute  to 
run  again,  quaere? 

Contract  under  seal.— Action  is  barred  as  to  the  principal  in  ten  years. 
Rev.,  391 ;  Clark's  Code,  sec.  152.  A  mortgage  is  barred  as  to  foreclosure, 
redemption  and  sale,  in  ten  years.  Rev.,  391 ;  Clark's  Code,  152.  The  debt 
mav  be  barred  in  three  vears,  if  not  under  seal,  and  the  mortgage  still  be 
enforced.  Jenkins  v.  Wilkinson,  113—532;  Hedrick  v.  Byerly,  119—420;  and 
it  was  held  in  Menzell  v.  Hinton,  132—660,  that  the  debt  and  right  of  fore- 
closure by  suit  might  be  barred,  and  yet  the  power  of  sale  be  exercised ;  see 
also  Cone  v.  Hyatt,  132—810 ;  Miller  v.  Coxe,  133—578 ;  but  this  was  changed 
bv  Rev  1044.  A  second  mortgagee  can  not  have  a  first  mortgage  canceled 
because 'it  is  barred.  Miller  v.  Coxe,  133—578.  The  statute  begins  to  run 
from  the  time  the  debt  is  due,  and  the  mortgagee  may  sell  within  ten  years 
from  that  time,  although  he  might  have  foreclosed  before  that  time  for  failure 
to  pav  interest.     Cone  v.  Hyatt,  132—810;  Scott  v.  Lumber  Co.,  144—44. 

A  surety  on  a  sealed  instrument  is  protected  by  the  three-years  statute,  and 
he  may  show  bv  parol  that  he  is  surety,  as  stated  in  Lewis  v.  Long,  102— 
206;  Clark's  Code,  sees.  152  (2),  155  (1);  see  also  Welfare  v.  Thompson, 
83_276;  Capell  v.  Long,  84—17;  Coffey  v.  Rinehart,  114—509;  but  a  mort- 
gage executed  by  the  surety  is  good  for  ten  years.  Miller  v.  Coxe,  133— 
578.  A  surety  on  a  guardian  bond  is  protected  in  three  years  after  breach, 
or  from  a  demand  for  an  account  and  a  refusal ;  in  six  years  if  final  account 
^s  filed  •  in  ten  years  if  no  account  is  filed  and  no  demand  is  made.  Kennedy 
v.  Cromwell,  108—1 ;  Self  v.  Shugart,  135—185. 

Simple  contracts.— The  action  is  barred  in  three  years  after  the  cause 
of  action  accrues.  Rev.  395;  Clark's  Code,  sees.  152,  155;  but  claims  against 
counties,  cities  and  town  are  barred  in  two  years.  Rev.,  396;  Board  v. 
Greenville,   132—4,   137—503. 

Accounts.— In  a  mutual,  open  and  current  account,  where  there  have 
been  reciprocal  demands  between  the  parties,  the  statute  runs  from  the  last 
item.  Rev.,  376;  Green  v.  Caldcleugh,  18—320;  Waldo  v.  Jolly,  49—173; 
Hussev  v.  Burgwyn,  51—385 ;  Mauney  v.  Coit,  86—463 ;  Robertson  v.  Pick- 
rell,  77—302;  Stokes  v.  Taylor,  104—394;  Fulps  v.  Mock,  108—601:  if  the  ac- 
counts are  not  mutual,  the  statute  runs  from  each  item,  as  when  services  are 
rendered  for  a  series  of  years  without  any  agreement  as  to  duration,  the 
statute  runs  from  the  end  of  each  year.     Miller  v.  Lash,  85 — 51. 

Fraud  or  mistake. — Action  may  be  brought  within  three  years  from  the 
discovery  of  the  facts  constituting  the  fraud  or  mistake.  Rev.,  395 ;  Clark  s 
Code,  sec.  152;  or  when  thev  could  have  been  discovered  by  reasonable  care. 
Stubbs  v.  Motz,  113—458;  Hooker  v.  Worthington,  134—283;  Peacock  v. 
Barnes,  142—215;  Modlin  v.  R.  R.,  145—219;  it  runs  from  the  discovery  of 
the  fraud  and  not  from  the  discovery  of  the  plaintiff's  rights.  Bonner  v. 
Stotesbury,  139—3. 

Running  of  the  statute. — The  time  is  counted  from  the  time  the  cause 
of  action  accrues,  that  is.  when  the  action  could  have  been  brought.  Rev., 
360;  Clark's  Code,  sec.  138.  But  if  at  the  time  the  cause  of  action  accrues 
the  party  entitled  is  under  the  disability  of  infancy,  insanity,  or  imprison- 
ment for  crime,  he  may  sue  within  the  time  limited  after  the  disability  is  re- 
moved. Rev..  362;  Clark's  Code,  sec.  163;  Outland  v.  Outland,  118—138; 
Asburv  v.  Fair,  111—251;  Grady  v.  Wilson,  115—344;  Earnhardt  v.  Clement, 
137—91 ;  Self  v.  Shugart,  135—185. 

The  statute  does  not  run  in  favor  of  a  nonresident,  or  a  defendant  out  of 


DISCHARGE    OF    RIGHT    OF     ACTION.  663 

the  State.    Rev.,  366:  Green  v.  Ins.  Co.,  139 — 309;  Alpha  Mills  v.  Engine  Co., 
116—797;  Lee  v.  McKoy,  118—518;  Clark's  Code,  sec.  162. 

Upon  the  death  of  a  person  his  personal  representative  may  sue  within  one 
year  after  the  death ;  and  an  action  may  be  brought  against  such  representa- 
tive within  one  year  after  issuing  of  letters,  provided  administration  is  be- 
gun within  ten  years.  Revisal,  367;  Clark's  Code,  sec.  164;  Coppersmith  v. 
Wilson,  107 — 31;  Benson  v.  Bennett.  112 — 505:  Winslow  v.  Benton,  130 — 
58;  Phifer  v.  Ford,  130—208:  Lowder  v.  Hathcock.  150—438;  Mathews  v. 
Peterson.  150 — 134.  But  a  claim  presented  to  an  administrator  and  rejected 
by  him,  must  be  sued  on  within  six  months  thereafter.  Rev.,  1903;  Mor- 
rissey  v.  Hill,  142 — 355. 

The  time  of  the  stay  of  proceedings  by  injunction,  or  of  a  controversy 
about  the  probate  of  a  will  or  the  granting  of  letters  of  administration,  will 
not  be  counted.  Rev.,  368,  369 ;  and  a  new  action  may  be  brought  within  one 
year  after  nonsuit,  reversal  or  arrest  of  judgment.  Rev.,  370;  Clark's  Code, 
sec.  166,  and  cases  cited;  Meekins  v.  R.  R..  131 — 1. 

For  undisclosed  partner,  from  the  time  he  is  known.  Rev.,  373.  The 
statute  also  applies  to  claims  by  the  State.     Rev.,  375. 

New  promise. — A  new  promise  in  writing  will  revive  the  debt.  Rev., 
371;  Clark's  Code,  sec.  172;  Rich  v.  Herren,  95—388;  Royster  v.  Farrell. 
115 — 306;  Cecil  v.  Henderson,  121—244;  it  must  be  certain  in  terms  or  refer 
to  something  that  will  make  it  certain.  Long  v.  Oxford,  101 — 408;  a  mere 
acknowledgment  is  not  sufficient :  it  must  be  an  unconditional  promise  to  pay. 
Helm  v.  Griffin,  112—356;  Wells  v.  Hill,  118—900;  McBride  v.  Gray.  14— 
120:  Smallwood  v.  Smallwood.  19—330;  Mastin  v.  Waugh,  19—517;  Taylor 
v.  Stedman,  33—347:  Moore  v.  Hyman,  35 — 272:  it  must  be  made  to  the 
creditor  or  his  agent.  Parker  v.  Shuford,  76—219;  and  the  action  is  upon 
the  original  contract  as  between  the  original  parties,  otherwise  upon  the  new 
promise.  Fleming  v.  Staton.  74 — 203:  Thompson  v.  Gilreath,  48—293;  now 
it  is  upon  the  original  promise  except  in  special  case,  as  to  pay  an  execu- 
tor, or  to  pay  in  specific  articles.  King  v.  Phillips,  94—555 ;  Cecil  v.  Hender- 
son, 121 — p.  246.  "I  propose  to  settle  your  claim"  is  sufficient.  Taylor  v. 
Miller,  113—340:  that  ''he  would  see  the  judge  and  do  what  he  said."  is  not 
sufficient.  Grady  v.  Wilson.  115 — 344.  An  acknowledgment  by  a  partner 
after  dissolution  will  bind  only  himself.    Rev.,  372. 

Part  pavment  will  extend  the  Hme  from  &*  date  of  the  payment,  or 
revive  the  debt  if  barred.  Rev..  371;  Clark's  Code,  sec.  172.  and  cases  cited; 
Copeland  v.  Collins,  122—619:  Moore  v.  Carr,  123—425:  LeDuc  v.  Butler. 
112 — 458;  Williams  v.  Kerr.  113—306;  but  it  must  be  such  a  payment  as  to 
recognize  the  debt  and  its  continued  obligation.  Battle  v.  Battle.  116 — 161; 
Cone  v.  Hyatt.  132—803:  Robinson  v.  McDowell.  133—182.  Part  payment 
by  the  principal  before  the  debt  is  barred,  operates  to  continue  the  obligation 
as  to  himself  and  the  sureties,  but  not  as  to  endorsers :  a  payment  after  the 
debt  is  barred  revives  it  onlv  as  to  the  one  making  the  payment.  Moore  v. 
Godwin.  109—218:  Moore  v.'Beaman.  111—328:  Garrett  v.  Reeves.  125—529; 
Supply  Co.  v.  Dowd.  146—191:  Bank  v.  Hamrick,  162—216:  Houser  v.  Fays- 
soux.  168—1.  A  pavment  or  a  new  promise  on  a  judgment  does  not  keep  it 
in  force.  Hughes  v.  Boone,  11-1 — 54:  McCaskill  v.  McKinnon.  121—192; 
McDonald  v.  Dickson.  87-^404. 

A  promise  not  to  plead  the  statute  will  estop  the  party.  Raby  v.  Stuman. 
127—463:  Havmore  v.  Comrs..  85—268:  Cecil  v.  Henderson.  121—244:  Joyner 
v.  Massey.  97—148 :  Barcroft  v.  Roberts.  91—363 :  a  mere  request  not  to  sue 
is  not  sufficient :  it  must  be  an  agreement  not  to  plead  the  statute.  Hill  v. 
Hilliard.  103—34.  As  to  delav  in  contract  for  land,  see  Hairston  v.  Bescherer. 
141—205. 

Effect  of  the  statute. — The  statute  bars  the  remedy  but  does  not  dis- 
charge the  debt.  Campbell  v.  Holt.  115  U.  S..  620:  Capehart  v.  Dettnclc  91 
—344:  Alpha  Mills  v.  Engine  Co..  116—797:  Hedrick  v.  Byerly.  119 — U0: 
Scott  v.  Lumber  Co..  144 — 44:  Clark's  Code.  sec.  152  (3),  and  cases  cited 

Before  1868  there  was  a  statute  of  presumptions,  which  could  be  rebutted 


664  DISCHARGE    OF    CONTRACT. 

by  showing  insolvency,  etc.  Campbell  v.  Brown,  88 — 376;  Alston  v.  Haw- 
kins, 105—3 :  Boone  v.  Peebles,  126—826. 

Change  of  statute. — The  Legislature  may  change  the  statute  by  extend- 
ing or  shortening  the  time,  subject  to  the  restriction  that  where  the  time 
is  reduced  "a  reasonable  time  must  be  given  for  the  commencement  of  an 
action  before  the  statute  works  a  bar."  Strickland  v.  Draughan,  91 — 103 ; 
Nichols  v.  R.  R.,  120—495;  Culbreth  v.  Downing,  121—206;  Dunn  v.  Bea- 
man,  126—766;  Carson  v.  R.  R.,  128—95;  Mathews  v.  Peterson,  150—132. 

Conflict  of  laws. — In  regard  to  the  merits  and  rights  involved  in 
actions,  the  law  of  the  place  where  they  originate  is  to  govern ;  but  all  forms 
of  remedies  and  judicial  proceedings  are  to  be  according  to  the  law  of  the 
place  where  the  action  is  instituted,  without  any  regard  to  the  domicile  of 
the  parties,  the  origin  of  the  right,  or  the  country  of  the  act.  Haws  v. 
Craigie,  49 — 394,  citing  Story's  Conf.  of  Laws,  sec.  558;  9  Cyc,  664;  .Minor's 
Conf.  of  Laws,  521.  As  to  the  statute  of  limitations  on  foreign  judgments, 
the  lex  fori  will  apply.     Arrington  v.  Arrington,  127 — 190. 


Index 

Page 

Abandonment  of  contract 72'  J27,  568 

as  a  discharge    597 

by    cropper    72 

incomplete   agreements    •  •  •      '~ 

of  rights  under  ** '>  =°ft 

under  statute  of  frauds   lc58>  5D° 

Abatement  of  action,  by  death   5?^o'  Si 

Absolute   promises    612,613.631 

Abuse  of  process    

Acceptance  of  offer  ^4 

necessary    34  48 

completes   contract    zk'kk'kk'  51 '  184  433 

manner   of    35,43,48,51,  184,  4*i 

by  correspondence    •  •  •  .  °'  R . 

by  performing  act  4a,  ou,  10* 

by  buying  ticket   a  n' il' ik' ar  m 

identical  with  offer 6,  7,  34,  35,46,51 

in  time  named  or  reasonable  time 52 

check  sent  in  full   < . 

by  signing  writing •      , 

modified,  a  rejection •  •  •?"'  ^ j 

must  be  communicated   ^a  4?  40/  51 

by  one  of  two  grantees J04 

of  draft,  by  letter  before  or  after J^j 

must  be  writing ia  4? 

of  guaranty • 220223 

of  official  bond,  when  presumed   <^u>  *€? 

by   unauthorized  person fio_71 

of  invitation  to  deal   55 

of  option  within  time   \\'1~'X1  '~±'Aia  'cac  «no 

of  benefits 14-17,31,65,214,605,608 

of  goods  sold  bl  ™' 

by    corporation    _ . 

in  public  contracts  to  lowest  bidder ' ' 

revocation  of  acceptance  

Accommodation  paper,  when  complete  4>  98 

Accord   and   satisfaction    210' 656 

22Q 
Accounts,  against  county rxx 

splitting   up    ™£ 

statute  of  limitations   UUii 

Act  of  God,  as  a  discharge 523,  574,  633,  638,  640 

Actions,  abatement  of   525,526,637 

by  and  against  the  State jfrt 

by  and  against  the  United  States ^*° 

on  several  judgments    '|* 

on  official  bond g~ 

on  lost  note   JJ?" 

on  express  and  implied  contract  w~Y  iAA'o^'cAe  ana 

on  implied  contract 13-24,  120,  216,  605-608 

665 


666  index. 

Actions — continued.  Page 

on  deceit  and  warranty  346 

on  warranty  in  sale  of  personalty 617-627 

ex  contractu  and  ex  delicto   24 

for  breach  of  contract   647 

money  paid   22, 457 

damages 647 

specific  performance  653 

injunction    , 655 

parties  to  (see  Parties,  capacity  of). 

executors  and  administrators 524,  525 

joint  obligors  and  obligees 526-535 

one  not  a  party  to  the  contract 461-476 

real  party  in  interest 475,  493 

assignee  of  chose  in  action  485-493 

one  can  not  be  plaintiff  and  defendant 5 

Adequacy  oi  consideration •    179-181 

Administrators   (see  Executors). 

Advertisements,  offers  to  the  public  61-64 

invitations  to  deal  69 

Agent,  authority  to  execute  deed   84,  92 

to  bind  under  statute  of  frauds 144,  145,  148 

to   bind   corporation    240, 242 

to  act  for  the  State   220 

in  illegal  transaction   389, 453 

husband  and  wife  as  agents 291 

infant  as  agent,  and  acting  by  agent 248,  263 

Agreement,  two  or  more  parties 3,  4,  5 

minds  meeting  in  common  intention 3,  6,  9,  14,  25,  297,  307,  433 

resulting  in  obligation   26 

must  affect  legal  relations   26, 64 

certain  and  definite  in  terms  26,  27,  75,  76 

genuine   consent    ....     66 

must  be  complete   26,  69,  7 1 ,  73 

to    discharge    561,  566,  568 

in  consideration  of  marriage   139 

not  to  be  performed  within  a  year 140 

separation  agreements,  and  for  divorce 419-423 

Agricultural  lien,  in  writing 159 

on  abandoned  crop   597 

Alienation,   restraint   upon    429 

limiting  liability  for  debts 429 

separate  trust  for  married  women 277,  281,  291 

Aliens,  contracts  of   244, 246 

Alteration  of  instrument 643,  646 

Alternative  contracts    582, 629 

Ambiguity,  latent  and  patent   547 

Anticipatory  breach 591 ,  594,  600 

Apprentice,  contract  not  assignable   483 

contract  to  remove   367 

breach  of  bond    631 

Arbitration  and  award,  as  a  discharge 657 

agreement   to   arbitrate    113,  405,  408,  658 

legality  of 405 

by  infant  249 

in  writing  when 128 

revocation   of    657 

mistake  in  award 309 


index.  667 

Page 

.       ,  477-525 

Assignment   ot    contract    477-509 

by  act  of  parties . .  • 477-484 

assignment  of  liabilities 477-483 

for  personal  service  483 

for  purchase  of  land 4g4 

under  mortgage  485-494 

assignment  of  rights •  •  •  —  ■  4Q2  4Q6 

at  common  law 486,' 487,' 492,  496,  500 

'byfflaV  merchant'::::::::::::::: 48%930'540922 

what^e^ 

mode  of  assignment 494,49/,<*yy 

order  on  particular  fund   49^-497 

notice  to  person  liable  •  •  •  •     ~  -08 

assignment  and  endorsement 49/,  ou/,  ouo 

copyright  and  patent 496 '497  507 

negotiable  instrument 4yD>  *y/'  ™!j 

non-negotiable  instrument • •  ■   _0_ 

bond  without  endorsement ^yy'  ^Q5 

LVJlem^nt • ; ; ;  ^  509 

bill  of  lading   '  508 

possession  as  evidence Asfi ' 488 ' 489 ' 492 ' 499  507 

effect  of  assignment   486,  488,  489,  49Z,  «a,  ou/ 

note  secured  by  mortgage 50g 

claim  pending  suit •  •;  4g4 

mortgaged    premises.... w  '  484 

contract  to  purchase  land g-   507 

rights,  of  assignee  '  496 


of  judgment • 4Q?  =,00  504  506 

of  negotiable  instrument   492,  50U,  5U4,  ouo 

of  non-negotiable  instrument  ouu'  gg 

of  satisfied  note ^qq 

for  collection    486,' 489,  492 

t0  sue, -, ; .' 509,  525 

by  operation  of  law   50g 

leases  of  land 5jg 

restrictive  condition    510 

covenant  to  renew 5J2 

assignment  and  subletting 5j2 

rent  due  and  not  due ^J2  515 

freehold  interest  in  land ■ ciq'  cig 

covenants  running  with  land ol   '  51Q 

by  marriage    '   523 

by  death  of  party c2? 

abatement  and  survival  of  actions •  • 

Attestation  of  deed  '  247 

Attorney,  contract  for  services 229 

with  county '   4jq 

contingent  fee   Ain  491  493 

collection  fee  in  note 41U'  ™  J'  353 

appearing  on  both  sides '  g^j 

confidential  relation   

Auctions,  when  sale  complete   64 

under  order  of  court g4 

compliance  with  statute  of  frauds 366 

fraud   in   such   sales -  ..  •  ■ 64 

auctioneer  agent  for  seller  and  bidder •  •    J4g 

may  bind  them  in  writing  .? '    63 

right  to  withdraw  property  or  bid 64 

failure  of  bidder  to  comply 


668  index. 

Avoidance  of  contract  Page 

under  statute  of  frauds   157 

by  infants  254,  258,  262 

by  insane  persons 269,  27 1 

by  drunken  persons 272,  275 

by  married  women 277,  279-289 

for  mistake 294-300,  305 

for  fraud  344, 346 

for  duress  354-360 

for  undue  influence 361 

for  illegality 447,  449,  450,  452,  453 

Banks,  exempting  from  liability 437 

officers  misrepresenting  condition  336 

Bankruptcy,  as  a  discharge 646 

promise  to  pay  after  discharge 158,  217,  646 

Bills  and  notes  (see  Negotiable  Instr.). 

accommodation  paper  5, 98 

attorney's  fee  in   410,  491, 493 

consideration  presumed,  when  1 13,  172,  176,  177 

in  hands  of  payee  after  endorsement  509 

in  illegal  transaction    375,381,410,416,419,440,446 

joint  and  several  528.  530 

possession  of  as  evidence  of  ownership  508 

promise  to  waive  exemptions  429 

transfer  of,  nature  and  effect 489,  492,  497,  502,  507 

usury   in    375-381 

value  received,  evidence  of  consideration 177 

Bill  of  lading,  not  necessary 50 

express  terms  in,  unseen 29,  433,  436 

transfer  of 508,  509 

Bohemian  Oats  contract    384 

Bonds  (see  Contracts  under  seal,  Deeds). 

what  is  a  bond 83 

blanks  to  be  filled 83 

to  be  signed  by  others 74,  106 

consideration  not  necessary   84,  1 13,  41 1 

delivery    required    96,  97,  100,  220 

acceptance  by  obligee    97 

payable  to  bearer  108, 502 

payable  to  obligor 5 

penalty  in   557 

as  a  negotiable  instrument   99,  108,  502,  505,  508 

Boundaries,  parol  agreement  to  fix 128 

Boycotts 460 

Breach  of  contract 

by  renunciation  before  time  for  performance 591,  594,  596 

must  be  accepted  and  acted  upon 593,  595,  596 

remedies 591,  594,  596 

by  renunciation  during  time  of  performance 477,  594-600 

in  entire  contracts 596,  633 

in  divisible  contracts 598,  634 

remedies    477, 599 

by  impossibility  created  by  act  of  party 477,  600 

remedies    477, 603 

by  failure  of  performance 604 

entire  contracts   597,  605,  606 

divisible  contracts   607,  609 

installment  contracts 607,  612,  635 

absolute  promises   612, 613 


index.  669 

Breach  of  contract — continued.  Page 

dependent  and  independent  promises 612 

conditions  concurrent   613 

conditions  precedent   615,  634,  637 

conditions  subsequent • 625 

condition  and  warranty 617,  621,  625,  627 

failure  of  consideration   627 

alternative  contracts   629 

impossibility   631 ,  634,  638 

remedies  for ^tl«  -a 

discharge  of  right  of  action 655-664 

Breach  of  promise,  of  marriage  263,  637 

damages  in   638, 653 

whether  cause  of  action  survives 525.  637 

Broker's  contract,  commissions  and  revocation   57 

Bucket  shops    % 390 

Building  and  loan  associations,  usury  in  contract 380 

Cancellation,  effect  of   563 

Capacity   of   parties     (see    Parties). 

Caveat  emptor,  application  of  rule 318,  333,  339,  618,  620 

Certainty,  in  the  terms  of  contract 25,  75,  77 

under  the  statute  of  frauds 148 

in  negotiable  instrument   491 

id  certum  est,  etc 76 

Champerty  and  maintenance 409,  410 

Change  of  law,  effect  of 369,  664 

Chattel  mortgage,  writing  and  registration  159 

seal  not  required  240 

of  household  furniture 430 

Check,  when  an  assignment  of  funds 497 

payment  by 53 

restriction  in  manner  of  payment 429 

Cherokee  Indian,  contracts  in  writing 159 

Choses  in  action,  assignment  of 485,  486,  500 

Classification  of  contracts 10,  78,  79,  1 10 

Cohabitation,  as  consideration 411 

bond  given  for 412 

Combinations,  trust  and  monoplies 430,  432 

Commissions  of  broker 58 

Common  carriers  (see  Railroads). 

Common  intention,  in  agreement 6,  9,  14,  297,  307 

Communication,  of  offer 28-33,  44 

of  acceptance   35,  39,  42,  48,  51 

of  revocation    45, 59 

Composition  with  creditors 366 

Compounding  a  crime    402 

Compound  interest    380 

Compromise,  of  doubtful  claim   201 

for  part  of  debt 210 

of  private  injury  405 

by  municipal  corporation 230 

Concealment    (see  Fraud). 

Condition,  concurrent 613 

precedent  133, 577, 579, 615 

performance  required   133,  577,  579,  615 


670  INDEX. 

Condition — continued.  Page 

in  execution  of  writing 40,  73,  106,  347,  539 

illegal,  as  consideration 404 

agreement  to  arbitrate 408 

distinguished  from  subsequent 572 

subsequent 569-574 

in  a  deed 57 1 

discharge  optional 574 

excepted   risks    574 

acceptance  upon  condition 539 

delivery  upon  condition   40,  73,  106,  539 

dependent  and  independent  612, 615 

misrepresentation  and  warranty  as  condition 315,  316 

condition  and  warranty  in  sales 617 

Conditional  sales 1 59 

Confidential  relations,  fraud  in 351 ,  352 

undue  influence  in 361 

Confllict  of  laws,  statute  of  frauds 158 

marriage   455 

married  women   292 

gaming  contracts 382 

Sunday  contracts 374 

usury 381 

as  to  illegality  in  general 382,  455 

as  to  construction  of  contract 455,  554 

as  to  remedies  455, 664 

Consent  (see  Agreement). 

reality  of 66 

alteration  of  instrument 645 

parties  under  disability   247,  264,  272.  276 

Consideration 

valuable,  defined  and  explained  160-162 

distinguished  from  motive 164,  166 

from  good  consideration 166 

necessity  for  in  conveyances 167 

in  contracts  under  seal   84,  109,  173 

in  negotiable  instruments 172,  176 

in  simple  contracts  172,  177 

under  statute  of  frauds 1 13,  1 15 

not  in  the  writing 1 15,  148 

in  recission 561 

adequacy  of   1 79 

in  equity   180 

sufficiency  of,  instances   163,  164,  181 

marriage    139,  181 

mutual  promises 184-189.  562 

voluntary  subscriptions    190 

voluntary  promises   170.  203,  213 

contingent  promises   188,  189 

forbearance 161,  197,  200 

compromise  of  doubtful  claims 201 

promise  to  do  what  one  is  already  bound  to  do  by  contract  . .  .   203 

by  law   207, 209 

part  payment  as  satisfaction 209 

to  do  impossible  thing  211 

moral  obligation 168,  369 

gratuitous    employment 177 

exchange  of  fixed  values  180 

illegal,  in  a  bond 393.  418 

in  part  393,  404,  438 

past  and  future  cohabitation 412 


INDEX.  671 

Consideration — continued.  Page 

in  regard  to  time 212 

executed  and  executory 214 

past  consideration 212 

at  request  of  promisor 214 

what  promisor  was  bound  to  do 216 

prior  contract  of  infant 216 

of  lunatic   216 

of  married  woman 217 

of  bankrupt 217 

under  statute  of  limitations 217 

void    369, 441 

failure  of 627 

in  contract  in  restraint  of  trade 173 

in  guaranty 40,  43 

in  promise  of  executor  or  administrator 112 

in  option 57 

recital  of  in  a  deed 109,  545 

vague  and  indefinite  76 

Consignor  and  consignee,  right  to  sue 476 

Conspiracy    432 

Constitution  of  North  Carolina 

Art.  I,  sec.  20,  freedom  of  the  press 428 

Art.  II,  sec.  14,  municipal  corporations 230 

sec.  23,  certificate   231 

Art.  VII,  sec.  7,  municipal  corporations 224 

Art.  VIII,, sec.  1^  Corporations 237 

Art.  X,  sec.  6,  married  women 280,  289,  521 

sec.  3,  liens 285 

Construction  and  interpretation : 536 

duty  of  judge  and  jury 536,  552,  578 

court  can, construe  but  not  change 569 

general   rules    550, 553 

intention  of  parties 550,  553 

from  whole  instrument 550,  553 

words  in  ordinary  sense 545,  550,  552,  553 

meaning  of  technical  words 545,  553 

implied  terms  554 

uncertain  and  vague  terms 553 

conflict  of  laws 554 

time  in  the  contract,  reasonable 112,  556 

of  the  essence 554,  556 

penalties  and  stipulated  damages   557 

ascertaining  the  terms,  (interpretation)   536 

Constructive  fraud   348 

Constructive  service   595,  599,  602,  603 

Contingent  fees   410 

Contingent  promises 188 

Contracts,  defined  and  explained  1,  2,  25 

agreement    3,  4,  6.  9 

classification  10,  78 

executed  and  executory   10 

express  and  implied  2,  10 

express 1 1,  12, 13 

implied,  in  fact 13-17 

implied  in  law,  quasi  contract 22-25 

complete,  when    25 

incomplete     25,  71-74,  539 

certain  and  definite  terms 26,  75-77 


672  index. 

Contracts — continued.  Page 

bilateral  and  unilateral 10,  131,  186,  187 

entire  and  divisible 414,  438,  440 

illegal 362 

existing  law  in 210,  554 

void,  voidable  and  unenforceable 10 

office  as  contract  224 

uberrima  fides   316 

Contracts  in  writing   (see  Frauds,  Statute  of) 110 

Contracts  of  record,  judgments 78 

recognizances  80 

Contracts  under  seal,  essentials  and  nature  of 81-108 

authority  to  execute  83, 92 

consideration,  at  law 84,  173 

in  equity   85,  173 

in  restraint  of  trade 173 

illegal    85,  41 1 

by  executor  or  administrator 113 

statute  of  limitations   662 

Contribution   533,  535 

Conveyances,  common  law  and  under  statute  of  uses 167 

Convicts,  contracts  of 246 

Copyright  and  patent  right,  assignment  of 158 

Corporations,  private   234 

charter  as  contract   234 

distinguished  from  municipal  234 

power  to  contract   237 

manner  of  contract  159,  239,  241 

use  and  effect  of  seal  240 

power  of  agent  to  bind 240 

estopped  to  deny  existence   244 

ultra  vires  contract 242 

repeal  of  charter 237 

foreign  244 

public  service  corporations,  contracts 400,  426,  432,  437 

Corporations,  municipal 224 

agencies  of  government   228 

contracts  of,  authority   224, 228 

necessary  expense  225,  228, 229 

exercise  of  discretion  229 

legislative  sanction   229, 234 

popular  vote  229 

bonds  issued  230, 234 

employ  attorney   229 

caring  for  poor 229 

interfering  with  public  duty 229,  396,  401,  426 

mortgage  of  public  property 230 

sale  of  street 230 

to  pay  officers  for  extra  service 415 

for  the  benefit  of  the  citizens 468 

claims  against   229 

speculation  in 416 

Correction  of  contract,  for  mistake 308,  312 

Correspondence,  offer  and  acceptance  by 43,  46 

payment  by  mail   583 

Counties,  cities  and  towns    (see   Corp.,  Munic). 

Covenants,  distinguished  from  easement  513,  516,  518 

running  with  the  land 510-518 

restrictive  covenants 518 


index.  673 

Covenants — continued.  P^l| 

to  stand  seized,  consideration loo 

not  to  sue,  as  a  discharge 535 

Creditors,  composition  with 366 

fraud  upon   353, 366 

Crime,  agreement  to  commit 364,  365 

compounding    402 

Crops,  sale  of  under  statute  of  frauds 134 

abandonment  of 597 

Custom  and  usage,  in  contract 548,  552 

requisites  of 549 

Damages,  for  breach  of  contract 13,  647 

for  services    596, 599 

compensation    596, 603 

constructive  service 595,  599 

sale,  executed  and  executory 591 

keeping  or  returning  property 591 

diligence  to  prevent  loss 591 

warranty    617-627 

measure  of   647,  649,  652 

naturally  arising    647, 650 

contemplated  by  parties 648,  651 

special  circumstances   648, 651 

remote    647,  650,  652 

profits  and  speculative  652 

nominal    652 

punitive    653 

upon  recission  of  contract 561,  573 

duty  of  party  to  prevent  loss 592,  652 

penalties  and  liquidated 557 

Death,  assignment  by 522 

discharge  by 522,  523 

lapse  of  offer  by 59 

of  joint  obligors 527,  529 

of  joint  obligees 529 

Deceit  (see  Fraud ) ,  action  for 322,  333,  346 

Deed,  defined   82 

indenture  and  deed  poll 91 

origin  and  manner  of  execution 86,  95 

consideration  not  necessary 84,  108,  167,  173,  175.  41 1 

execution  of,  two  parties  3 

signing     85, 9i 

by  agent    91 

by  one  not  in  the  deed 91 

sealing  ^ 92 

no  deed  without  82 

contract  to  convey 84 

endorsement  under  seal  85 

recital  of  seal  95 

delivery   90,  95,  97,  99 

takes  effect  from   98 

to  third  person 99 

as  escrow   104 

evidence  of   100 

signing  and  possession 90,  100 

probate  and  registration 100,  101 

presumed  at  date  of  deed 103 

after  grantor's  death 100 

effect  of 102 

not  accepted   97, 98 


674  index. 

Deed— continued.  Page 

reading,  failure  in 90, 342 

date,  not  necessary  103 

attestation,  not  necessary 103 

witness,  how  sign  89 

to  signing  and  sealing  only 103 

acceptance  required 97,  98,  103 

when  presumed   100,  103 

registration  and  probate 89,  107 

how  prove  execution 103 

necessary  as  to  third  persons 107 

copy  as  evidence  107 

unregistered,  as  color  of  title 107 

effect  of,  as  contract 108 

estoppel   108,  109 

recitals  in   108, 545 

merger  109,  642 

surrender  of,  before  and  after  registration 102,  568 

by  married  woman 102 

loss  or  destruction   102 

incorporated  in  a  will • 100 

parties  to,  corporations 241 

infants   248,258 

insane  persons  270, 271 

married  women   282,  289,  290 

grantee  bound  by  acceptance 519 

Delivery,  of  deed 90,  95,  96,  99 

of  insurance  policy  103 

of  official  bond 100,  220 

of  instrument  upon  condition  40,  106,  107,  347,  539 

Description,   indefinite    76, 77 

use  of  parol  evidence  546 

Destruction,  of  deed  102 

of  property  in  sale 72,  634,  640 

of  subject-matter,  as  discharge   633,  634 

Disability    (see  Parties). 

Discharge  of  contract 561 

by  agreement   561 

waiver,  rescission  and  cancellation 561,  564 

substitution 564 

form  of,  in  contracts  under  seal 566 

in  simple  contracts  in  writing 138,  568 

joint  obligations 531-535 

condition  subsequent    569, 571,  573 

excepted   risks    574 

discharge  optional  574 

by  performance   575 

substantial 575 

to   satisfaction    576,  579,  580 

pavment  580 

tender    586, 588 

by  breach  (see  Breach  of  contract) 591 

renunciation    591 

failure  of  performance 604 

by  operation  of  law 642 

merger   642 

alteration  of  instrument 643 

bankruptcy    217, 646 

Discharge  of  right  of  action 655 

by  release   655 

by  accord  and  satisfaction 656 


index.  675 

Discharge  of  right  of  action — continued.  Page 

by  arbitration  and  award 657 

by  judgment   659 

by  statute  of  limitations 217,  660 

Discrimination  in  rates 400,  440 

Divisible  and  indivisible  contracts 438,  440,  442,  609 

in  illegality 404,  440,  442 

in  failure  of  performance 609,  634 

Divorce,  agreements  for 419 

Drunken  persons,  contract  of 272 

test  of  capacity   273 

Duress,  by  imprisonment 353,  357 

by  abuse  of  process 357 

by  threats  357 

test  applied 358,  360 

effect  of 359,  360 

remedies    359 

Earnest  money 142 

Easement,  and  covenant 512,  516,  518 

and  license   127.  128 

and  statute  of  frauds  128 

Effect  of  contract    456 

imposing  obligation  upon  third  person 456 

interfering  with  contract  457, 460 

conferring  rights  upon  third  person 461,  476 

suit  by  one  not  a  party  to  contract 461-475 

suit  by  real  party  in  interest 471 ,  475 

assignment  by  act  of  parties 477-509 

assignment  by  operation  of  law 509-525 

joint  obligations 526 

Elections,  contracts  affecting 394,  395 

Election  of  remedies 344,  591,  599,  608,  618,  625 

Employers'  liability  act 437 

Endorsement    (see  Assignment  and  Neg.  Instr.). 

what   is    489,  497,  498,  508 

effect  of 498,  505,  507 

notice  of  dishonor 42,  507 

paper  in  hands  of  payee 509 

to  deceased  person 499 

for  collection    509 

endorser,  surety  and  guarantor 42,  498 

Enticing  servant    457, 460 

Entire  contracts 404,  438,  597,  605-609,  633,  634 

Equity,  assignment  in 486 

valuable  consideration    174 

inadequacy  of  consideration   180 

equitable  estates,  statute  of  frauds 124,  128 

equitable  estate  of  married  woman 277,  281,  291 

equitable  estoppel   317 

equitable  remedies 

for  breach  of  contract 149,  152,  427,  653 

for  fraud   319,  343.  346,  349,  427 

for  mistake 295,  308 

for  duress   353,  359 

for  usury 381 

in  illegal  contracts 392,  417,  453 

contribution 533,  535 


676  index. 

Equity — continued.  Page 

exoneration   535 

subrogation   465,  467 

distinction  in  practice  abolished 394 

Escrow,  what  constitutes   104,  106 

takes  effect  when 105,  106 

delivered  before  compliance  with  condition 106,  107 

Estoppel,  by  deed 108,  109 

by  judgment   659 

equitable  or  in  pais 317 

of  corporation    243, 244 

of  infant   263 

of  insane  person   270 

of  married  women    291 

of  the  State 109 

Evidence    (see  Parol  Evidence). 

as  to  oral  agreements 536 

written  agreements   538 

execution  of  instrument 538 

fact  of  agreement   538,  539 

terms  of  agreement 541 

under  statute  of  frauds  136 

to  show  mistake 310,  544 

agreements  to  suppress  evidence  404 

Excepted  risks,  in  contracts  of  common  carriers 435,  574 

Exchange  of  fixed  values,  as  consideration 180,  181 

Executed  and  executory  contracts 10,  562 

under  statute  of  frauds 158 

Executors  and  administrators 

can  not  contract  with  themselves 3 

liability  of  sureties  112 

survival  of  actions   524 

agreement  to  settle  without  letters 367 

for  one  of  two  to   manage   estate 416 

can  not  bind  estate  by  contract 112,  457 

expenses  incurred  for  estate 457 

funeral  expenses   25, 457 

promise  to  bind  personally 110 

consideration  in  1 12,  1 13 

signed  as  administrator   1 12,  1 13 

limiting  liability  in 115 

parties  to  actions 524,  525 

judgment,  when  personal 112 

not  breach  of  bond   114 

claims  against  when  barred 663 

Exemption  from  liability,  for  negligence 432-437 

Exemptions,   waived   in   note 429 

Expectancy,  buying  an   361 

Express  company,  restriction  as  to  liability 436 

Express  contract   1,  10 

Failure  of  consideration 627 

Failure  of  performance   604, 612 

False  representation    (see  Fraud). 

Fiduciary  relations,  and  fraud 351,  352 

Fences,  agreements  for  under  statute  of  frauds 129 

Fixtures,  under  statute  of  frauds 129 

Forbearance,  as  consideration 197,  199,  200 


index.  677 

Page 

Foreign  corporation,  contract  of 244,  443 

Foreign  judgment    80 

Foreign  law 382 

Foreign  states,  comity 382 

Form  of  contract   79 

of  record   78 

under  seal  81 

simple  contracts HO 

under  statute  of  frauds 1 10 

Fraud,  actual,  in  general 317,  329,  335 

false  representation    319,  330,  335 

non-disclosure 322,  325 

material  fact 319,  320,  324 

what  is 326 

intention    327 

opinion  319,  322,  329,  332 

knowingly  false   319,  323,  333-336 

reasonably  relied  on 319,  321,  330,  336 

negligence  of  party  injured 318,  321,  337,  339,  347 

intended  to  deceive,  and  result  in  injury 319,  334,  341 

as  between  vendor  and  purchaser  318, 325 

in  auction  sales   341 

caveat   emptor    318,  319,  333,  339 

distinguished  from  warranty 336,  346 

in  factum  and  in  the  treaty 90,  341 

failure  to  read   342, 344 

remedies ." 319,  342,  344,  346,  349 

burden  of  proof  in 351,  352 

rights  of  third  persons ••  •  •   346 

marital  rights 353 

on  creditors 353,  366 

constructive  fraud   348, 352 

inadequacy  of  consideration   180 

statute  of  limitations  ._ 662 

arising  from  the  condition  of  parties 275,  294,  334,  350,  352,  361 

Frauds,  Statute  of 1 10,  1 14 

promise  of  executor  or  administrator 111,114 

promise  to  answer  for  debt  of  another 115,  122 

liability  superadded 1 15,  1 16,  1 18,  122 

guaranty  and  indemnity 117,  122 

to  pay  out  of  debtor's  property 116,  119,  122 

benefit  personal  to  promisor 116,  120,  123 

application  of  statute 115,  120,  122,  123 

contracts  in  regard  to  land  124,  127 

application  of  statute   124,  128,  138 

growing  trees,  fructus  naturales 129,  133 

growing  crops,  fructus  industriales 134 

easement  and  license 127,  128 

fixtures    129, 214 

party  walls  and  division  fences 129 

partnership  agreements   137 

discharge  in  pais 138,  568 

lien  of  docketed  judgment 138 

parol  trusts 138 

contracts  in  consideration  of  marriage  139 

contracts  not  to  be  performed  within  a  year 140 

sale  of  goods,  wares  and  merchandise 141 

contracts  included  under  N.  C.  statute 158 

requisites  of  the  writing  enumerated 115,  143-149 

sufficient  writing   .' 131,  141,  145-148 


678  index. 

Frauds,  Statute  of — continued.  Page 

evidence  of  the  contract 141,  145,  149 

signed  by  the  party  to  be  charged 131,  144,  146,  148 

need  not  be  subscribed 144,  145,  148 

authority  of  agent 144,  145 

consideration  in  ." 115,  123,  131,  146-148 

several  papers , 148 

in  auction  sales   148 

delivery  and  registration  not  required 149 

effect  of  noncompliance   125,  147,  149-158 

English  view 151,  157 

how  taken  advantage  of  151,  153,  157 

who  may  take  advantage  of 157,  158 

remedies    151-153,  157 

part  performance 155,  157 

compensation  for  improvements 149,  157 

discharge  in  pais 568 

conflict  of  laws 158 

contracts  not  within  the  statute 158 

Lord  Tenterden's  act 123 

Fraudulent  conveyances 353 

as  against  creditors  and  purchasers 353,  449 

as  between  the  parties 353,  449 

as  to  innocent  purchasers   455 

Freedom  of  the  press  428 

Freehold  interest,  in  land,  assignment  of 512,  515 

Free  passes 400 

Funeral  expenses  25, 457 

Futures,  dealing  in   388,  390 

Gaming  contracts    381-390 

Good  consideration   166 

Goods,  wares  and  merchandise,  sale  of 141 

Goverment,  contracts  affecting 401 

power  to  contract 218 

United  States   218 

the  State   218 

municipal  corporations 224 

enforcement  of  claims  against  218,  223,  229 

Grant  from  State,  how  proved  and  registered 95 

Gratuitous  service 14,  18,  64,  177 

Growing  crops,  fructus  industriales 134,  136 

go  to  executor  when  134,  136 

in  sale  of  land  134 

not  within  statute  of  frauds 134-136 

Growing  trees,  fructus  naturales 133,  135,  137 

within  statute  of  frauds 129,  137 

Guaranty,  defined    38, 42 

absolute  and  conditional 38,  42 

consideration  in  40, 43 

acceptance  of   38,  42 

dafault,  notice  of 42 

diligence  required 43 

continuing,  how  revoked    43 

under  statute  of  frauds 122 

guarantor,  surety  and  endorser 42 

Guardian  and  ward,  liability  for  necessaries 252 

confidential   relation    351, 352 


index.  679 

Page 

Homestead,  how  conveyed 429 

lien  on,  renewed  judgment 643 

waiver  of  in  note 429 

statute  of  limitations   662 

Husband  and  wife,  agent  for  each  other ;,•  •  •  •   291 

contract  between   287,  291,  353 

joinder  in  conveyance  290, 429 

in  chattel  mortgage 430 

husband's  right  in  wife's  property 291,  519 

at  common  law 291,  519 

under  statute    291, 520 

upon  death  of  wife 519 

husband's  liability  for  necessaries 252,  269 

Identity,  mistake  as  to  person i 295,  427 

mfstake  as  to  subject-matter 6,  297 

Ignorance,  of  offer  and  acceptance 28,  31,  35 

of  reward  offered 61 

of  terms 29,  293,  294 

of  disability  of  person 263,  271 

Illegal  contracts 362 

agreements  in  violation  of  common  law 362 

to  commit  civil  wrong 362 

fraud  on  third  person 364,  366 

agreements  in  violation  of  statute 366 

in  general  367 

malum  in  se  and  malum  prohibitum 367,  439,  441,  446,  449,  454 

in  regard  to  administrations 367 

weights  and  measures 367 

revenue  stamp   368 

profession  and  trade 368 

intoxicating  liquors 370 

regulating  business 371 

Sunday  contracts  37 1 ,  374 

Sunday  service  of  process 374 

usury  " 375,  379,  380 

wagers  and  gambling  contracts 381-390 

wagers   38 1 ,  452 

games  of  chance   384 

insurance 385 

futures   388 

lotteries  and  gift  enterprises 390 

agreements  against  public  policy 290-437 

public  offices,  dealing  in 390,  393,  397 

pensions  and  salaries,  transfer  of 393 

editorials  in  newspaper 394 

lobbying  contracts 391,  395,  397 

corporations  owing  duty  to  the  public 395,  398,  400 

discrimination 400 

municipal  authorities   396 

affecting  the  government 401 

affecting  elections   394,  395 

interfering  with  public  justice 402-408 

compounding  a  crime   402 

suppressing  evidence    404 

settling* private  injury 405 

arbitration  agreements  405 

encouraging  litigation 408 

champerty  and  maintenance   409 

contingent  fees 410 

collection  fee  in  note 410 


680  INDEX. 

Illegal  contracts — continued.  Page 

immoral  tendency    410 

fraud  or  breach  of  trust 414,  416 

duties  of  officers   414, 415 

stockholders    416 

speculation  in  claims   416 

servants   416 

in  derogation  of  marriage  relation 416 

marriage  brocage 417 

restraint  of  marriage 419 

separation   420 

divorce   419,  423 

parental   relation    423 

in  restraint  of  trade 423,  428 

restricting   alienation    429 

mortgages  on  crops 429 

homestead   429 

combinations,  trusts  and  monopolies 430 

exempting  from  liability  for  negligence 432,  436 

effect  of  illegality,  and  remedies 365,  370,  380,  389,  398,  431,  438 

divisible    contracts    404,  438,  440 

indivisible  contracts    404,  438,  442 

intention  of  parties 443,  445 

promise  to  pay  money  on 217,  369,  381,  389,  446 

relief  of  parties  398,  401,  419,  431,  444-453 

ex  turpi  causa 398,  408,  431,  444 

locus  penitentiae   447 

in  pari  delicto 377,  392,  398,  401,  449-453 

void  and  illegal  contracts 375,  383,  441,  454,  455 

rights  of  third  persons 376,  446,  454 

transfer  of  note 375,  381,  454 

change  of  law 369 

conflict  of  laws 374,  381,  382,  455 

Immoral  agreements 410 

Impairing  obligation  of  contract 237 

by  repeal  of  charter 237 

by  change  of  law 664 

Implied  contract,  in  fact 10,  14,  15,  20 

accepting  benefits    16,  17,  215,  605 

gratuitous  service    14,  1 5,  64 

affected  by  relation  '  18,'  21 

in  law '.. '.'.'.'.'.'.'.'.  .16,22,24 

money  had  and  received 8,  24,  25  299 

goods  sold  and  delivered   '...'...'    25 

work  and  labor  done  608 

receiving  property  for  another    1 19, 461 

money  paid  to  the  use  of  another 22,  25,  456,  629 

surety  paying  debt 120,  456,  533 

judgments    79 

necessaries    24  253 

and  special  contracts '  608 

waiver  of  tort 24 

Implied  terms,  in  contract 523 

Impossibility,  as  a  discharge 133 

at  the  time  of  promise 211 

created  by  act  of  party 594,  600 

subsequent 523,  631,  632]  640 

in  personal  contracts 523,  594,  631,  638 

destruction  of  subject-matter   594,  632,  634 

arising  by  operation  of  law 631,  640 


INDEX.  681 

Page 
Imprisonment,  as  duress  353,  357 

Improvement  on  land   214 

under  statute  of  frauds 126,  149,  150 

promise  to  pay  for 214 

Incomplete  agreements,  no  contract 25,  71,  73 

intention  to  reduce  to  writing 26,  73,  74 

signing  upon  condition 40,  74,  106,  107,  347 

mortgage  or  note  to  be  given 615 

Indefinite  and  uncertain  terms 27,  75-77 

Indemnity  contracts,  when  valid  or  void 362,  366,  404 

under  statute  of  frauds 1 18,  123 

action  by  party  indirectly  benefited 462,  464,  474 

assignment  of 466 

Indenture     91 

Independent  and  dependent  promise 500,  612,  615 

Indivisible  contracts   438,  442,  605,  608,  633 

Indorsement  (see  Endorsement). 

Inducing  another  to  violate  contract  457,  458,  460 

Inevitable  accident    574,  632,  640 

Infants,  disability  of 249 

agent,  appointing  and  acting  as 248,  263 

emancipation  of 249 

contracts  of,  void 247 

voidable   249, 254-257 

for  necessaries  250-255 

where  both  parties  are  infants 256 

marriage  of 263 

endorsement  by   257 

grantee  in  a  deed 257 

avoidance  and  ratification  of  contract 159,  216,  255-262 

when  done  255, 262 

effect  of 255, 263 

return  of  consideration 256,  263 

new  promise  to  pay 262 

actions  by  and  against 257 

judgments   257 

statute  of  limitations 662 

liability  for  torts  263 

in  connection  with  contract 263 

misrepresentating   age    263 

Injunction    655 

to  prevent  violation  of  contract 427 

to  prevent  violation  of  charter 238 

to  prevent  enforcement  of  judgment  499 

to  prevent  foreclosure  of  mortgage 392 

Innocent  purchaser,  of  negotiable  paper 454 

in  illegal  contract   375,  377,  454 

when  one  name  is  forged 346 

under  deed  of  insane  person 271,  272 

in  case  of  mistake  or  fraud 306,  346 

of  municipal  bonds 230 

Inquisition    of  lunacy   267, 268 

Insane  persons,  contracts  of 264 

revocation  of  offer  by  insanity 59 

sanity  presumed 264 

test  of  capacity 265 

pleaded  as  a  defense 264 


682  index. 

Insane  persons — continued.  Page 

effect  of  inquisition 266,  27 1 

marriage  of 267,  268 

liability  for  necessaries  268 

avoidance  of  contracts ;  •   269 

actions  by  and  against 268,  272 

payment  of  debts 272 

effect  of  guardianship 267 

Insolvency,  concealing  or  misrepresenting 123,  332 

Installments,  debt  due  by 598,  607,  612,  635 

judgment  on  one   598, 643 

delivery  by   612 

Insurance  contract,  when  illegal 385,  443 

discrimination  in  rates 400,  440 

arbitration  agreements 405 

insurable  interest    386, 388 

reinsurance  contract  472 

other  insurance  clause 570 

contracts  of  foreign  corporation 244 

misrepresentation  and  warranty 315,  316 

notice  to  agent  affects  company 314,  316 

delivery  of  policy 103 

not  within  statute  of  frauds  159 

rescission  of  policy 260,  564 

discharge  by  breach  of  condition  569 

Intention,  common  in  agreement  6,  7,  9,  297 

to  charge  and  implied  obligation 14,  15,  64 

communicated     14,  15,  16,  25,  31 

genuine  to  contract  66 

to  create  legal  relations    64 

misrepresenting,  as  fraud 327 

of  misrepresentation  in  fraud 333,  341 

in  usury  contracts 380 

in  illegal  contracts  generally 443,  445 

in  alteration  of  instrument 643 

Interest,  annual  and  compound 380 

usury   375 

as  damages  652 

change  of  rate  in  note 643 

Interference,  with  contract  rights 457-460 

Interpretation,  meaning  of 536 

(See    Construction    and    Parol    evidence.) 

Intoxicating  liquor,  sale  regulated  371 

Intoxication,  effect  upon  party  to  contract 272 

Invitations  to  deal   69 

Jest,  agreement  in  jest  or  as  a  sham 66 

Joint  obligations    347, 526-529 

promisors    526.  528 

promisees    530 

release  of  one  party   119,  531,  533 

Joint   stock   associations 244 

Judge  and  jury,  duties  of 536,  578 

Judgment,  as  contract 78 

assignable    78,  495 

manner  of  assignment 78,  495 

rights  of  assignee   495 

assigned  for  benefit  of  surety 535 

according  to  merits 349 


index.  683 

Judgment — continued.  Page 

manner  of  entering 79 

erroneous,  irregular  and  void 79 

foreign 80 

by  consent 80 

against  municipal  corporation 230 

of   justice    78, 662 

docketed     643, 662 

for  and  against  infants ^ 257 

for  and  against  married  women ? 292 

effect  of  as  a  discharge 509,  659 

merger,  estoppel  and  res  judicata 643,  660 

on  part  of  debt ' 598,  643,  660 

statute  of  limitations   661 

attorney  appearing  on  both  sides 353 

tender  of  judgment .' 590 

in  joint  obligations  528,  532 

Jurisdiction,  in  tort  and  contract 24 

in  estates  of  insane  persons   272 

in  case  of  married  women 292 

Justice,  agreements  tending  to  obstruct 402 

Knowledge,  of  false  representation 333 

Labor  unions    432 

Laches,  of  party  signing  instrument 41,  346 

failure  to  read   90,  293,  342 

of  guarantee 43 

where  one  of  two  must  suffer 40,  308,  346 

Land,  assignment  of  interest  in 487 

fraud  in  the  sale  of 318,  322 

covenants  running  with   518 

statute  of  frauds  124,  128,  138 

Landlord  and  tenant,  right  of  renewing  lease 510 

notice  to  quit   574 

contract  to  repair   641 

accidental  damage 641 

liability  for  improvements 214 

causing  violation  of  contract 460 

Lapse  of  offer 46,  59 

Latent  and  patent  ambiguity 547 

Latent  and  patent  defects 318,  323 

Law,  existing,  as  part  of  contract 210 

foreign  law 382 

change  of  law   369,  664 

conflict  oflaws 158,  292,  381,  382,  455,  554,  664 

Leases,  special  and  implied  terms 13,  641 

assignment  and  subletting 512 

option  to  purchase 57 

right  to  renew 510 

under  statute  of  frauds 129 

Legality  of  object  (see  Illegal  contracts). 

Legislative  enactment,  evidence  of 231,  234 

Legislative  authority,  for  municipal  contract   231,  233 

Letters,  offer  and  acceptance  by 25,  43 

compliance  with  statute  of  frauds 131 

Liabilities,  assignment  of 477,  478 


684  index. 

Page 

License  and  easement 127,  128 

License,  for  profession  or  trade   371 

Lien,  agricultural ;  ••  59? 

of  judgment    ldS>  o4d 

of  mechanics \ksi  aS 

of  subcontractor loa>  4°/ 

Limitations    (see  Statute  of) 660 

Limiting  liability,  for  negligence  432~los 

in   endorsement    4y° 

Liquidated  damages 558 

Liquor,  sale  of 159,  370,  371 

Loans,  usury  in   3/9 

illegal  object 445 

Lobbying  contracts    39 1 ,  395 

Locus  penitentiae 44 7 

Lord  Tenterden's  act 1-3 

Loss  of  instrument   102 

Lotteries  and  gift  enterprises 390 

Lowest  bidder,  in  public  contracts 71 

Lunatics  (see  Insane  persons) 264 

Manner  of  agreement  •  J 1 

express  contract 10,  12 

implied  contract  in  fact   13 

implied  contract  in  law 22 

offer  and  acceptance 25 

in  writing,  under  statute  of  frauds 1 10 

intention  to  reduce  to  writing 26 

Marriage,  as  a  consideration 181 

contracts  under  statute  of  frauds 139 

brocage  contracts 417 

divorce  and  separation  agreements 419,  420 

in  violation  of  law 455 

of  infants    263 

of  insane  persons   268 

restraint  of  marriage   419 

effect  upon  property  rights 519,  521 

settlements   1 39 

Married  women,  contracts  of 276-292 

at  common  law 276,  289 

in  equity   276 

under  Constitution    278 

under  act  of  1911   286,  289 

as  a  feme  sole 280,  289,  290 

with  consent  of  husband 280,  290 

as  to  personalty 282,  288,  290 

as  to.  realty 282,  289,  290 

as  to  equitable  estate  281, 291 

charging  her  estate 281,  283,  284,  290 

liens  on   285, 291 

contract  not  in  proper  form 291 

repudiation  of  contract 291 

estoppel  by   29 1 

personal  liability   •  ■   292 

promise  after  coverture   170,  172,  216 

promise  to  pay  husband's  debts 463 

contract  with  husband    287, 291 


index.  685 

Married  women — continued.  Page 

endorsement  by   257 

jurisdiction  over 292 

conflict  of  laws t, 292 

Master  and  servant,  interference  by  third  person 457,  459,  460 

giving  notice  to  quit 560 

discharge  of  contract 477,  524,  594,  598,  606 

remedies  for.  breach   477,  594,  598,  606 

constructive  service 594,  599 

liability  for  negligence  437 

Material  fact,  in  fraud 326,  327,  329 

in  insurance  contract   314 

Maxims,  ex  nudo  pacto 164,  167 

eo  ligamine,  quo  ligatur 566 

ex  turpi  causa 366, 398,  408,  449 

id  certum  est 76 

in  pari  delicto 366,  378,  392,  398,  449,  453 

ut  magis  valeat   513, 553 

Memorandum,  in  writing,  under  statute  of  frauds 143-149 

Merger,  by  deed 109,  584,  642 

by  judgment   80, 643 

by  writing  643 

Misrepresentation,  nature  and  effect  of 312,  316 

in  insurance  contract 312-316 

condition  and  warranty  .  . .  .  „ 315 

uberrima  fides   316, 317 

as  an  estoppel 317 

of  law 332 

Mistake,  of  fact 45 

as  to  nature  of  instrument 293,  294 

as  to  identity  of  person 295 

as  to  identity  of  subject-matter 6,  7,  45,  297 

as  to  existence  of  subject-matter 298 

as  to  nature  of  subject-matter 300,  301,  306 

as  to   terms,   quantity,   etc 303 

as  to  expression  of  instrument   293, 306-308,  569 

mutual  and  unilateral 25,  293,  295,  303-307 

catching  bargains    304 

by  agent 304 

in   deed    308 

in  using  or  omitting  seal 95 

in  executory  contract  for  land 309 

of  law,  effect  of 309,  312 

remedies  for,  at  law  and  in  equity 308 

evidence  to  show 310,  312 

effect  upon  rights  of  third  persons 306 

in  awards 309 

statute  of  limitations 662 

Money,  had  and  received  24,  461 

paid,  when  recovered   22,  457,  629 

in  case  of  fraud 344,  346 

voluntary   payment    . ". 23,  299,  457 

Monopolies    426,  430,  432 

Moral  obligation,  as  consideration 168,  170,  213,  412 

Mortgage,  by  a  person  to  himself 3,  5 

application  of  funds  under  586 

assignment  of  mortgage 508,  509 

assignment  of  debt  carries  security 508,  509 

assignment  of  property  by  mortgagor 465,  484 


686  index. 

Mortgage — continued.  Page 

assumption  of  debt  by  purchaser 465 

by  corporation   240, 241 

by  municipal  corporation  230 

dealing  between  mortgagor  and  mortgagee 352,  429 

discharge  by  tender ., 587 

foreclosure  by  administrator 525 

chattel  mortgage  on  crops 429 

chattel  mortgage  on  household  furniture 430 

statute  of  limitations 662 

to  secure  illegal  debt 392,  438 

Motive  and  consideration 164,  166 

Mutuality  of  obligation,  in  contract 131,  187,  189 

Mutual  promises,  as  consideration   184,  185,  187 

Necessaries,  for  infants 250,  251 

insane  persons  268 

married  women 290 

municipal  corporations 225 

Negligence,  failing  to  read  instrument 293 

of  party  injured  by  fraud 318,  319,  321,  337,  347 

exemption  from  liability  for 432,  436,  437 

Negotiable  instruments  (see  Bills  and  notes). 

requirements  of 1 58,  49 1 ,  493 

meaning  of  negotiable 492,  493 

consideration  presumed   172,  176,  177 

under  seal  99,  500,  505 

incomplete     98 

with  forged  name 346 

transfer  of,  by  assignment 489,  492,  497,  500,  506 

partial 489 

by  delivery   499 

transfer  of,  by  endorsement 489,  492,  498,  505,  507 

holder   in   due   course 508,  509 

by  person  under  disability 257 

of  illegal  or  void  note 454 

of  note  payable  to  obligor " 4 

liability  of  endorser 498 

Nondisclosure,  as  fraud 323 

Nonresident,  statute  of  limitations   662 

Notice,  of  terms  in  instrument 29,  32,  33,  433 

in  contract  of  guaranty 28,  39 

of  acceptance  or  revocation  of  offer 36,  51 

in  case  of  rewards 61 

of  defective  instrument  40, 346 

to  complete  assignment   495,  497 

to  agent  binds  principal 314 

Novation 565 

Nudum  pactum,  what  is 164,  174 

only  in  simple  contracts 173 

Offer  and  acceptance,  explained 25,  26,  27,  28 

Offer,  by  letter  or  telegraph 43,  45,  47 

by  printed  schedule 51 

communicated   28,  29 

acceptance  of   35,  48 

to  the  public  .  .  ^ 61,  63,  71 

invitation  to  deal 69 

revocation   of   44, 54 


index.  687 

Page 

Official  bond,  to  United  States 218 

to  the  State 218 

signed  by  one  not  named 91 

Offices  and  officers,  dealing  in  public  offices 390 

indemnity  to  officers 363 

promise  to  pay  more  than  fees 209 

promise  to  pay  for  extra  services 209,  415 

speculating  in  claims   416 

making  contracts  for  supplies 416 

office  as  contract  224 

when  officer  entitled  to  reward 62 

Opinion,  as  representation  in  fraud 329,  332 

Options,  explained 55,  56 

as  offer  and  as  contract 56,  57 

timber  contracts  as  options ,     57 

lease  with  option  to  purchase 57 

extended  under  statute  of  frauds 157 

Oral  agreements,  interpretation  and  construction 536 

Parent  and  child,  contract  interfering  with  relation 423 

services   rendered    18, 21 

liability  for  support   252, 253 

good  consideration 168 

confidential  relation 353 

enticing  away  child  as  servant 460 

Parol  contracts 172 

Parol  evidence,  under  statute  of  frauds 128,  136,  149,  154 

as  to  written  contract 538 

to  prove  execution 538 

to  prove  fact  of  agreement 538,  539 

to  prove  terms  of  agreement 541 

writing  not  whole  contract   136,  541-543 

writing  complete  contract 544 

can  not  vary  or  contradict 544 

may  explain    545, 546 

latent  and  patent  ambiguity 547 

custom  and  usage  548 

to  show  fraud,  mistake,  etc 310,  544,  547 

to  show  subsequent  agreement 544 

to  show  surety 505 

in  receipt  and  release J97,  534 

Parties  to  actions  (see  Actions). 

Parties  to  contract,  two  are  more  necessary 3,  4,  5-3,  4,  5 

shown  under  statute  of  frauds 143,'  147 

capacity  of    '  2I8 

United  States 218 

the  State 218 

municipal  corporations 224 

other  corporations 234 

aliens   244 

attorneys  and  physicians   247 

convicts    246 

infants   . 247 

insane  persons   264 

drunken  persons    273 

married  women   276 

mistake  as  to 295 

actions  by  or  against 46i-476 

assignment  by    477 

joint  obligations 526 


688  index. 

Page 
Partition,  parol  agreement  for  128 

Partners,  contract  with  firm 5 

agreements  in  regard  to  land 137 

action  by  one  against  the  other 5 

action  by  and  against  the  firm 5 

contracts  under  seal   95 

new  firm  assuming  old  debts 462,  474 

surviving  partner  to  settle 525 

undisclosed  partner 289,  663 

Part  performance,  under  statute  of  frauds 155,  157 

Party  walls,  under  statute  of  frauds 129 

Past  consideration 212-216,  413 

Payment,  what  constitutes 580,  582 

when  and  where  made 582 

by  note  or  check 53,  583 

application  of 585,  587 

effect  of,  by  third  person 582 

part  in  satisfaction  of  whole 53,  209 

presumption  of 663 

voluntary,  when  recovered 23,  299,  457 

to  revive  a  debt 663 

of  .money  into  court 586 

Penalties  and   stipulated   damages 557 

Pensions    393 

Performance  (see  Discharge  by)    575 

Physician,  contract  of 368 

Possession,  of  deed  as  evidence  of  delivery 100 

of  note  as  evidence  of  ownership 508 

Preliminary  negotiations    69, 71 

Presumption,  of  delivery  of  deed 100 

of  consideration 176,  177 

of  fraud 348 

statute  of 663 

Pretended  agreements 66 

Probate,  sufficiency  of   103,  108 

of  State  grant " 108 

and  registration  of  deed 100,  101,  107,  108 

Process,  abuse  of 357 

Profession  or  trade,  statutes  regulating 368 

Promise,  as  consideration    185,  186 

to  do  what  one  is  already  bound  to  do 203 

for  benefit  of  third  person  .": 461 

under  statute  of  frauds 131 

of  infant  after  age   216 

of  married  woman  after  coverture 216,  291 

of  bankrupt  after  discharge 158,  217 

to  pay  debt  barred 158,  217,  663 

not  to  plead  statute 663 

Public  contracts,  to  lowest  bidder 71 

Public  offices,  dealing  in  390 

Public  policy,  contracts  against 390 

Quasi  contracts    22, 24 

Railroads,  associated   lines   30, 437 

discrimination  and  free  passes 400 

liability  for  negligence  432-436,  574 


index.  689 

Railroads — continued.  Page 

liability  for  injury  to  servants  437 

State  and  Federal  regulations 436,  437 

reasonable  regulations   434, 436 

restricting  duty  to  the  public 398 

time-table  as  offer    51 

bill  of  lading  and  ticket  as  contract 29, 31,  33,  433 

Ratification  of  contract,  by  State 220 

by  corporation   232, 240 

by  infant   ' 258,  260,  262 

by  insane  person  270 

by  married  woman 29 1 

of  void  and  voidable  contracts  159,  217,  369 

Reality  of  consent  (see  Mistake,  Fraud,  etc.) 

Reasonable  time 132,  556 

Receipt,  not  conclusive    197 

Recitals  in  a  deed,  when  estoppel 108,  109,  545 

Recognizance,  nature  of 80 

enforcement  of 81 

power  of  bail  in 81 

statutory  regulations 81 

Record,  contracts  of 78 

Registration  of  deed,  effect  of 101,  107 

presumed  to  be  correct 101,  107 

mistake   in    90,  101 

seal  in   93 

of  State  grant   , 108 

Release  as  a  discharge  655 

form  of   566,  568,  655 

in  joint  obligations   531,  533,  535 

fraud  and  mistake  in 294,  656 

Remedies  for  breach  of  contract  647 

anticipatory  breach   591,  594,  599 

beneficiary  in  contract 461 

action  at  law 647 

specific  performance   653 

injunction    427,  655 

for  breach  of  condition 618,  621,  625,  627 

for  breach  of  warranty   618,  621,  625,  627 

for  breach  in  installments 598,  612 

for  duress   353, 359 

for  fraud   319,  342-346,  349,  350,  427 

for  illegal  contracts 392,  398,  447 

for  mistake   293-312 

conflict  of  laws   382, 664 

Rent,  implied  promise  to  pay 608 

accrued  and  not  accrued   512 

Renunciation  of  contract  591 

before  time  of  performance   591,  592,  594 

during  time  of  performance   477,  594,  596,  612 

remedies   for    477,  591,  594 

damages,  how  estimated 592,  595,  596 

Representation  and  warranty   315,  316 

Rescission  of  contract,  by  agreement 138,  204,  206,  216,  561-568,  595 

for  fraud 344-346,  427 

for    mistake    297, 301 

for  breach  of  condition   573,  618,  626,  627 

effect  of  rescission  562 

Res  judicata   660 


690  INDEX. 

Page 

Restraint,  upon  alienation  429 

of  marriage 419 

of  trade  423, 428 

Return  of  property,  by  infants 263 

by  insane  persons  270 

in  breach  of  condition  and  warranty 619,  621,  625,  627 

Revival  of  debt,  barred  by  statute 158,  663 

discharged  in  bankruptcy 158 

Revocation  of  offer 34,  54 

may  be  made  when 44,  54,  57 

must  be  communicated 44,  59 

in  case  of  options  54,  55 

under  seal  55 

by  rejection 36,  59 

by  lapse  of  time 46,  59,  63 

by  death  or  insanity 59 

Rewards,  who  entitled  to 61 

how  revoked  63 

Roads,  bridges  and  streets , 229 

Sales,  executed  and  executory   10 

concurrent  conditions   614, 615 

subsequent   conditions    573 

with  and  without  warranty 300,  617,  621,  625,  626 

implied    warranty 618,  620,  622,  626 

caveat  emptor 300,  620,  622 

duty  to   inspect    618, 620, 624 

damages  for  defects  and  delay 619,  621 

failure  to  take  property  591 

of  interest  in  land 124,  318,  322 

of  goods,  wares  and  merchandise 141 

of  liquor    370 

of  offices 390 

at  auction    63 

Satisfaction,   accord    and 657 

performance  as    576,  579,  580 

part  payment  as 53 

Scienter,  in  deceit  and  warranty 323,  346 

Scire  facias,  in  recognizance 80 

Seal,  what  is 92 

essential  to  deed  82 

in  registration 95 

one  for  two  or  more  parties 93 

opposite  name  of  witness 94 

authority  under,  when   84, 95 

under  statute  of  frauds  149 

offer  under   55 

consideration,  at  law  and  in  equity 173 

discharge  of  contract  under   566 

of  State   95 

of  corporation    240 

Separate  estate  of  married  women 277,  281,  290,  291 

Separation  agreements   420 

Services,  gratuitous 14,  64,  177 

in  family   18 

contracts  for  personal    478,  523,  574,  594,  640 

constructive 595,  599,  602,  603 

Sickness  as  a  discharge  of  contract 133 


INDEX.  691 

Page 

Signing,  what  is  sufficient 85,  92 

under  statute  of  frauds   144,  145,  148 

upon  condition 40,  74,  347,  539-541 

by   mistake    342, 344 

Silence,  or  nondisclosure,  as  fraud   323 

Special  contract  and  quantum  meruit 608 

Specialities  (see  Contracts  under  seal). 

Specific   performance    •••■••   653 

under  statute  of  frauds  152,  155,  157 

consideration  required    654 

with  compensation  for  defects 654 

with  correction 309 

Splitting  up  accounts   660 

Stakeholder,  liability  of 447 

State,  contract  by 218,  223 

action  by  and  against  223 

Statute  of  frauds  (see  Frauds,  statute  of). 

Statute  of  limitations,  as  a  discharge 660 

running   of    660, 662 

claims  against  counties   229 

executors 663 

for   usury    381 

judgments  and  specialities   661, 662 

sureties    662 

simple  contracts 622 

fraud  and  mistake 622 

promise  to  pay  after 217,  661,  663 

part  payment    587, 663 

promise  not  to  plead 663 

bars  the  remedy 663 

change  of  law 664 

conflict  of  laws   664 

Stipulated   damages    557, 558 

Stockholders,  how  shown 35 

married  women    290 

illegal  agreement  of    '.'. 416 

Streets,  sale  of 230 

Subcontractors,  claims  of 457 

Subrogation     464,  465,  467,  535 

Subscriptions,  voluntary 59,  190 

Subsequent  agreement  as  discharge   569 

Substantial  performance 575 

Substitution  as  a  discharge 204,  206,  564 

Sunday  laws 371 

Surety,  signing  upon  condition 106 

on  unaccepted  bond 98 

on  administration  bond    112 

shown  by  parol   505 

judgment,  etc.,  assigned  for   509 

right  of  contribution 533,  535 

exoneration 535 

subrogation  535 

notice  to  creditor 535 

discharge  of,  by.  release 531 ,  535 

by  extension  of  time  531,  535 


692  INDEX. 

Surety — continu.-  Pa^e 

by  statute  of  limitations 531, 1    I 

by  tender 587 

Surrender  of  instrument,  as  discharge 102.  567.  568 

Survival  of  cause  of  action 524.  525 

Survivorship,  of  wife   519 

in  joint  obligations   529. 

in  partnership    525 

Tax    deed     -7 

Telegraph,  offer  and  acceptance   r      47.       : 

liability  of  company  for  damages 4.5. 

exempting  from  liability 43 , 

who  may  sue 4-5 

Tender,  how  made    5S8, 589 

when  not  required  614 

how  kept  good   5S6.  589 

effect  of 588.  589 

of  performance    588.  589.  590 

of  money  and  specific  articles 58S.  590.  591 

of  judgment   590 

Terms  of  agreement,  definite 26.  27.  75 

express  and  implied   10.  13 

Third  persons,  rights  of 

under  infant's  contract 2c , 

under  insane  person's  contract 271 

under  mistake 306 

under  fraud 346 

under  illegal  contract  454 

as  to  obligations  imposed 456 

as  to  rights  conferred  by  contract 461.  462.  468.  472.  474.  476 

Threats,  as  duress 357 

Ticket,  as  contract 31,  33 

Timber  contracts,  as  options 57 

Time,  a;  esser.ee  of  the  contract 46.  554 

reasonable  time   132. 556 

Torts,  waiver  of 24 

liability  of  infants 263 

agreements  to  commit   363 

indemnity  in 362 

Trees,  sale  of.  under  statute  of  frauds 129,  133 

Trustee,  confidential  relation    353 

.  .Uing  with  trust  property  5,  353 

Tru-ts.  regulated   432 

Uberrima  fides  in  contract 316 

LTtra  vires  contracts 242.  244 

Uncommunicated  terms  in  contract 29.  33 

Undue  influence 295.  361 

Unliterateral  and  bilateral  contracts 10.  131,  186 

United  States,  power  to  contract 218 

Usage  and  custom 549 

Usury     375.  379.  380 

Vague  and  indefinite  terms  75 

Vendor  and  purchaser,  fraud  between 318.  325 

assignment  of  rights 483 

rights  under  statute  of  frauds  126,  128.  149,  157 


INDEX.  693 

Page 
Void  and  voidable  contracts   10,  248,  375,  383,  441,  454 

Wagers    381 ,  -r52 

Waiver  of  rights  under  contract 314,  316,  561-564.  5,3 

War,  effect  upon  contract 246 

Warehouseman,  liability  of 431 

Warranty,  express 618-621,  625.  did 

implied -   618.  622.  626 

distinguished  from  condition 315,  618,  62o.  62,^ 

distinguished  from  fraud 336.  346 

remedy  for  breach 618,  621,  627 

covenant  of ^18 

Weights  and  measures   36  / 

Withdrawal  of  offer   34.  44.  57 

of  goods  at  auction 63 

Witness,  attendance  of 207 

additional  compensation 20 , 

contract  to  prevent  attendance 404 

to  deed 1Q3 

proof  by  attesting  witness ^38 

Writing,  effect  of •   310 

under  statute  of  frauds   143-149 

Written   agreements    310.  r  - v 

proof  of  execution •  ■   538 

condition  in  execution 538.  539 

parol  evidence  in  regard  to 310,  538,  541.  544 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 


AA    000  695  367    3 


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